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Midweek Review

The trust deficit

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Nelum Kuluna: “It’s the folly of such investments that has created the debt problem.”

 

by Usvatte-aratchi

 

‘If liberty means anything at all, it means the right to tell people what they do not want to hear.’

George Orwell

 

When this government was elected to office, there was wild jubilation, almost countrywide. People danced in the streets. But totally unexpectedly that ecstasy lasted a short time. This was no more strongly revealed than when the Cardinal, the leader of the Roman Catholic community in the country, publicly prayed to God that as he and his community could not get justice from secular authority. May God mete out justice to those who destroyed the lives of many members of his community! It was a pitiful cry of desperation (crie de coeur) that touched many people, no matter their religious faith or lack thereof. There were several well-known members of the Bhikkhu Sangha, who spoke most unhappily about the government for betraying the undertakings that had been given to them, when the now government sought election to office. The betrayal was bitter to a large sections of the population when the saubhagyaya (plentifulness), so prominently promised by the winning political party in 2019, turned out to be simply its opposite in 2021. The impending economic austerity, after the yahapalanaya government, glared in the face of all thoughtful people in 2019 but the winning party impressed upon the electorate that the party had worked out strategies and policies that would bring in prosperity which the opponents failed to achieve. The public were not shown the strategies and policies. When something is too good to believe, it is either not genuine or not true. It was sheer stupidity on the part of the electorate to believe that the key to El Dorado was in the hands of one individual or even the few who were on the path of wisdom (viyath maga); perhaps, inevitable given the alternative. It took three serious unexpected disasters to persuade two ministers of the government to explain in Parliament the dire economic situation in the country and their lack of policies to meet those perilous challenges. The first was the invasion of the SARS-CoV-2 infection that came along with tourists. After a promising start, the government floundered helplessly in 2021, failing to use effectively a fine public health structure that had many victories to its credit, including control of malaria, elimination of polio, typhoid and DPT. In mid-2021, the death rate among those infected rose above 1 percent, double that which prevailed in May 2021 and yet better than in most parts of the world. The government could not make use of the work of government servants who had information on the location and the age of people who lived there (Electoral lists in the offices of grama niladhari). The disaster that the Ministry of Shipping cluelessly invited into our seas destroyed not merely the eco system but with it the lives and livelihoods of millions of people, not necessarily only along the coast. The claim by a government minister that deaths on a large scale of sea creatures, both large and small, soon after the shipping disaster, was a regular feature in the stormy season (varakan) was shockingly disingenuous. The government handled both these disasters so incompetently that the electorate lost whatever trust they had about the government’s capacity to govern the country. The ill-timed policy to eliminate the use of synthetic chemicals in agriculture (which itself is not a bad idea in an ideal world) raised the ire of the mass of peasants and farmers and threatened the supply of food in the country and the continued production of tea and rubber. The persistent assertion by the Minister of Agriculture that there was plentiful fertiliser, herbicides and pesticides flew in the face of demonstrations by thousands of cultivators all around the country. Are these protestors true hirelings of fertiliser importers? The threat to import organic fertiliser is fraught with untold dangers, because that fertilizer carries organisms that could be dangerous to human, animal and plant health, here. More directly, that policy openly contradicted the pledges given in the manifesto of the party that fertiliser would be given to peasants free and freely.

In liberal democracies, governance is a matter of trust between the government and the governed. Governments are elected by the people periodically on the basis of manifestoes issued by political parties in which the parties lay out the policies that they would implement, if elected to office. Some unexpected emergencies inevitably arise and the policies they adopt to meet those emergencies must be governed by approaches to policy announced in their manifesto. The governed expect that government has spoken honestly in their manifestoes and would implement them in the people’s interest and not for the pecuniary gains of those that govern. When parties seeking office (not power, as we commonly say) systematically lie to seek election and the voters are either not sharp enough to see through the falsehoods or are swayed by other propaganda, (e.g. finding a small ethnic or religious group in the country whose electoral strength is petty, against whom a political party can whip up a frenzy) governments have a problem retaining the trust of the governed. ‘These leaders might invoke a lost imperial grandeur …. (Rajarata, in our case). They adopt sophisticated propaganda techniques (which may include events of spectacular destruction) in which to demolish adversaries and bolster their own egos… This charisma is leveraged to project an aura of virility that is supposed to protect a helpless citizenry against lawlessness and an endangered nation against the invasive impurities of alien and internal enemies.’ (Ariel Dorfman, 2021.) When lying came to light, the governed lost trust in government.

