3 August, 2021

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Challenge Before The New Finance Minister: Choice Between Pragmatism & Dogmatic Ideals

By W.A Wijewardena –

Dr. W.A Wijewardena

The new Finance Minister Basil Rajapaksa, known in political circles by his first name Basil, is reported to have made an especially important confession on assuming duties last week.

He is said to have pronounced: “Our priority is to serve the people. We have identified all the key priorities and requirements of the general public. However, at times we will have to take certain unpopular decisions, just like how a father would for the betterment of his children and family. But these out-of-favour decisions are taken with so much honesty and consideration for the betterment of the entire nation. Therefore, I urge you all to support our efforts in these trying times”

The habit of all the previous finance ministers has been to mollycoddle the people with sugar-coated words when they assumed that important job. By the time they assumed office, the respective economies have been in the depth of the depths, but finance ministers had promised sun and moon to people. But within days, all of them had to swallow their bold utterances and were compelled to pass economic burdens on to people when they encountered the empty Treasuries they had inherited.

Basil has deviated from this practice and been frank about the nature of economic reforms he was planning to introduce. That is a good sign, and it is good for Sri Lanka’s long-term economic growth.

Deep economic crisis

Sri Lanka’s economy is in a deep crisis today. Besieged from all economic fronts – external, fiscal, monetary, growth, and employment – it should, perforce, introduce some painful and sacrificing economic reforms if it is to be rescued from the current malaise. In this context, hiding the facts from the people is not the proper method of communicating with them. In all sincerity, truth must be told to people.It reminds me of how Sirimavo Bandaranaike, the then Prime Minister, came on the Sri Lanka Broadcasting Corporation in 1973 and warned the people that the country was sitting on a volcano, and it could erupt at any time. This was a time when the country had faced a severe food crisis, foreign exchange crisis, fiscal crisis, and a political crisis. It forewarned people that some painful measures were to be introduced by the Government to take the economy out of the crisis. Of course, her modus operandi for rescuing the economy was not the best for the country. But she was truthful and did not want to hide anything from the people.

Failure to keep people informed of the gravity of the crisis
The problem with the Gotabaya Rajapaksa administration from day one of assuming office was that it had hidden the true facts from the people. Its top leaders had been pronouncing ad infinitum that they possessed a magic wand to deliver prosperity to people whereas the reality was completely different. Hence, when unpopular policies like the fuel price increase were introduced, there were country-wide protest campaigns against them by affected people. Basil has, therefore, started his job with a clear warning to people; he had said that the country was going through the most difficult period in its history, and solicited everyone’s cooperation to come out of it. What it means is that they should not expect free handouts from the Government.
No free lunches in the path to prosperity
The path to prosperity is painful, rugged, and difficult to tread. Taking an easy line, the Gotabaya Rajapaksa administration had sought in the past 18 months to deliver prosperity by getting the Central Bank and commercial banks to finance its activities. From January 2020 to May 2021, it had borrowed from the banking system some staggering Rs. 2.6 trillion, a record by any standard. This is a practice that should not be continued. That is because prosperity comes, as Singapore’s first Finance Minister Goh Keng Swee once said, not from the central bank printed money but through the hard work of people.He had further said that if people wanted better government services, they should be prepared to pay for them. They should realise, he had emphasised, that there was no ‘free-lunch’ as such. All lunches, though they appear to be free, had to be paid for by people either through high taxes or through inflation. Both are inequitable and more painful than the hard work because they unfairly fall on low-income people. An empty Treasury What is the type of the Treasury which Basil has inherited? It is empty to the core. That was partly due to a folly of the Gotabaya Rajapaksa administration when it assumed office in November 2019. It offered an incredibly attractive tax concession package to value-added tax or VAT payers and income taxpayers. It cost the Treasury some staggering Rs. 519 billion by way of lost tax revenue in 2020 compared to the level that had been attained in 2019. Given the dull economic performance, the year 2021 too is expected to deliver similar results. Disregarding the warnings against tax concessionsWhen this was announced in late 2019, I warned the Gotabaya Rajapaksa administration to abandon it since it was going to cost his Government dearly in an article in this series. The rationale of the tax cuts, according to the Government spokespersons, was to lower tax rates and rope in more taxpayers to the tax net. Hence, in the long run, it was argued, that the tax revenue will increase compensating for the losses it may have experienced immediately.But I warned the Gotabaya Rajapaksa administration as follows: “This logic is indeed in line with what is known as the Laffer Curve, named after the American economist Arthur Laffer. According to Laffer, there is an optimal income tax rate up to which the revenue will increase and if the rate shoots over that optimal rate, revenue will begin to fall. Hence, when a country is in the revenue falling region, the reduction of the income tax rate would certainly increase revenue instead of reducing it.

“Empirical studies have shown that this optimal income tax rate stands at around 70% for most of the countries. Sri Lanka’s marginal income tax rate is just 24% and therefore, it has not yet reached the level of taxation that prompts an increase in revenue if the rate is cut. Hence, it is not the Laffer Curve which may have prompted Sri Lankan authorities to cut tax rates but some other consideration. That is to provide an additional income to the hands of the taxpayers, catch more liable people into the tax net and increase the tax revenue by getting more people to pay taxes.

