Dollars and conscience (2022)

Dollars and conscience (1)

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Friday 5th August 2022

Sri Lanka’s struggle to shore up its crumbling economy continues, and there are no signs of promised foreign assistance materialising anytime soon. The Cabinet has just retained the services of some foreign firms for external debt restructuring, which is one of the main conditions for the IMF bailout package. When the country finally decided to ask for IMF help, after months of dilly-dallying, which took a heavy toll on its foreign reserves, it expected some bridge loans to tide it over until the finalisation of IMF assistance. But it has been left to fend for itself; only India has extended some tangible help, which has stood it in good stead. At this rate, the IMF is likely to take a month of Sundays to deliver promised assistance, and the economic situation here is sure to take a turn for the worse, further aggravating social unrest, which inhibits economic recovery.

Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe has expressed displeasure at the manner in which local exporters are handling their dollar earnings. Taking part in a recent Hiru TV discussion, he said Sri Lanka’s export proceeds amounted to about one billion dollars a month, but only 20% of them were converted to rupees, and exporters claimed that loan repayments and raw material imports, etc., accounted for 80% of their foreign earnings. Disputing their much-publicised claim, Dr. Weerasinghe said that according to the CBSL data, those percentages were not realistic, and about 50% of export proceeds should be brought into the country through the banking system and converted to rupees. If the exporters did so, the country would have enough dollars for fuel imports, he added.

Everyone knows that most Sri Lankan exporters park a sizeable chunk of their foreign earnings overseas while the country is desperate for forex. The question is how to ensure that the country benefits from its export proceeds the way it should. Many economic analysts have been asking this question during the past several years, but there has been no satisfactory answer, much less meaningful action to prevent forex rackets. Jayampathy Molligoda, in his article, ‘Why is the Singapore dollar strong and the SL rupee weak?’ published in this newspaper on Wednesday (03), discussed some vital issues pertaining to export earnings. Pointing out that the private sector had benefited from low interest rates, and the float of the rupee, he asked whether the country was getting export proceeds in keeping with the applicable regulations and, if not, whether the CBSL strictly enforced penalties for noncompliance.

As for the government’s efforts to boost the forex inflow by removing impediments thereto, the so-called moral suasion alone will not do. There are some exporters who really feel for the country and play a straight bat, as it were, but sadly they are only a microscopic minority. The need for tough laws to curb forex rackets cannot be overemphasised. Some loopholes in the Exchange Control (FE) Act have enabled unscrupulous exporters to leave most of their dollars overseas while the Sri Lankan economy is screaming, and they have to be closed as a national priority.

Leniency breeds irregularities in the world of business. This is what has happened since 2017, according to the Opposition, which says the original FE Act, which was designed to prevent questionable forex outflows, was replaced with a new one in 2017 under the Yahapalana government purportedly to liberalise the flow of foreign exchange. The move was obviously aimed at helping the UNP cronies, some of whom had fallen foul of the law. The new Act, according to the Opposition, did away with provision for the mandatory confiscation of assets of the forex law violators; under the previous Act, such violations were criminal offences.

The FE Act, which is said to have benefited forex racketeers, has to be changed and remedial action taken to regulate export proceeds, which are a sine qua non for resolving the current economic crisis. Ironically, the aforesaid questionable changes to the FE laws were introduced when Ranil Wickremesinghe was the Prime Minister in the Yahapalana government. Its ill-effects are being felt under his presidency!

Now that it has been revealed that the exporters’ skulduggery costs the country a huge chunk of export proceeds, and has stood in the way of efforts being made to raise dollars for fuel imports, etc., the government has to do everything in its power to strengthen the foreign exchange laws. Fairness demands that the wealthy exporters who benefit from a host of concessions and the rupee depreciation, make a significant contribution to the ongoing efforts to revive the economy and ameliorate the suffering of fellow citizens. Exporters themselves will gain hugely from the availability of dollars for imports, especially fuel, which is essential for economic recovery and socio-political stability.

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Dollars and conscience (2)

Thilina Walpola

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Editorial

Dollars and conscience (4)

Published

18 hours ago

on

2022/09/21

By

Sahan Weerasooriya

Dollars and conscience (5)

Wednesday 21st September, 2022

On seeing how politicians are deified in this country despite its relatively high literacy rate, one wonders whether power politics has evolved into a religion of sorts here. It is not only the ordinary people who touch their forelocks before politicians; many religious leaders also make a public display of their servility when they meet the ruling party grandees, and at times their conduct could be unforgivably cringeworthy. But all is not lost; there are still some outspoken prelates who dare speak truth to power and even give the powers that be what for.

An instance of two prominent Buddhist monks shining a light on the self-aggrandisement of politicians and censuring them has been reported. What these prelates have done is as uplifting as the recent victories clinched by the national cricketers, netballers and cricketing legends.