A fortnight ago, two Ministers who spoke in Parliament to defend the decision of the government to raise the prices of petroleum products (which itself is reasonable) laid out clearly, for the first time, the economic plight of the nation and the impecuniosity of the government. One was the redoubtable Bandula Gunawardana; the other, the lawyer Gammanpila. Later the new Minister of finance, whilst taking office, spoke about the ‘grave situation (bararum thatvaya)’ of the economy and the finances. We wish him well, in a difficult job. Why did it take 21 months for the government to take the people into confidence and explain the dire situation of the economy and the finances when they took over from the yahapalanaya government? There was, then, the added advantage of an escape goat ready for slaughter, a second time.

 

The government was so keen on standing by their propaganda that the president, soon after taking office, abolished the PAYE scheme, drastically reduced both direct and indirect taxes and renewed his promise to give new employment to hundreds of thousands of university graduates, which promise he fulfilled later under pressure. (The public were told, very late, that tax revenue had fallen sharply in 2020.) Independent observers were taken aback by these decisions which may have been so enthusiastically adopted only by a government, with an economy with strong sinews and a Treasury with bottomless reserves. The public awaited a miracle. They should not have, because the horn of plenty is only a fairy tale for toddlers not economics for adults. In government, one should have ‘soft hearts and hard heads’ and not the other way around, which seems to be partly the problem with the new government.

Now that some members of the government have given expression to the true nature of the economic situation and the financial imbroglio of the government, what about the way out of these predicaments? There was widespread antipathy to the idea of seeking assistance from IMF on account of the eventual necessity to agree to conditions they would lay down to come to the assistance of the economy. The IMF lays down those conditions because it wants to ensure that the objectives it sets out to achieve, require countries to follow those policies. The IMF conditions that the government disapproved of included austerity measures to ensure that the economy has a surplus with which to service debt. (It is the obverse of more resources than we produced when we borrowed from abroad.) There is no escape from seeking such drop in the domestic use of domestical output to pay back debts incurred. In addition, there was an equally widespread objection to seeking assistance from abroad and much enthusiasm for working out our own solutions. These strategies and policies now on display feature the following. There is widespread austerity in the country, fulfilling the first condition that could have been demanded by the IMF. The supply of goods of all kinds has fallen. That scarcity has resulted from many measures that government implemented. The direct reduction of imports is the most visible. Any shopper in a supermarket can observe empty shelves. Fertiliser and agrochemicals are scarce. The Covid epidemic, the shipping disaster and the scarcity of fertiliser and agrochemicals will reduce incomes cutting down total demand and demand for imports. The other means of enforcing austerity is to raise prices to make goods and services beyond the budget of most people. Fortuitously, the fall in employment has reduced levels of income and cut down living conditions. Printing money large scale brought about the rise in prices. Whether the government wished it or not, austerity which IMF would have recommended is here with us. No matter which party formed the government, this austerity was inevitable, not because we borrowed but because we invested foolishly. The public are in austerity. What is absent is a programme to reschedule debt repayment.

