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The need for an increase in the price of milk powder

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By Sanjeewa Jayaweera

The steep price increase in essentials like milk powder and cooking gas has caused much debate and anger amongst consumers. The opposition politicians are milking the angst among the public to score some points. There is no doubt that any increase in food prices causes the greatest anger and frustration amongst those struggling to make ends meet. The inability to provide dependents three square meals a day is a failure that causes a great deal of mental anguish.

In the developed world, having three meals a day is taken for granted, whilst in many developing countries, this is still not possible for a particular segment of the population. Therefore, it is the responsibility of the governments that we elect to plan and develop the economy to create productive employment so that all non-disabled adult citizens are gainfully employed. Unfortunately, successive governments in Sri Lanka have miserably failed in this area. The reasons for such failure are too numerous to be discussed in this article.

The purpose of this article is to share certain information which hopefully will enable the readers to understand better the challenge of maintaining stable prices of imported commodities and how poor decision making by GOSL makes matters worse.

It must be understood that prices of imported commodities are not within the control of the importer, who in most instances are private enterprises and individuals. Commodity prices in the world market are governed by many factors ranging from droughts and floods that impact the harvest and, at times, export bans. Currently, post covid supply chain constraints are also contributing to a surge in prices the world over as demand exceeds supply. Prices are always a function of demand and supply, and when demand exceeds supply, it is natural for prices to up.

Milk powder is an essential item amongst families with children. Due to its nutritional value, despite some in the medical profession claiming otherwise, many parents ensure that it is included in the grocery list. Therefore, the inability of parents to procure this vital commodity due to either it being too expensive or because it is not readily available leaves many such parents seething in anger. A recent news telecast before the price increase showed a long queue of persons waiting to purchase a packet of milk powder, with many complaining that they have stood for more than three hours. Some were claiming that they had travelled a distance of more than 10 kilometres.

Unfortunately, the public is not fully aware of the reasons for either the need for a sharp increase in the retail price or the cause for the shortage. The Global Dairy Trade website (www.globaldairytrade.info) shows that a metric ton of full cream milk powder on November 20, 2020, cost US $ 3,037. This price excludes freight. The retail price of 1 kg milk powder in Sri Lanka was then Rs. 945/-.

The world price then increased to a high of US $ 4,364 per ton by March 02, 2021. It has since fallen to US $ 3,749 per ton by October 05, 2021.

In addition to the significant price increase in US Dollar terms, the Sri Lanka rupee, which stood at Rs. 184 per US Dollar in October 2020 has depreciated to Rs. 203 by October 2021.

In percentage terms, the increase within the 12 months is 35 per cent whilst in March 2021, it was 50% at its peak. In addition to the rise in world prices and the depreciating rupee, the importers also had to bear an increase in freight costs, which have doubled.

The unfortunate aspect of this saga is that GOSL, through the consumer protection authority, did not allow the retail price to increase from Rs. 945. As milk powder is considered an essential item, its retail price is mandated by the GOSL.

In such a scenario, the importers were bearing significant losses. The net result was that they either stopped importing milk powder or reduced the quantity imported significantly, thus causing a shortage of milk powder in the market. When an item is sold at a loss, the more you sell, the more you lose.

The fact that the GOSL did not grant a price increase is unfathomable. It is basic common sense that no private enterprise is able or willing to bear losses. Private business people are the favourite whipping boys for politicians, media, and the public in our country. No doubt some racketeers fleece the public. People need to understand that those who engage in business activities invest their funds, invariably savings in expectation of getting a reasonable return. It is no different to us as individuals investing our savings in fixed deposits. We rightfully expect a decent return which till recently was around 10 per cent for the year. Therefore, in my view, given the risk taken by those venturing into business, a return between 15 per cent to 20 per cent after tax is a fair return. Many don’t achieve such a return, and quite a lot fail in their business ventures and lose their savings.

The alternative is for the GOSL to be the importer. However, given the repeated scams that have been perpetrated by those working in the state sector, such as Sathosa, we know that government enterprises are ill-suited for such activities. In that case, the private importers should be allowed to operate in an environment where the objective of cost-plus profit is achieved, and it is for the GOSL to facilitate this.

Businesses are often accused of not bringing down prices once increases are granted despite world prices reducing, and the general belief is that business enterprises are making super-profits. In most instances, this is not the case. The actions of the GOSL, which many are unaware of, prevent the prices of such commodities from being reduced. I want to share an example of how the GOSL uses its power to levy duties and taxes on imports that prevent importers from passing on the benefit to the consumer.

