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Will SL govt. do better than UK Labour administration?

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PM Starrmer

By Dr Upul Wijayawardhana

Monumental elections were held both in Sri Lanka and the UK recently. Whilst optimism is still running high in Sri Lanka, this emotion seems to have faded fast in the UK. Though many political observers predicted an autumn election in UK, Rishi Sunak sprang a surprise by going for an early election in July with disastrous consequences for the Conservatives, who had been in power for 14 years. He would have done much better in an autumn election, and Rishi Sunak is yet to explain why he went for an early election; it may well be that he had so much of backstabbing from his colleagues that he decided ‘enough is enough’.

It was widely expected that Labour would win so much so that even captains of the industry, who usually support Conservatives, started singing the praises of the then shadow Chancellor, Racheal Reeves, a Master of Economics degree holder from the prestigious London School of Economics. What was totally unexpected was the magnitude of the Labour victory, which was partly due to the right-wing Reform party splitting the Conservative vote. With an increase of just 1.6% of the share of the vote, Labour was able to gain 211 seats, having 412 out of 650 parliamentary seats. With a technocrat, the former Director of Public Prosecutions, Keir Starmer as the Prime Minister and the economist Rachel Reeves as the Chancellor of the Exchequer, a new dawn was anticipated and optimism was running high.

One hundred days later, it is now like a false-dawn! One MP has already quit the Labour party, the fastest exit of an MP from a governing party in the UK. Keir Starmer’s approval ratings have fallen to minus 26 and Labour’s to minus 21. Almost half of those who voted for Labour feel let down by the government, and Conservatives who were trailing Labour by over 20 points, at the time of the election, are now neck and neck with Labour. What a change in a matter of just 100 days!

What are the reasons for this drastic change in fortunes? Top of the list is sleaze, the Prime Minister himself topping the table. Keir Starmer has been receiving personal gifts estimated to be worth over £100,000 from Lord Waheed Alli, the biggest donor of the Labour party. Not only had he received large sums for suits and eyeglasses but also his wife has received donations for her dresses! Many other Cabinet members, too, have been beneficiaries of Lord Alli’s generosity. According to British law, it is not illegal, as long as these are declared in the book of members interest, which they have done but what they have not been able to defend is the immorality of these actions.

Sue Gray, a senior civil servant, whose damning report regarding the parties held in Downing Stret, during the Covid epidemic, led to the resignation of Boris Johnson, was recruited as the chief of staff by the then Leader of the Opposition Keir Stramer, breaking existing conventions. When he became PM, she was naturally chosen to be the Chief of Staff at Downing Street, but she had insisted on a salary increase of £5,000 over that of the previous holder.

Interestingly, this increase would mean that her salary would exceed that of the PM! When other political advisors, whose salary have been reduced, leaked this information to BBC, Keir Starmer initially denied but later had to admit that it was his decision! Sue Gray’s son who got elected as a new MP from the Labour Party was rewarded with a position in government. However, it is extremely unusual for any MP with no experience at all to get any position like that. Further, it was disclosed that he too had received £10,000 from Lord Alli. As things got too hot, Sue Gray had no choice but to resign, reflecting very badly on Starmer’s judgement.

The deputy PM, Angela Rayner was seen, in a widely shared YouTube video, to be raving in a DJ booth in Ibiza and it again was a freebie. Sleaze never seems to end!

Next was Taylor Swift’s world tour creating a ‘Taylor-gate’ for the Labour government. When it transpired that the PM as well as the Home Secretary had received free tickets for her tour, PM agreed to pay for them! Worse was yet to come; it has now transpired that Taylor Swift was given ‘Blue Light’ top security by the Metropolitan Police, which is usually reserved only for royalty and very senior politicians.

It was reported in the British newspapers that the Scotland Yard was reluctant to do so but was pressured to do so by the Home Secretary as well as the Labour Mayor of London, who too was a recipient of free tickets! Worse, some papers reported that they had pressured the Met through the Attorney General! Why the security for a popstar who earns billions should be provided at taxpayer’s expense is a question that needs urgent answers, especially when one of the first acts of the Labour government was withdrawing the winter heating allowance from poor pensioners!

Rachel Reeves decision to tax the rich, especially the non-domiciled, has led to a flight of the rich out of the UK and her gloomy predictions of the economy has backfired. One of the first acts of the new government was passing legislation strengthening trade union action. Meanwhile, Starmer is chairing a summit to attract investment. In this mess, no one knows where the UK is heading!

We blame our politicians in Sri Lanka but it looks as if all politicians, the world over, were equally bad! It is hoped that the new government in Sri Lanka has learned lessons not only from their predecessors but also from what is happening around the world. For sure, we do not want it to go the UK way.

Anura Kumara Dissanayake (AKD), as the first president to be elected without a majority, needs to tread carefully but some of the appointments made by his government have raised many eyebrows.

Equally, some of the claims made by his supporters is hilarious. Their claim about the smallest Cabinet is true but it is an attempt to make a virtue of necessity. If AKD had waited till his successor in Parliament was sworn in before dissolving parliament, he could have had a Cabinet of four.For the sake of Sri Lanka, I do hope that AKD and the government due to be elected, will do better than UK’s Labour government.