Individuals, corporations and governments all borrow and prosper out of debt. The secret is in the uses made of the loan proceedings. Large scale borrowing was resorted to in the years 2010-2015. We had been impoverished by a long drawn out civil war. Borrowing was welcomed by society because there were large scale projects, employment in construction ran high and the rate of economic growth was elevated. By 2015, the rate of growth had come down and the government was voted out of office. Among other reasons, the poor performance of the economy was of major importance. With large investments in the early years which helped raise the growth of the economy, the failure of the investments to raise output (summarily, high incremental capital/output ratios – ICOR) dampened the rate of growth. The failure of investments to earn a return on it was all too clear to see: Hambantota Port still does not make an adequate return; the International Conference Hall lies idle; Mattala airport receives an occasional flight; Nelum Pokuna has a more attractive garden than audiences shouting acclaim for plays on its fine stage; and the Nelum Kuluna stands solitary guard over the Colombo Port City. It is the folly of these investments that created the debt problem, not borrowing itself. Yahapalanaya government failed to realise that unless they explained to the public the dire situation in the country and imposed austerity to pay back the loans, that they would hand over to the successor government a debt burden impossible to bear. That is exactly what has happened. Saubhagya government that succeeded the Yahapalanaya government completely failed to read the economy correctly or imagined that they could hoodwink the public to believe that they had strategies and policies to meet these exigencies. The public evidently took in the latter, hook, line and sinker. That the same strategist who promoted the infrastructure programmes in 2010-2015 was appointed today to manage the economy and that his first project was an infrastructure project is cause for deep concern.

We need to put in place a programme to restructure debt service payments so that the government can manage to avoid a catastrophic further fall in living standards of the people. To agree to reschedule debt repayment, creditors need an organization, in which they have faith, that it will enforce an agreed upon reschedule. Most of the time that organization has been the IMF. Interest rates in international capital markets have begun to rise with widespread fears of incipient inflation in developed countries. The prices of materials like aluminum, copper and rare minerals have been rising for several months. The tendency for interest rates to rise is further strengthened by the initiative of central banks to disgorge their bursting portfolios of financial assets. The cheap credit regime may have come to an end. A reschedule itself may be now more expensive than earlier.

If the government does not wish to use the IMF, they will have to find a substitute. There are no other solutions.



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Midweek Review

Crossmatch: A moral mirror

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by Santhushya Fernando

Blossoming somewhere between a Chinaman and a Jam Fruit Tree is a Lotus. An unusual place to bloom, but there it is, anyway, Crossmatch. Crossmatch is Carmel Miranda’s debut novel that won the Gratiaen Prize 2020. Here’s what isn’t there in Crossmatch: steamy sex, profanity, harsh political commentary, preaching, flowery similes, structured ‘tools of literary writing’, boring descriptions. Probably uninfected by formal literary training, Miranda writes a provocative story with the acumen of a skillful doctor documenting on a patient’s bedhead ticket with some hardcore suspense thrown in. Crossmatch, for its entire 261 pages is captivating in its heart race potential.

Is she for real?

About 20 pages into Crossmatch, I phoned a senior friend who has spent the better part of his life at the Faculty of Medicine and the National Hospital of Sri Lanka (NHSL). “Seriously, you had a colleague called Dr Carmel Miranda? She writes like a hawk observing it all- is this a real name?” He’s was entertained, and replied “Carmel Miranda is for real. She spoke very little, did very much. Never spoke an unnecessary word: serious, committed, all about the patient, precise, not attention seeking, you know, the kind of person you miss when they are not there”. Oh, so I figure. Like Lotus. In Crossmatch.

The plot

Lotus, the protagonist is a third year medical student at the Faculty of Medicine, University of Colombo. She’s requested to pay a social visit to a hospitalised patient by her aunt, as all aunts of all medical students do. Like all medical students up to their eyes in real or imaginary stress, Lotus, grudgingly obliges visiting Anil Kumara only to find him dead. Events take Lotus to Lionel, the NHSL mortuary attendant with one glass eye, who convinces her to safe keep the dead boy’s mobile phone wrapped in a newspaper. Something about the numbers in the phone that includes the namesake Lotus Hospital, the NHSL ENT unit number and the contents of the newspaper drives Lotus to dig in deep. She uncovers, quite accidentally, the dangerous underbelly of organ trafficking mafia, poverty, inequality and the heart wrenching plight of the poor in our so called free healthcare system. Was it an accident that killed Anil? If not, who then is the killer? Finally Lotus finds answers and also confronts a devastating personal truth about her umbilical linkage to the Lotus Hospital. Even at the helm of her shatter, Lotus retains her characteristic objectivity and dignity. Throughout Crossmatch Miranda displays a true gift at maintaining the fidelity to her characterisation in personality, lingo, and mannerism.