The GOSL enforces customs duty at the point of import which is a cost that needs to be added before arriving at the retail price. It has been and is the policy of the GOSL to increase the duty component when world prices of essential items reduce and reduce such duty when world prices increase.

The example given below is based on records maintained by a former colleague of mine who was the purchasing director. The company that we worked for imported Skimmed Milk Powder (SMP) as a raw material.

It should be noted that the world price shown would have fluctuated during the period. Therefore, I have shown the world price on the date when the duty change was implemented.

I trust the above schedule explains why importers of milk powder are constrained from passing on the benefit of reducing prices to the consumer. Thus, it is evident that the GOSL is surreptitiously keeping the benefit to themselves and not allowing it to be passed on to the consumers.

The rationale of pricing imports that I have outlined above is equally applicable in determining the price of gas, petrol and diesel. Even state enterprises like the Ceylon Petroleum Corporation and Litro Gas should be allowed to trade on a formula of cost-plus profit. There is no alternative to this principle.

My contention and that of many who are familiar with Economics and Finance are that by not passing on the cost increase through a price formula based on cost plus profit, even those who can bear such price increases are subsidized. There will be some consumers for whom the increased cost of petrol, diesel, gas and milk powder will have no consequences; there will be some consumers for whom a certain degree of adjustments to their monthly expenditure will need to be made and a degree of belt-tightening to accommodate such price increases. Some of these adjustments might mean resorting to carpooling, travelling by train or bus. That is the choice that needs to be made. However, there will be a segment of the population who are unable to bear such price increases. Therefore, the GOSL should provide a monetary allowance to bear such price increases and make them responsible for allocating their funds. I say this as, at times, I am perplexed when I see some of the people who flock to the Liquor shops when they are opened after a period of closure.



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Ranking public services with AI — A roadmap to reviving institutions like SriLankan Airlines

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Efficacy measures an organisation’s capacity to achieve its mission and intended outcomes under planned or optimal conditions. It differs from efficiency, which focuses on achieving objectives with minimal resources, and effectiveness, which evaluates results in real-world conditions. Today, modern AI tools, using publicly available data, enable objective assessment of the efficacy of Sri Lanka’s government institutions.

Among key public bodies, the Supreme Court of Sri Lanka emerges as the most efficacious, outperforming the Department of Inland Revenue, Sri Lanka Customs, the Election Commission, and Parliament. In the financial and regulatory sector, the Central Bank of Sri Lanka (CBSL) ranks highest, ahead of the Securities and Exchange Commission, the Public Utilities Commission, the Telecommunications Regulatory Commission, the Insurance Regulatory Commission, and the Sri Lanka Standards Institution.

Among state-owned enterprises, the Sri Lanka Ports Authority (SLPA) leads in efficacy, followed by Bank of Ceylon and People’s Bank. Other institutions assessed included the State Pharmaceuticals Corporation, the National Water Supply and Drainage Board, the Ceylon Electricity Board, the Ceylon Petroleum Corporation, and the Sri Lanka Transport Board. At the lower end of the spectrum were Lanka Sathosa and Sri Lankan Airlines, highlighting a critical challenge for the national economy.

Sri Lankan Airlines, consistently ranked at the bottom, has long been a financial drain. Despite successive governments’ reform attempts, sustainable solutions remain elusive.

Globally, the most profitable airlines operate as highly integrated, technology-enabled ecosystems rather than as fragmented departments. Operations, finance, fleet management, route planning, engineering, marketing, and customer service are closely coordinated, sharing real-time data to maximise efficiency, safety, and profitability.

The challenge for Sri Lankan Airlines is structural. Its operations are fragmented, overly hierarchical, and poorly aligned. Simply replacing the CEO or senior leadership will not address these deep-seated weaknesses. What the airline needs is a cohesive, integrated organisational ecosystem that leverages technology for cross-functional planning and real-time decision-making.

The government must urgently consider restructuring Sri Lankan Airlines to encourage:

=Joint planning across operational divisions

=Data-driven, evidence-based decision-making

=Continuous cross-functional consultation

=Collaborative strategic decisions on route rationalisation, fleet renewal, partnerships, and cost management, rather than exclusive top-down mandates

Sustainable reform requires systemic change. Without modernised organisational structures, stronger accountability, and aligned incentives across divisions, financial recovery will remain out of reach. An integrated, performance-oriented model offers the most realistic path to operational efficiency and long-term viability.

Reforming loss-making institutions like Sri Lankan Airlines is not merely a matter of leadership change — it is a structural overhaul essential to ensuring these entities contribute productively to the national economy rather than remain perpetual burdens.

