Editorial
The galloping stock market
The Colombo stock market has been galloping like nobody’s business these past several days with little or no rational explanation of why this is so in the context of a pandemic-hit business downturn. Among the reasons that have been proffered by brokers and analysts for this surge in confidence of market players, and they have increased substantially in recent months according to the CSE, is that interest rates are plunging. Investors who could earn as much as 12 or 13 percent or more on fixed deposits not so long ago, have to be now satisfied with marginal returns way below the prevailing rates of inflation. They are thus attracted to a stock market which is now performing better than most others in the region.
But the surge on the Colombo market is not supported by foreign or institutional buying which knowledgeable people say is necessary to sustain the current momentum. In fact there has been a steady outflow of foreign funds from Colombo in recent months and there has been no stemming of this flow. Although various authorities have more than hinted that institutions like the Employees Provident Fund and the Insurance Corporation will be back in the market in the short term, this does not appear to have come to pass.
Little wonder. There have been a plethora of allegations about pump and dump and market manipulation that institutional fund managers will be reluctant to open themselves to fresh accusations. This would mean a safe ‘do nothing’ philosophy unless they are ordered to enter the market. We do not know whether there is political or any other directions on what state-controlled entities should do with regard to stock market investment today. But we do know that this has happened in the past. It has been rightly urged that the EPF is only the guardian of the private sector retirement fund it manages, and not its owner. The fund belongs to its members who, together with their employers, make monthly contributions to it as a retirement saving. It must therefore refrain from speculative investments like stock trading is the conservative viewpoint.
The contra-argument has also been adduced. The EPF has long been a captive lender to the government. Government borrowing would naturally ease as the economy grows and there was official thinking within the Central Bank that it made sense to invest in private sector growth areas through the stock market as a long-term strategy. This was done to some degree that was admittedly small. Those who read the annual reports of listed companies, and even their quarterly financial reports listing their top twenty shareholders, will know that that the EPF has substantial stakes in many blue chip companies. There must be a lot of unrealized capital gains in the EPF portfolio where the pluses will outweigh the minuses although the fund cannot always back winners. If its members get an annual dividend ahead of inflation on their individual holdings in the fund, nobody can reasonably complain.
The benchmark All Share Price Index of the CSE has already topped its all time high and the upward momentum continued as this is being written on Friday. Where it will end, nobody can say. It is certainly a good thing for the country that many small investors are entering the stock market which is now retail driven. A completely new class of investors have today entered a field which not so long ago was the exclusive preserve of the rich. Massive turnovers in the billions are being recorded on the CSE every day and stockbrokers who had a lean time as the Easter bomb and the pandemic hit forcing market closure for a long period, would now be laughing all the way to the bank. While the market and its players can bask in the current sunshine, it is very necessary to attract foreign investors back to the CSE. This will undoubtedly be a formidable tasks but a bull run such as that which ongoing can be a factor that can prove persuasive.
Ranjan Ramanayake
The Chairman of the Elections Commission went on public record that Ranjan Ramanayake, the actor politician, who has now begun serving his term of four years rigorous imprisonment will not lose his parliamentary seat for six months. But the attorney general has said otherwise and the elections boss has subsequently stated that what he had expressed is a personal opinion. However that be, the Ramanayake issue remains very much alive in parliament where his Samagi Jana Balavegaya colleague, Harin Fernando sported a black shawl last week and said he will continue to wear it until Ranjan returns. Parliamentarian M.A. Sumanthiran, who defended Ramanayake in the Supreme Court also spoke up for the actor saying he was privileged to appear in court “for a clean, honest politician and I’m proud of that.”
The Speaker is yet to rule whether the convicted MP is entitled to attend parliament and promised to announce his decision in three weeks. Readers know that other prisoner-parliamentarians have previously attended sessions, but what will happen in this instance remains an open question in the short term. While most people believe that there is no appeal from a Supreme Court determination and a presidential pardon is the only way out, a contrary view relative to this matter has also been expressed in the context of the International Convention for Civil and Political Rights (ICCPR) to which Sri Lanka is a signatory.
In parliament last week Sumanthiran drew attention to the fact that Sri Lanka has failed to enact legislation for contempt of court although some work in that regard had been done. Expressing the view that the term imposed on Ramanayake was unprecedented and exceptionally severe, he drew attention to a serious lacuna in the law which has resulted “in an unprecedented injustice to an honest Member of Parliament.” Ramanayake has consistently refused to apologize for the offence over which he was charged; his parliamentary colleague, Lakshman Kiriella, also last week referred to the conduct of two former chief justices, although under the protection of parliamentary privilege. Such reference had obvious implications in the context of what Ramanayake said.