The moral mirror

If you have read the captivating Gratiaen winner Chinaman by Shehan Karunatilaka, you would know that one need not be a cricket fan to fall in love with that book. Miranda shows similar skill and humility in telling a “medical story” without medical jargon interfering with storytelling. She has labored well to tell a story about the holes of a medical system in effortless lay language. Never does she matronizingly “explain” medical terms down to the reader, weaving it all in, silkily.

Miranda holds a moral mirror on to our conscience with Crossmatch. It’s a grand mirror with one in center in front of which the reader is stands. That mirror is hinged with two mirrors on the side: the moral mirror of medical education and the moral mirror of medical practice. Both the hinged mirrors reflect unto the main mirror creating an ‘n’ number of reflections.

The moral mirror of medical education in Crossmatch touch on teaching via humiliation, linguism, unjust hierarchies, lack of cohesion in medical education, doctors past their medical fitness ‘expiry date’ continuing to practice medicine. But the beauty of Miranda’s moral mirror is that it does not discuss this in a malicious spirit. All is written with astounding tenderness and sensitivity towards human fallibility. It’s a mirror that every teacher must consider standing before.

The more serious moral mirror in Crossmatch is the territory that few would dare to tread: the kidney mafia, organ trafficking, bending the law, exploitation of the poor in kidney transplantation, lack of a transparent registry for organ donation, the legal and moral dilemma of compensation for organ donation. Importantly, this moral mirror in Crossmatch shines blindingly in our eye asking us questions: do you know what it means to be poor? The desolation beneath the label of poor? How many times do the rich donate kidneys to the poor? Is there ever a free lunch at a private hospital?

Our collective crime: poverty

Miranda reflects the moral mirrors on us for the sole purpose of telling her story. Her tender observations about how people live, talk, move, rationalize, love and sacrifice are all for the purpose of storytelling. Her power of observation is consistent across the slums of Wanathamulla to the bungalows down Rosmead place. After reading Crossmatch you cannot afford to be Sri Lankan and be divorced from the collective social crime called poverty that we all contribute to, by commission or omission. For poverty is the one crime that has the direct or indirect consent of society. The crisp humorful language, sharp precise observation, humane narration without judgment- all these make it a good read. Noteworthy is Miranda’s security as a writer who doesn’t feel the need to climb on top of her story.

Perhaps the only anti-climax of Crossmatch is its epilogue. In an uncharacteristic bout of a need to tie up too many ends, Miranda writes an epilogue reminiscent of last minute commentary over movie credits in a Hollywood or Bollywood movie stating how each character ended up happily. The last line of the main novel (prior to epilogue) “But that doesn’t stop me from dreaming “is disappointing and reminiscent more of a line out of a Hallmark card. Miranda could have written a killer last line. The epilogue takes her matter of fact story telling a bit too far and negotiates a mediocre “happily ever after” to a thought provoking , disturbing story meant to induce a bit of reader- insomnia.

Yes, Crossmatch makes us stand in front of a difficult moral mirror.

To Carmel Miranda I say: “You. Go. Girl!!!!”

(Dr Santhushya Fernando is a senior lecturer in Medical Humanities at the Faculty of Medicine, University of Colombo)

 

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Midweek Review

Proposed Plantation University and its economic benefits

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by Dr L M K Tillekeratne
Former Director of the RRI and UNIDO consultant in Rubber Processing

President Gotabaya Rajapaksa’s recent address to the nation made an emphatic reference to the establishment of a Plantation University by amalgamating all major crop research institutes, such as Tea Research Institute (TRI), the Rubber Research Institute (RRI), Coconut Research Institute (CRI), Sugarcane Research Institute (SRI). Of these four research institutes, two were established by British rulers over a century ago. The core mandate of the research institutes was to develop the respective agricultural crops, as the plantation crops generated the highest amount of foreign exchange for almost four decades.

With the advent of the free market economy in late 1970s, though the remittances from migrant workers and revenue from the garment industry surpassed the foreign exchange earnings of the plantation sector, the plantation industry continues to play a dominant role in terms of foreign exchange and employment.