By Chula Goonasekera – Citizen Analyst

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Why Pi Day?

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International Day of Mathematics falls tomorrow

The approximate value of Pi (π) is 3.14 in mathematics. Therefore, the day 14 March is celebrated as the Pi Day. In 2019, UNESCO proclaimed 14 March as the International Day of Mathematics.

Ancient Babylonians and Egyptians figured out that the circumference of a circle is slightly more than three times its diameter. But they could not come up with an exact value for this ratio although they knew that it is a constant. This constant was later named as π which is a letter in the Greek alphabet.

Archimedes

It was the Greek mathematician Archimedes (250 BC) who was able to find an upper bound and a lower bound for this constant. He drew a circle of diameter one unit and drew hexagons inside and outside the circle such that the sides of each hexagon touch the sides of the circle. In mathematics the circle passing through all vertices of a polygon is called a ‘circumcircle’ and the largest circle that fits inside a polygon tangent to all its sides is called an ‘incircle’. The total length of the smaller hexagon then becomes the lower bound of π and the length of the hexagon outside the circle is the upper bound. He realised that by increasing the number of sides of the polygon can make the bounds get closer to the value of Pi and increased the number of sides to 12,24,48 and 60. He argued that by increasing the number of sides will ultimately result in obtaining the original circle, thereby laying the foundation for the theory of limits. He ended up with the lower bound as 22/7 and the upper bound 223/71. He could not continue his research as his hometown Syracuse was invaded by Romans and was killed by one of the soldiers. His last words were ‘do not disturb my circles’, perhaps a reference to his continuing efforts to find the value of π to a greater accuracy.

Archimedes can be considered as the father of geometry. His contributions revolutionised geometry and his methods anticipated integral calculus. He invented the pulley and the hydraulic screw for drawing water from a well. He also discovered the law of hydrostatics. He formulated the law of levers which states that a smaller weight placed farther from a pivot can balance a much heavier weight closer to it. He famously said “Give me a lever long enough and a place to stand and I will move the earth”.

Mathematicians have found many expressions for π as a sum of infinite series that converge to its value. One such famous series is the Leibniz Series found in 1674 by the German mathematician Gottfried Leibniz, which is given below.

π = 4 ( 1 – 1/3 + 1/5 – 1/7 + 1/9 – ………….)

The Indian mathematical genius Ramanujan came up with a magnificent formula in 1910. The short form of the formula is as follows.

π = 9801/(1103 √8)

For practical applications an approximation is sufficient. Even NASA uses only the approximation 3.141592653589793 for its interplanetary navigation calculations.

It is not just an interesting and curious number. It is used for calculations in navigation, encryption, space exploration, video game development and even in medicine. As π is fundamental to spherical geometry, it is at the heart of positioning systems in GPS navigations. It also contributes significantly to cybersecurity. As it is an irrational number it is an excellent foundation for generating randomness required in encryption and securing communications. In the medical field, it helps to calculate blood flow rates and pressure differentials. In diagnostic tools such as CT scans and MRI, pi is an important component in mathematical algorithms and signal processing techniques.

This elegant, never-ending number demonstrates how mathematics transforms into practical applications that shape our world. The possibilities of what it can do are infinite as the number itself. It has become a symbol of beauty and complexity in mathematics. “It matters little who first arrives at an idea, rather what is significant is how far that idea can go.” said Sophie Germain.

Mathematics fans are intrigued by this irrational number and attempt to calculate it as far as they can. In March 2022, Emma Haruka Iwao of Japan calculated it to 100 trillion decimal places in Google Cloud. It had taken 157 days. The Guinness World Record for reciting the number from memory is held by Rajveer Meena of India for 70000 decimal places over 10 hours.

Happy Pi Day!

The author is a senior examiner of the International Baccalaureate in the UK and an educational consultant at the Overseas School of Colombo.

by R N A de Silva

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Sheer rise of Realpolitik making the world see the brink

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A combined US-Israel attack on Iran.(BBC)

The recent humanly costly torpedoing of an Iranian naval vessel in Sri Lanka’s Exclusive Economic Zone by a US submarine has raised a number of issues of great importance to international political discourse and law that call for elucidation. It is best that enlightened commentary is brought to bear in such discussions because at present misleading and uninformed speculation on questions arising from the incident are being aired by particularly jingoistic politicians of Sri Lanka’s South which could prove deleterious.

As matters stand, there seems to be no credible evidence that the Indian state was aware of the impending torpedoing of the Iranian vessel but these acerbic-tongued politicians of Sri Lanka’s South would have the local public believe that the tragedy was triggered with India’s connivance. Likewise, India is accused of ‘embroiling’ Sri Lanka in the incident on account of seemingly having prior knowledge of it and not warning Sri Lanka about the impending disaster.