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Opinion

Sally Hulugalle

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Sally Hulugalle

Sally Hulugalle was a vibrant presence, and I am only sorry that I got to know her only over the last fifteen years or so. This was because her husband, Arjuna Hulugalle, who was distantly connected to my family through a Kurunegala link, got in touch with me in the aftermath of the war, for he was involved in various projects to help the people of the north.

I was able to get for his very worthy initiatives a lot of support, all on a small scale, from the Japanese government, through their hyper-active Deputy Ambassador, Mr Ishizuka, with whom I had bonded well from the time I took over the Peace Secretariat.

I would visit Arjuna at his house, and there I met his wife Sally, the daughter of a Civil Servant whose distinguished children included Barbara Sansoni. Sally was dedicated to social service, and was deeply concerned about the plight of women and children who suffered from neglect.

Having seen the appalling conditions at Mulleriyawa, where many women were incarcerated arbitrarily, given abuse of the Vagrants’ Ordinance, she set up NEST along with my old friend Kamini de Soysa. It worked at what is called the half way house for women meant to be released, but who rarely were, because they had nothing to go to. NEST gave them occupational therapy which provided a purpose in lives that were otherwise empty.

NEST also set up centres round the country which provided support to women and children in need. There were four of these when I first found out about them, though the one in Galle had to close. The other three, in Hendala and Dumbara and Kahatagasdigiliya, continue to provide yeoman service, the first two in houses belonging to NEST, the one in Dumbara having been set up after Sally received a cash prize from Norway for her work. Using what was given to her personally for those less fortunate was second nature to her.

Sally understood, in a way many of those in government responsible for those who fall through the net do not, the need for counseling, for listening to people in need, and for providing often very little things that made a substantial difference to their lives. She participated readily in the committees I set up when I was Adviser on Reconciliation to look into the plight of women and children, our recommendations extending to the rest of the country too, for I realized that government had not tried to coordinate the work of social service officials at divisional levels, and a few simple guidelines would have worked wonders.

But Mahinda Rajapaksa was not really interested in my advice and, though we had a thoughtful Ministry Secretary, Eric Illapayarachchi, he had to work with a neanderthal Minister who could not care less for the deprived. I could only think it sheer wickedness, that those in authority would not work swiftly to get rid of the Vagrants Ordinance, an archaic British law, which I was told was the only way prostitution could be stopped. That other women were swept into the net, and the way to stop prostitution was to make it illegal, not take in anyone on suspicion, were concepts beyond them.

I had another chance to make a difference when, as Chairman of the Tertiary and Vocational Education Commission, I set up a Health Sector Council. That did good work, under Dr Narme Wickremesinghe, but when I was sacked it, though it did much for nursing and pharmacology, lost interest in the counseling component of its brief, and Sally and her great friend Kusala Wettasinghe ceased to go to meetings. And since I lost my position on the National Education Commission, the efforts I had been making through the Sub-Committee on General Education to develop counseling in schools also came to naught.

But when I reflect on the failure of these efforts, I think too of the great work done by private initiatives, and how the intensity of Sally’s commitment has made such a difference to so many. This year, seeing the work of the centres at Hendala and at Kahatagasdigiliya, and the devotion of the staff to her memory, I was struck again by the way she transformed her passion for social welfare into practical support for so many. She will be greatly missed by hundreds outside the charmed circle in which she was born.

Rajiva Wijesinha

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Opinion

Blueprint for economic empowerment in Sri Lanka’s gig economy

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“Creating 300,000 Online Jobs:

By Dammike Kobbekaduwe,
FIPM (SL), Member-CIPM-SL, MBA(HRM)

Objectives of the Article

Assess

the viability and economic impact of creating 300,000 online jobs in Sri Lanka.

Present

a bankable business plan for investment support from financial institutions.

Outline

a detailed cost-benefit analysis, supported by viability ratios for funding eligibility.

Establish

a sustainable financial and operational model for building a skilled gig workforce.

Sri Lanka’s gig economy presents a compelling solution for youth employment, targeting 300,000 online jobs for young people, particularly those who completed GCE OL. With a goal of generating substantial monthly income streams, this project seeks to address the country’s economic challenges and stimulate growth through digital employment. While a monthly earning a realistic starting income of $300–$500 is achievable and scalable, infusing approximately $50 million monthly into the economy once the workforce reaches full capacity.

To ensure financial viability and attract investment, we conduct a comprehensive economic analysis. This document highlights key investment metrics, including viability ratios, projected cash flow, and a cost-benefit breakdown to support the proposal as a bankable doEconomic Analysis and Viability

This project’s financial feasibility and appeal for funding rely on assessing profitability and return potential. Calculations are based on the cost of infrastructure, worker setup costs, and recurring expenses.