Hence, the President’s thinking that the creation of a national university exclusive for the plantation sector is a far-reaching vision that could transform the plantation sector by increasing land productivity and by developing the value-added products manufacture particularly in the case of rubber that the country desperately needed at this juncture. In this context, that the article written by J. A. A. S. Ranasinghe, Productivity Specialist and Management Consultant in a leading English newspaper was a comprehensive analysis of the justification of the creation of a national university for the plantation sector. Such an incisive analysis should have come from a scientist initially.

Dearth of Scientists in the Research Institutes

I whole-heartedly agree with Mr. Ranasinghe on his assertion that research institutes are functioning today in isolation without trained staff to carry out research projects. As he has very correctly identified the dearth of scientists of all the research institutes has hampered the research programmes, and that in turn has led to the deterioration of the productivity of all the sectors during the last two decades. Thus, bringing all the scientists and resources under one umbrella is the need of the hour and that could be accomplished relatively at a short time by establishing an exclusive university for the plantation sector.

The President’s far-reaching vision will be a turning point in producing scientists to run the plantation industry. At a time when most of the other countries in Asia and Africa are increasing their productivity levels of the plantation crops, it is unfortunate that Sri Lanka is far behind in terms of research during last two decades, though its Tea and Rubber research institutes are internationally known.

Downfall of the Rubber Industry

It is sad that in Sri Lanka, the first country in the world to have a rubber plantation established outside Brazil and distributed planting material to other countries mainly in Asia to grow rubber, rubber production has plummeted significantly for the last 25 years. The countries that learnt rubber planting technology from the scientists of Rubber Research Institute of Sri Lanka, such as Myanmar, Cambodia and Vietnam, have already been able to overtake us both in terms of production and land productivity over the past two decades pushing Sri Lanka down to the 12th place as a NR producer at present. I strongly believe that the situation regarding tea is either the same or even worse.

As Ranasinghe has correctly pointed out in his article, our productivity has fallen to 50% of what we produced a decade ago while countries like Myanmar and Cambodia have been able to double their annual production during this period.

Dearth of Plantation Technologists

It is true that we have agricultural universities producing agriculture graduates. But they do not specifically focus on crops like Tea and Rubber, and cannot undertake the task of increasing productivity by means of applying new technology introduced regularly to overcome issues related to agronomy and tapping. Fresh Agriculture and Science graduates who joined the plantation sector lack the skills and knowledge the plantation industry demands and this mismatch has resulted in a shortage of plantation technologists with required competency levels.

Distinctive Advantages of Plantation University

The agricultural graduates of Sri Lankan universities, however, would be in a very authoritative position in that they can cover a wide variety of other crops better than the graduates getting their agricultural degrees overseas. Agriculture and science graduates should necessarily possess the required field exposure and experience to find gainful employment in plantation sector. Hence, fresh graduates who join the plantation sector will have to work for at least 10 years to be an expert who can identify problems and sort them out on them individually. The industry can ill-afford to wait for such a long period to produce talented plantation expert or qualified scientists, given the dearth of scientists in the country. As Ranasinghe has correctly mentioned, there is a severe shortage of scientists virtually in all departments of research institutes to tackle problems in the industry, which will badly affect the research institutes, if the present system is allowed to continue. More than 50% of the raw rubber and latex end products industry is imported at competitive prices. The coconut production is sufficient for the local consumption and there is no surplus for export in the form of oil or DC.

Exodus of Research Scientists to join Universities

Most of the scientists trained for special mandates in the research institutes have already joined the national universities purely due to better salaries and perks. However, according to the situation existed in early 1960s, those who joined research institutes for developing the agriculture sector were paid higher salaries than those who joined universities, considering their contribution to the development of the economy and the difficult conditions under which they work in remote areas.

Hence, the science graduates’ first choice was research institutions. Today, it is the other way around, and only those who cannot find employment in universities and with low merits join research institutes to get post graduate training utilising the limited number of foreign training scholarships offered to research institutes and get qualified to join universities. Empirical studies have shown that trained researchers with special skills to tackle problems in the plantations have become misfits as academics.