Chief Incumbent of the Mihintale Rajamaha Viharaya, Ven. Walawahengunawawe Dhammaratne Thera deserves public plaudits for having told some home truths to a group of ruling party politicians led by Prime Minister Dinesh Gunawardena, on Sunday. He did not mince his words when he said the present-day rulers were responsible for the country’s predicament, and the people’s suffering. He urged them to get their priorities right and do their utmost to resolve the crisis and grant relief to the public instead of busying themselves with party reforms. He also asked them to learn to let go of power, and hold an election in six months.

If Mahinda Rajapaksa had retired as the President at the right time, he would have become a national hero, the Thera said, condemning dynastic politics and stressing that the practice of sons inheriting leadership from their fathers had to end, and the current leaders were mistaken if they thought they would be able to continue it.

Dhammaratne Thera must have struck a responsive chord with the public when he told the PM and others that they had to bear in mind that the people were so fed up with politicians that they were asking all 225 MPs to go home. There was absolutely no need for more ministers, he said, asking politicians why they could not practise austerity during the country’s worst ever economic crisis. Politicians had all the luck, and the public was being burdened with taxes, he pointed out, blaming them for engaging in all kinds of business activities such as running liquor bars. A slogan coined by the advocates of anti-politics comes to mind: Amathilata kaar, golyanta baar, janathawata soor — cars for ministers, liquor bars for their henchmen and inebriation for the people’.

Chief Incumbent of the Mirisawetiya Temple Ethalawetunawewa Gnanathiklake Thera also said a mouthful when the PM, accompanied by a group of ruling party politicians, visited him, in Anuradhapura. Pointing out that one should not live beyond one’s means, he called for an austerity drive. It is however doubtful whether he succeeded in knocking any sense into the government bigwigs.

Meanwhile, the members of the Maha Sangha who are raking the unscrupulous politicians and their cronies over the coals for ruining the country and inflicting suffering on the public should lead by example. They themselves must adopt the austerity measures they preach, scale down religious functions and consume electricity sparingly in view of the present crises. Some of them are seen moving about in flashy gas guzzlers while the country is pinching and scraping to pay for fuel imports. Example is said to be better than precept.

Unless politicians got their act together, the religious leaders would be compelled to take the lead in getting rid of them by mobilising the masses, the Mihintale Nayake Thera warned. The ordinary people battling the pangs of hunger and gnashing their teeth on seeing the government politicians and their kith and kin leading the life of Riley at their expense must be looking forward to that day!

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Editorial

Dollars and conscience (6)

Published

2 days ago

on

2022/09/20

By

Sahan Weerasooriya

Dollars and conscience (7)

Tuesday 20th September, 2022

Two Cabinet ministers have crossed swords over rice imports. Trade Minister Nalin Fernando has sought to rubbish Agriculture Minister Mahinda Amaraweera’s recent claim that imported rice should be fed to farm animals as it is unfit for human consumption. Why Fernando has seen red is understandable; the Agriculture Minister’s statement serves as a damning indictment of the Trade Ministry, which is responsible for importing rice. Amaraweera would have the public believe that he is trying to protect the interests of the local farming community by discouraging the public from consuming imported rice, and making it available to the livestock farmers who are facing a severe animal feed shortage. The question is why he did not raise objections, at Cabinet meetings, to the import of rice which, he says, is tainted with harmful agrochemicals? If imported rice contains toxins, then how can it be considered fit for animal consumption?

The practice of importing rice and selling it as animal feed is not of recent origin. It has been going on for decades. It is part of a strategy to further the interests of the Millers’ Mafia. Big-time millers curtail the release of their rice stocks to the market weeks before the commencement of paddy harvesting, thus causing prices to skyrocket, and prompting the government to import rice. Thereafter, they release enough rice to the market, bringing down prices so that they could buy paddy for a song. When locally-produced rice, which suits the palates of Sri Lankans more than foreign varieties, is freely available, imported rice stocks in the government warehouses end up as animal feed. Having exploited farmers and filled their silos with paddy, the big-time millers starve the market again, making the prices of rice rise steeply. Having sold its rice stocks as animal feed, the government finds itself in a situation where it cannot make effective market interventions to regulate prices. This is the name of the game. We have been writing about this for years but to no avail.

The state machinery is geared towards helping serve the interests of the wealthy rice millers who grease the palms of politicians and public officials. Small and medium-scale millers are dependent on bank loans to buy paddy, but banks do not release funds until the Millers’ Mafia has bought paddy on the cheap. By the time others start purchasing paddy, prices are high. The government does not allocate enough funds to the Paddy Marketing Board (PMB) so that the wealthy millers will be without competition. Thankfully, the Bank of Ceylon has taken some meaningful steps to sort out this problem, which however cannot be solved once and for all without state assistance; the government is doing precious little to help farmers; the Treasury is not providing security for the loans the PMB asks for, we are told.

The Agriculture Minister makes a lot of noise. The onus is on him to enable the PMB to secure enough funds ahead of the paddy harvesting time. He should also prevail on the Finance Minister to ensure that loans are granted to small and medium-scale millers expeditiously to compete with the Millers’ Mafia. If the government takes action to make funds available to the competitors of the powerful millers to purchase paddy, the interests of both the farmer and the consumer could be protected.