It is plain that a process is once again afoot to raise anti-India hysteria in Sri Lanka. An obligation is cast on the Sri Lankan government to ensure that incendiary speculation of the above kind is defeated and India-Sri Lanka relations are prevented from being in any way harmed. Proactive measures are needed by the Sri Lankan government and well meaning quarters to ensure that public discourse in such matters have a factual and rational basis. ‘Knowledge gaps’ could prove hazardous.

Meanwhile, there could be no doubt that Sri Lanka’s sovereignty was violated by the US because the sinking of the Iranian vessel took place in Sri Lanka’s Exclusive Economic Zone. While there is no international decrying of the incident, and this is to be regretted, Sri Lanka’s helplessness and small player status would enable the US to ‘get away with it’.

Could anything be done by the international community to hold the US to account over the act of lawlessness in question? None is the answer at present. This is because in the current ‘Global Disorder’ major powers could commit the gravest international irregularities with impunity. As the threadbare cliché declares, ‘Might is Right’….. or so it seems.

Unfortunately, the UN could only merely verbally denounce any violations of International Law by the world’s foremost powers. It cannot use countervailing force against violators of the law, for example, on account of the divided nature of the UN Security Council, whose permanent members have shown incapability of seeing eye-to-eye on grave matters relating to International Law and order over the decades.

The foregoing considerations could force the conclusion on uncritical sections that Political Realism or Realpolitik has won out in the end. A basic premise of the school of thought known as Political Realism is that power or force wielded by states and international actors determine the shape, direction and substance of international relations. This school stands in marked contrast to political idealists who essentially proclaim that moral norms and values determine the nature of local and international politics.

While, British political scientist Thomas Hobbes, for instance, was a proponent of Political Realism, political idealism has its roots in the teachings of Socrates, Plato and latterly Friedrich Hegel of Germany, to name just few such notables.

On the face of it, therefore, there is no getting way from the conclusion that coercive force is the deciding factor in international politics. If this were not so, US President Donald Trump in collaboration with Israeli Rightist Premier Benjamin Natanyahu could not have wielded the ‘big stick’, so to speak, on Iran, killed its Supreme Head of State, terrorized the Iranian public and gone ‘scot-free’. That is, currently, the US’ impunity seems to be limitless.

Moreover, the evidence is that the Western bloc is reuniting in the face of Iran’s threats to stymie the flow of oil from West Asia to the rest of the world. The recent G7 summit witnessed a coming together of the foremost powers of the global North to ensure that the West does not suffer grave negative consequences from any future blocking of western oil supplies.

Meanwhile, Israel is having a ‘free run’ of the Middle East, so to speak, picking out perceived adversarial powers, such as Lebanon, and militarily neutralizing them; once again with impunity. On the other hand, Iran has been bringing under assault, with no questions asked, Gulf states that are seen as allying with the US and Israel. West Asia is facing a compounded crisis and International Law seems to be helplessly silent.

Wittingly or unwittingly, matters at the heart of International Law and peace are being obfuscated by some pro-Trump administration commentators meanwhile. For example, retired US Navy Captain Brent Sadler has cited Article 51 of the UN Charter, which provides for the right to self or collective self-defence of UN member states in the face of armed attacks, as justifying the US sinking of the Iranian vessel (See page 2 of The Island of March 10, 2026). But the Article makes it clear that such measures could be resorted to by UN members only ‘ if an armed attack occurs’ against them and under no other circumstances. But no such thing happened in the incident in question and the US acted under a sheer threat perception.

Clearly, the US has violated the Article through its action and has once again demonstrated its tendency to arbitrarily use military might. The general drift of Sadler’s thinking is that in the face of pressing national priorities, obligations of a state under International Law could be side-stepped. This is a sure recipe for international anarchy because in such a policy environment states could pursue their national interests, irrespective of their merits, disregarding in the process their obligations towards the international community.

Moreover, Article 51 repeatedly reiterates the authority of the UN Security Council and the obligation of those states that act in self-defence to report to the Council and be guided by it. Sadler, therefore, could be said to have cited the Article very selectively, whereas, right along member states’ commitments to the UNSC are stressed.

However, it is beyond doubt that international anarchy has strengthened its grip over the world. While the US set destabilizing precedents after the crumbling of the Cold War that paved the way for the current anarchic situation, Russia further aggravated these degenerative trends through its invasion of Ukraine. Stepping back from anarchy has thus emerged as the prime challenge for the world community.

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