Ad hoc recruitment criteria

The situation that existed prior to the late 1980s was totally different even with regard to recruitment criteria. It is due to the shortage of graduates produced by local universities due to closure of the university education for almost three years, due to the insurrection. There was a severe shortage of special degree holders and hence a decision was taken by the government to allow general degree holders in places where previously only special degree graduates with a class were recruited as research assistants in research institutes. Since then the quality of research produced by the research institutes has suffered.

The distinctive benefit in the President’s proposal is that in the future we might be able to produce graduates capable of tackling problems in the plantation sector with their adequate field exposure and hands on experience during their undergraduate studies.

In addition, there will be a good opportunity for institutions like TRI and RRI with international reputation to attract foreign students for training in Sri lanka thereby earning additional revenue to the country as the UK, India and Malaysia do even without having such recognition. If the proposed national plantation university is properly run, it will be quite possible for them to sustain adequate revenue from foreign students without depending purely on annual Treasury grant. Even now trainees from countries like Myanmar, China, Cambodia, Ethiopia and even from Malaysia have got their research assistants trained at these two crop institutes under international grants.

Contribution to the national economy by way of enhanced production

On a hypothetical basis, if the production of rubber in the country is increased to 135,000 Mt, which was the amount produced years ago, purely by increasing the land productivity, without even increasing the planted area, the country can reap maximum benefits from the fast-increasing rubber prices in the world market. Rubber was selling at around Rs 100 to 150 per kg during the last half a decade. Surprisingly, it has gone up to almost Rs 450 per kg now and the situation is expected to increase further with time to come owing to the demand for NR on account of the Covid-19 pandemic.

If the production is increased to 135,000 Mt, additional revenue the country can enjoy would be (Rs 450 x 50000 x1000) Rs 22.5 billion annually.

We should not lose sight of the fact that due to the shortfall in the supply of rubber, a considerable amount of NR and latex is imported by our rubber products manufacturers for value added products manufacture at a cost of over Rs 30 billion.

If this extra production is used to produce goods such as surgical/examination gloves for which the demand is fast increasing due to Covid-19 spread, the additional revenue country can gain is over 200%. It will be possible to create more employment opportunities as well.

Arduous task for the new Minister

The task before Economic Development Minister is to consider how best to improve the economy in bad state. This objective can be achieved in less than a year by getting the neglected rubber farms into tapping and by using techniques like lightly stimulated low frequency tapping and by utilising proven new techniques like rain guards to minimise crop losses due to rain. The additional cost involvement for these developments is insignificant and the time taken is less than a year.

New planting and replanting are two other ways of increasing the crop; they are costly and take nearly a decade to give a reasonable crop increase. Further, there is no guarantee that the improved rubber prices will remain high until then. However, replanting, and new planting should be continued according to the RDD targets.

Another factor that caused a drop in the rubber production was the removal of the extension services from the research wing and its attachment to the subsidiary function of the Rubber Development Department owing to an illogical decision taken by the then government almost 25 years ago. Today, the RDD is functioning in isolation ignoring the recommendations of the RRI. This has been the main cause for the drop in productivity of rubber farms in Sri Lanka. For example, the population of low yielding clones like PB 86 are still distributed and the clone population in the country is an utter mess.

Undoubtedly, everyone looks forward to the establishment of the plantation university.

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Midweek Review

“Madam” and her Wards

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By Lynn Ockersz

Six anxious, awkward teenage girls,

Are following their “Madam” close at heel,

To the rundown Spa hardly seen in the busy street,

But sought by restless men when darkness sets in,

But in the Isle fabled for its charity,

No one looks askance at this sight,

No one dare asks questions that matter;

Nor is accountability exacted from office holders;

But posers like the following may be asked,

By those who choose to care for the ‘nation’,

Now that Ishalini too has brought things into focus:

Isn’t this an induction into prostitution?

What lured the girls away from school,

And made them walk footloose on the streets?

Would the “Madam” be ever taken to task?

Or would she be allowed to go, with no questions asked,

When a swoop by the uniformed gentry,

Thrusts the girls into a police lockup,

And makes them wilt there sadly,

Though into primal youth they are about to bloom.

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