“This last goal had been expressly mentioned in the election manifesto. According to press reports, the tax cut is intended to address both the individual taxpayers and the corporate taxpayers.”

Continuation of the costly tax concessions

In the context of the deadly external shock delivered to the economy by the COVID-19 pandemic, I suggested in a subsequent article in this series that the costly tax reforms should be postponed till the economy would return to normalcy again. In this article, I argued, “These types of tax reforms should be tried under normal situations. The present COVID-19 environment is not the ideal situation to do so. It has handicapped the Government by restricting its freedom to respond to the rising demands made of it by affected individuals and businesses. If the revenue does not flow into the Consolidated Fund, there is no way for the Minister of Finance to withdraw funds from it by issuing a warrant under the Constitution.

“Even after the expected approval of a formal budget by the new Parliament, the Government will continue to suffer from this handicap due to its low revenue base. It will not be able to meet its financial obligations unless it borrows heavily from the local and foreign markets. Both would worsen the country’s debt situation pushing it further down to an inescapable debt trap. This has to be avoided at all costs. Given these circumstances, it will be prudent for the Government to postpone its generous tax reforms until the country returns to normalcy.”

Money printing to finance Government expenditure programs

When the revenue was falling, the Gotabaya Rajapaksa administration had resorted to borrowing from the banking sector to finance its increased expenditure programs. This was in accord with the adherence to a policy prescription propounded by a breakaway group of economists from the mainstream economists called ‘Modern Monetary Theorists’. This was an ideological dogma to which the top policymakers in the administration had subscribed without regard for its applicability to a country like Sri Lanka which does not issue a reserve currency like USA or EU.

It was equivalent to imposing an inflation tax on the people to have their resources transferred to the Government in the absence of a viable revenue mobilising scheme. But it would backfire by creating inflation, on the one hand, and putting pressure for the exchange rate to depreciate, on the other.

In an article in this series, I warned the Government of this as follows: “Governments’ use of inflation as a tax to force-mobilise resources for funding Government projects, has been equated to the fate of the villager who sought to get a demon to work for him. In the short run, a government could forget about all its fiscal problems and enjoy the temporary solace provided by it.

“But in the long run, when inflation becomes uncontrollable, it will have to sacrifice all its temporary gains. When an initially mild inflation degenerates into an uncontrollable hyper-inflation later, it has been termed as a mass killer. It would destroy the financial infrastructure and, through it, the entire social and economic infrastructure. Rebuilding a nation after this massive destruction would be a very painful and tedious challenge for everyone.”

Seeking to resolve the issue through palliatives 

Now Basil as the Minister of Finance should face the bitter truth. Sri Lanka’s foreign reserves have declined to a critically low level and is on a continuous declining path. Consequently, the rupee is under continuous pressure for depreciation. The Central Bank has fooled itself by announcing an exchange rate at Rs. 102 to US dollar which it claims the interbank Telegraphic transfer or TT rate. But no dollars are available in the market at this rate and in the curb market, the rate has fallen to Rs. 236 per US dollar marking an unwarranted margin of some 17%.

Sri Lanka’s Central Bank Governor had tried to build confidence in the country’s investors by announcing a series of palliatives to overcome the immediate foreign exchange crisis. They included some SWAP arrangements with China, India, and Bangladesh and a free Special Drawing Rights or SDR allocation of $ 800 million from the International Monetary Fund or IMF. But this announcement could not assure the investors who have now been driven to a panic mode.

The yield rate of the International Sovereign Bond or ISB maturing in two weeks’ time on 27 July has jumped to 48% when its coupon rate amounted to 6.25%. This yield rate signifies a market price of $ 98 per 100-dollar bond. Usually, when a bond reaches its maturity, its market price begins to converge with the face value. But in this case, the market has not responded positively to the assurances given by the Central Bank. With these high yield rates, Sri Lanka is now unable to secure funds from the international sovereign bond markets. It cannot secure funds even by issuing its Sri Lanka Development Bonds or SLDBs in the local markets despite the high interest rates paid.

Encouraging private businesses to borrow abroad and gamble on the Government securities market

The Central Bank has made another folly last week to arrest this situation. It has permitted the private businesses to borrow abroad, use up to 50% for investment in ISBs in the secondary market, and use the balance to buy SLDBs for which there is no market appetite from their conventional investors. The Bank in its wisdom has tried to solve the problems of the Government. But it has created a bigger problem elsewhere by increasing the country’s foreign indebtedness, this time by the private sector.

It is also not in line with prudential economic management because instead of borrowing abroad for investing in real economic activities, it has encouraged private businesses to borrow and gamble on the government securities market. Furthermore, it also does not stand to logical reasoning for private businesses to borrow abroad and invest in securities which have been downgraded to CCC level by all the rating agencies. Thus, if the Government, for some reason, defaults or fails to recycle its foreign debt securities, these companies, and consequently, the national economy, are exposed to high risks.