1. Capital and Operational Costs

Capital Setup Per Worker

Laptop (16GB RAM):

LKR 300,000 (one-time purchase)

Data Plan:

LKR 8,000 per month

Electricity:

LKR 8,000 per month (solar option as a long-term cost-saving measure)

Annual Cost Per Worker

One-time Equipment Cost:

LKR 300,000

Recurring Monthly Costs:

LKR 192,000 (LKR 16,000 x 12)

Total Yearly Cost Per Worker

Year 1:

LKR 492,000

Year 2+ (Excluding Laptop):

LKR 192,000 per year

Total Initial Investment for 300,000 Workers

Laptops:

LKR 90 billion

Year 1 Recurring Costs:

LKR 57.6 billion

Initial Year Investment Requirement:

LKR 147.6 billion

2. Projected Revenue and Cash Injection

A monthly earning potential of $300–$500 per worker in Sri Lanka’s gig market (based on average entry-level online job earnings globally) provides realistic targets for cash generation.

Monthly Cash Injection at Full Capacity

Minimum Revenue Goal (300,000 workers at $300):

$90 million/month

Maximum Revenue Goal (300,000 workers at $500):

$150 million/month

Expected Economic Contribution:

$50 million/month as a sustainable average.

3. Viability Ratios and Business Metrics

To validate the project’s financial health, banks and investors can consider the following key metrics:

A. Return on Investment (ROI)

The ROI assesses the profitability relative to costs.

See FIG 1

For Year 1 (Initial setup + recurring costs):

Total Annual Revenue:

$90 million * 12 months * 300,000 = LKR 324 billion (at $300/month per worker) See FIG 2

Interpretation:

A 119.5% ROI suggests strong profitability, with returns significantly outpacing the initial investment within the first year, making it attractive for lenders and investors.

B. Break-even Point (BEP)

The BEP indicates when revenue will cover initial costs.

See FIG 3

For a $50 million monthly injection:

Interpretation: A break-even within three months reflects a rapid recovery period, underscoring the project’s viability. See FIG 4

C. Debt-Service Coverage Ratio (DSCR)

To ensure sufficient earnings to cover debt obligations, DSCR is critical for bank funding. See FIG 5

Assuming monthly operating income of LKR 3.24 billion and an estimated debt service of LKR 1.5 billion:

Interpretation:

With a DSCR above 2, the project is well-positioned for loan approval, demonstrating strong debt repayment capacity. See FIG 6

Implementation Plan for the National Gig Workforce

Phase 1: Training and Equipment Setup

Digital Literacy Programs:

Partner with local institutions to offer foundational training.

Laptop Financing:

Government-backed financing for laptops and solar installations for sustainable power solutions.

Phase 2: Skill Development and Placement

Skill Development Centers:

Partner with international e-learning platforms and host training boot camps.

Placement Programs:

Establish online job-matching platforms to connect workers with international clients.

Phase 3: Scaling and Economic Integration

Tax Incentives:

Offer tax breaks to local businesses hiring from the gig workforce.

Freelancer Support Network:

Create a national freelancer association for continued training and mentorship.

Resources Required For Workers:

Training:

Digital and language skills to enter global markets.

Equipment:

Laptops with financing options.

Connectivity:

Affordable data plans or subsidies.

For Stakeholders:

Government Initiatives:

Funding for training and incentives.

Private-Sector Partnerships: Skill development programs and job portals.

Financial Institutions: Loan products tailored for workers’ needs.

Conclusion

This plan offers a scalable solution to Sri Lanka’s unemployment crisis, particularly for young people with limited formal education. By creating 300,000 online jobs and targeting a monthly cash inflow of $50 million, the initiative supports economic resilience while empowering youth with valuable skills. A financial model based on solid viability ratios makes this project attractive to lenders, ensuring a rapid return on investment and sustainable growth.

References

International Labour Organization. (2023). The Gig Economy: Opportunities and Challenges for Youth Employment in Developing Economies. Available at: https://www.ilo.org/

Upwork. (2023). Freelancer Earnings and Trends Report. Available at: https://www.upwork.com/research

World Bank. (2022). Digital Jobs and Economic Growth:

A Guide for Developing Nations. Washington, DC: World Bank Publications.

Fiverr. (2023). Freelancer Earnings and Skill Development:

A Global Perspective. Available at: https://www.fiverr.com/research

Coursera. (2023). Skill Trends in the Digital Economy:

A Report on Online Education in Emerging Markets. Available at: https://www.coursera.com/research

Sri Lanka Department of Census and Statistics. (2023). Youth Unemployment and Educational Attainment: Annual Report.

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Opinion

Hospitals and corruption

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On December 2, in The Island Cassandra CRY saw the state of hospitals and corruption as separate issues, but I believe they are deeply interconnected. The dismal condition of hospitals is a direct consequence of systemic corruption. Over the past several decades, trade unions, driven by self-interest, have focused solely on advocating for their members’ rights, often at the expense of their responsibilities. This trend has affected not only hospitals but also other government and some private sector institutions.

Currently, the country is led by a political party that has heavily relied on its trade unions for promotion and political gain. Given this close relationship, restoring order should be relatively straightforward. A simple directive from the relevant ministers to their allied union leaders could be enough to initiate meaningful reforms.

S K Muthukumara

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