Editorial
Lurking danger and ‘NATO’ officials
Thursday 16th January, 2025
Rising water levels in irrigation tanks are a blessing for the inhabitants of the dry zone, for they signal a time of plenty. Paradoxically, scores of families living in areas below the Senanayake Samudraya in Ampara are living in fear as the life-giving reservoir is fast approaching its maximum storage limit.
More than one hundred people were evacuated the other day because a bank of Gal Oya, in Suduwella and Kotawehera, is at the risk of breaching owing to severe erosion. Irrigation officials warned that if rains continued causing the sluice gates of the tank to be opened, the damaged bank might give way, flooding a vast low-lying area. The evacuees were bussed back home yesterday as the reservoir catchment had not experienced heavy rains the previous day.
Obviously, the erosion of the river bank did not occur overnight, and the residents of the area have said they had been evacuated on previous occasions as well. What have the irrigation authorities and other state officials been doing all these years?
According to some state officials, a sand bar has formed in a section of Gal Oya, making water flow along only one bank, which has suffered erosion as a result. The problem is far too serious to be managed with measures such as piling sandbags, the officials have said, noting that they will have to remove the sand bar, facilitating the river flow and easing the pressure on the damaged bank before repairing it. This task is best left to engineers, but the question is why no action has been taken so far to prevent a possible breach of the eroded bank, which continues to develop cracks. Are the officials waiting until the collapse of the bank to take action? Aren’t cynics justified in calling such individuals NATO (No-Action-Talk-Only) panjandrums?
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Opposition aiming for the stars
The SJB has given serious thought to forming a broad coalition of right-wing political parties as a countervailing force against the JVP-led NPP government, SJB MP S. M. Marikkar has told a media briefing in an answer to a question on the progress in efforts to bring the SJB and the UNP together. Stressing the need for a grand opposition alliance, he has categorised the NPP as a leftist coalition.
Whether a party/coalition is leftist or rightist should be judged by its policies rather than anything else. The NPP cannot be described as a socialist outfit; one sees hardly any difference between its policies and those of the SJB or the UNP. Even JVP General Secretary Tilvin Silva has said the NPP administration is not leftist in the real sense of the term. He has, in a press interview, called it ‘a government of leftist, progressive democratic forces’, whatever that means. The Frontline Socialist Party, an offshoot of the JVP, has rightly called the NPP a ‘patchwork of ideological differences’.
The so-called right-wing parties have already begun to cooperate to some extent. They have joined forces to defeat the NPP in cooperative society elections, and achieved some success. Independent groups, backed by the SJB, the UNP, the SLPP and the MEP, have beaten the NPP in Homagama, Moratuwa, Kelaniya, Angunukolapelessa, etc. Their success in those contests may have prompted the SJB to consider forming a grand alliance with a view to turning the tables on the NPP. But the feasibility of such a political project is in doubt, given the competing ambitions of the Opposition politicians.
The SJB has even failed to hold its own coalition partners together; some of them have voted with their feet. The same goes for the SLPP and the UNP. They themselves have suffered crippling splits. So, it is doubtful whether a group of political parties facing internal problems will be able to set aside their differences, overcome the ambitions of their leaders, and unite for a common cause in the long term.
Editorial
California blazes
Wednesday 15th January, 2025
Wildfires in the US, engulfing parts of Southern California, have left the world agape. They have already claimed 24 lives and gutted countless properties including 12,000 houses and caused an economic loss of over USD 150 billion so far. Besides, thousands of wild animals are believed to have perished in the blazes. The environmental cost of the unfolding wildfires is said to be incalculable. Particle pollution has added another dimension to the catastrophe, rendering millions of people vulnerable to heart and lung diseases.
Los Angeles was bracing for more extreme winds and flames at the time of writing. The residents in vulnerable areas have been warned of a possible explosive fire growth. It is feared that if meteorological forecasts hold, the horrors of fire-weather will continue into the summer and perhaps spread to the northern parts of California as well—absit omen!
Wildfires in California, which is no stranger to such blazes, were expected to occur with the official arrival of La Nina conditions in the Pacific Ocean a couple of weeks ago, heralding a drought in the southern parts of the state, but nobody thought they would develop into an inferno of this magnitude. Nothing is so certain as the unexpected where extreme weather events are concerned.
It is doubtful whether anything worse could have happened to southern California; the average rainfall has been about 2% of normal for areas like Los Angeles, and Santa Ana wind gusts reached a record 100 mph. According to weather forecasters, there will be no rains in Southern California until the end of January. The predictability of even usual weather events is diminishing owing to climate change. This is a disconcerting proposition for not only the US but also the rest of the world.