We are not short of politicians shedding copious tears for paddy farmers in dire financial straits. But all of them are responsible for the predicament of the farming community. Powerful millers openly defy the Consumer Affairs Authority, and flout laws with impunity thanks to their political connections. Siripala Gamlath, the owner of Nipuna Mills, blamed for hoarding paddy, and jacking up rice prices, is an SLPP MP. Dudley Sirisena, who owns Araliya Mills, also accused of hoarding and market manipulations, is a younger brother of former President Maithripala Sirisena, who is Minister Amaraweera’s party leader.

In 2012, Sirisena blamed the UNP for having destroyed the PMB and created a situation where the paddy farmers were exploited in every conceivable manner. He said the UNP had sold the Polonnaruwa PMB building worth more than Rs. 50 million for a mere Rs. 275,000 and used it as a party office. He accused the JVP of having torched as many as 240 Agrarian Service Centres with paddy storage facilities in the late 1980s. Three years later, he closed ranks with the UNP and the JVP to secure the presidency! Today, the SLPP and the UNP have joined forces to protect their mutual interests. This may explain why anti-politics is on the rise in this country, and the resentful people take to the streets, demanding the ouster of all 225 MPs.

Let Amaraweera and other government politicians bellowing rhetoric and promising to help the local farming community, while living high on the hog at the expense of the public, be urged to fish or cut bait.

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Editorial

Dollars and conscience (8)

Published

3 days ago

on

2022/09/19

By

Thilina Walpola

Dollars and conscience (9)

Monday 19th September, 2022

An unprecedented gathering of heads of state, and people is expected in London, today, for the funeral of Queen Elizabeth II, who made history and became part of it. Millions of people have waited in a long queue for hours on end to file past her coffin during the past several days. Such is their love for her. The Queen earned the admiration of people across the globe, and it is only natural that the entire world is mourning her death.

While a historic event is unfolding in London, it is time for reflection. The government of Sri Lanka is under fire for having declared a holiday on account of the Queen’s funeral. Its critics argue that the British royal family is a symbol of colonialism, and there is absolutely no reason why the victims of imperialism should make such gestures of respect.

Colonialism cannot be countenanced on any grounds. Former colonial powers have prospered by means of ruthless exploitation, and the wealth systematically robbed from their colonies for decades, if not centuries, constitute the foundations of their current economic empires. The grand plunder provided the colonisers with the capital to leapfrog others, especially during the Industrial Revolution, while their colonies remained mere suppliers of raw materials for their industries. The British monarchy has been a symbol of that ugly past. However, the act of mourning Queen Elizabeth’s death is not tantamount to celebrating colonialism, for two reasons. She presided over the decolonisation process although it may be argued that the UK only made a virtue of necessity by letting go of its colonies, given the capitalist bloc’s fear of the rise of communism, and freedom struggles, especially the one in India. The Queen became a tower of strength for her nation and set an example to the self-proclaimed leaders in other countries like Sri Lanka. Sadly, the only thing our so-called leaders seem to have learnt from her is to cling on to the throne until death!

Monarchism is an anachronism in this day and age. However, the real problem is not the present-day monarchies attenuated by democracy but the fact that some of the popularly-elected leaders try to be monarchs, and ruin their countries, as has been Sri Lanka’s experience.

The British left us in 1948, but the so-called self-rule has made this country a mendicant state, which is begging for funds even from the ‘new states’. Colonialists took away our wealth. Our democratically-elected, patriotic leaders have done likewise; they have stolen public funds to the tune of billions of dollars and stashed them away in offshore accounts, as is public knowledge. People are starving; malnutrition is rampant among children, and the country cannot pay back its debts.

The British destroyed Wellassa (meaning ‘one hundred thousand paddy fields’) in 1818 to crush a rebellion against the empire. They used guns and swords for that purpose. A little over two centuries on, a democratically-elected President, given to wrapping himself in the flag, ruined all paddy fields in the country with a single stroke of his pen! He banned agrochemicals overnight, causing massive crop losses and worsening the pecuniary woes of the farming community. The British built the Trincomalee oil tank farm, but the present-day patriotic leaders who puff out their chests and sing the national anthem with gusto, at the Independence Day celebrations, cannot even effect repairs to these priceless assets, and are shamelessly handing them over to foreigners for a song!

No external powers forced our leaders to undertake the Ozymandian projects which have become huge liabilities and worsened the country’s indebtedness, did they? Former colonial rulers are in no way responsible for the cancerous growth of bribery and corruption, and criminal waste of public funds here.

It is high time the hapless Sri Lankans, who have made the colossal blunder of electing misfits as the rulers and expecting national progress, stopped bashing foreign monarchs and resolved to get rid of their ‘kings and queens’ who have ruined their lives and the future of their children.

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    Dollars and conscience (10)

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