One particular dimension of wildfires such as the raging ones in California has not apparently received much attention. It is the possibility of fire weather conditions being weaponised. All it takes to wreak havoc on a country which experiences extreme weather events is a match stick or a lighter during a dry spell, which turns vegetation into highly combustible fuel, with winds matching the speed of freeway traffic. The California wildfires have demonstrated the vulnerability of even a super power like the US while big powers are reportedly experimenting with ‘tectonic weapons’ capable of triggering seismic events.
While hearts are going out to the victims of the catastrophic wildfires in the US, the world must spare a thought for the Palestinians who are enduring a humanitarian tragedy in Gaza, devastated by Israeli airstrikes carried out with US help.
US Vice President Kamala Harris, whose government has been helping Israel reduce Gaza to rubble by generously providing Tel Aviv with funds and weapons despite widespread protests, came very close to realising what it was like to lose one’s own house, when her private residence in Los Angeles was threatened by the Palisades blaze. It is hoped that outgoing President Joe Biden will redouble his efforts to bring about a ceasefire in Gaza before leaving office.
Ironically, the California wildfires have occurred a few days before the inauguration of Donald Trump, one of the leading climate change deniers, as the 47th US President. Unless the Republicans, during Trump’s second nonconsecutive term, care to take cognisance of the obvious and act accordingly, the US will find it even more difficult to face disasters supercharged by climate change. BBC has reported, quoting scientists, that rapid swings between dry and wet conditions in California—known as whiplash—due to climate change have yielded a huge amount of tinder-dry vegetation that is ready to ignite. Many other countries, especially those in the tropics, are equally vulnerable to the ill-effects of climate change, such as whiplash and blazes of extreme intensity.
Editorial
Oral rinse deal leaves bad taste in mouth
Tuesday 14th January, 2025
The Health Ministry is in the news again for all the wrong reasons. It has become a metaphor for corruption. Irrefutable evidence has emerged about how politicians at the helm of it have enriched themselves over the years at the expense of the sick, cutting as they did shady deals to procure substandard equipment and pharmaceuticals including fake cancer drugs. There is a widely-held misconception in this country that only politicians are corrupt; bureaucrats, save a few, are no better. The state service is as corrupt as the political authority.
What has been unfolding on the economic and political fronts, since last year’s regime change, does not hold out much hope for those who dreamt of a clean Sri Lanka under the new NPP dispensation. No room should, however, be left for pessimism where anti-corruption campaigns are concerned, for it has the potential to breed hopelessness and even conformism, but it is difficult to ignore the harsh reality.
On witnessing widespread malpractices in developing countries, one wonders whether governments may come and governments may go but the corrupt go on forever. Sri Lankans usually do not make informed decisions when they elect their representatives, far less fight for their rights the way they should; worse, all systems are geared towards serving the interests of the crooked. Thankfully, the current economic crisis jolted the Sri Lankan public into taking a long hard look at the way they had been exercising their franchise and ‘suffer crooks gladly,’ so to speak. Hence the mammoth mandate they delivered to the NPP in last year’s general election, expecting it to upend all compromised systems and install in their place new ones to eliminate corruption, which has stood in the way of national progress. Worryingly, things do not seem to be moving in the desired direction under the new dispensation as well.
The Doctors’ Trade Union Alliance for Medical and Civil Rights Dr. Chamal Sanjeewa has accused the State Pharmaceutical Corporation (SPC) of having decided to award a tender worth Rs. 36 million to a blacklisted Bangladeshi company for supplying 270,000 bottles of a mouth-cleaning antiseptic solution.
The SPC’s response to the allegation in question was not known at the time of writing. Some media reports said the SPC had asked for time to respond as an inquiry into the matter was underway. Health Secretary Dr. Anil Jasinghe has said the issue will be probed.
It is not difficult to get at the truth. The SPC only has to check whether the foreign company it has selected has been blacklisted. If the allegation is true, then all those who decided to award the aforesaid tender to that firm must be made to explain why they did so and whether they acted under duress. The controversial oral rinse deal has left a bad taste in many a mouth. It is a sad reflection on the new administration, which came to power, promising to root out the scourge of bribery and corruption.
When former Health Minister Keheliya Rambukwella and some health officials were prosecuted over the procurement of a consignment of fake immunoglobulin, it was thought that the health authorities would act cautiously and make a serious effort to enforce transparency in its dealings and restore public trust in the state health sector. But the health officials do not seem to be willing to mend their ways if Dr. Sanjeewa’s serious allegation is any indication.
Let the government be urged to have the DTUAMCR President’s allegation thoroughly probed in an impartial and transparent manner. It should be able to do so promptly if it has nothing to hide. One can only hope that the government will not launch a vilification campaign against Dr. Sanjeewa instead of having the questionable tender deal investigated.
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