No choice but to seek IMF support

As I have argued in the article in this series last week (available at: https://www.ft.lk/opinion/Forex-crisis-plea-for-calmness-in-national-interest-and-need-for-getting-IMF-driven-bailout/14-719992), the only viable option available for Sri Lanka is to secure a funding line from IMF. But the top policy leaders of the Government have been making the bold statement that the Government will not seek IMF support to come out of the crisis facing the country today. This is adherence to the dogmatic ideal of being anti-IMF, anti-economic reforms, and anti-trade.

Basil has no luxury to entertain these ideals. He should be pragmatic, and that pragmatism requires him to seek support from IMF, go into economic reforms, abandon the anti-trade policy, and trust markets. These are unpopular measures but needed to be introduced if the country is to move back to its long-term economic growth path.

We hope that he will not hesitate to choose pragmatism in preference to dogmatic idealism which some of the top policymakers of the Government have been faithfully coaxing him to adopt.

*The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at waw1949@gmail.com.

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Latest comments

  • 20
    3

    Will that not be similar to an act of novice nurse for a servere heart surgery ?
    .
    Elephant is in the room regarding the knowledge and background of the newly elected minister of Finance. All is public secret, neverthelss people to expect him to make wonders/miracles – is not similar to waiting to see ” pigs might fly” situation ?

    The kind of redhehrrings are common to the incumbent govt. We know how their hard efforts dowplaying the danger before COVID, by leaving space easy prey to get caught by myths remember ? If MEDIA-POLITIICIANS combination would have been CLEVER, would that ever be the case ?
    .
    Media mafia GOVERNIBNBG today is even more dangerous than the real danger created by COVID viruses.
    .
    https://www.youtube.com/watch?v=qYoQ-lT923w

    We know how MEDIA played the lead role in terms spreading RACISM /prior to GOTA AKA ANDARE of the day’s election.
    Today, no Dr Safi or his so called ” infertility making theories”:… those bitch s sons that took the lead (Madhu madhawa or the like- so called ARTISTS) are today totally caught by silent mode.

    • 1
      3

      Sri Lanka’s Energy Security is seriously threatened as the power plants are to be sold to US company Fortress as soon as US citizen Basil comes back. Muthurajawela is being cleared and the Japanese US military proxy in Asia are building their own terminal at BIA Airport under Covid-19 lockdowns.
      The Sinhala diaspora has been weaponized. US citizen Basil makes policy to benefit USA which wants a military base in Lanka. This is why Fortress wants Sri Lanka’s Electricity and LNG power plants.
      Take over of Lanka’s Energy Sector, Transport and Lands was the MCC project all along as the US wants to set up military bases on the East and West Coasts of Sri Lanka to Data Tap on undersea Data Cables and for cyber security
      This brain dead doddering Washington consensus economist, Dr. WIje, who sings for the IMF and WB should get a brain transplant!
      The US staged the Covid-19 data hoax and printed Trillions of dollars as “Covid-19 bailouts’ chanelled through Black Rock and other hedge funds in order to asset strip and reboot US EU colonialism in Asia, Africa and Latin America and crash tbe emerging BRICS economies
      Sri Lanka should be charging Submarine Data cable companies for use of Lanka’s Maritime exclusive economic zone.

      • 1
        0

        Dinuk,
        “Sri Lanka should be charging Submarine Data cable companies for use of Lanka’s Maritime exclusive economic zone”
        Yes! Yes! That will shut down the Internet and prevent nutty medical anthropologist types posting on CT.

  • 18
    2

    What is successful today ?

    1) Distribution of COVID jabs to the nation – no not at all…. they show off, but as an island nation we could long be free from COVID, if LEADERSHIP was clever… how can we expect that knowing GOTABAYA is one of the most uneducated leaders in the world…. he could give a face to few projects.. as a millatory man, but he does not have the strength to govern a nation…. he should resign and go back to his place – EITHER to US or to Jail.
    2) Law and order – POLICE – no not at all – almost like that the fearful situation prior to 2015
    3) Cultural and religious affairs – no – even so called leading monks BEHAVE like deaf and blind… with Mahanayakas continue their SLOTH like behaviour
    4) Judiciary – is highly biased – has become like that of RAJAPAKSHES judiciary
    5) No justice is given to those protest … as allowed in any democracies…… millatory govt ‘s actions damage all the high values that the old readers won by their diehard actions
    6) Ratawiruwas are called ” living bombs”. …. see how pathetic
    7) Rajapkashes real faces are revealing to the public day by day.. they are mlechcha by every means…. they cant mislead the nation to the manner they expect it to happen.. lies would not help them further.
    Mahinda Rajakshes will be hated to the VERY SAME manner, Gadafi faced it sooner than later. The days, where almost everything in that dynasty be found in DRAINS is nearing.

    • 12
      1

      “Dogmatic Ideals”

      Rajapakses having ideals?

      Can you name one?

      EE where are you when we need you most?

      C’mon buddy, take the stage and let us have all the Rajapakses’ ideals!


      How to get rich quick? ……….. That’s a great ideal as any! ……… dunno if that’s dogmatic, though ……….

  • 16
    1

    In these matters the Central Bank needs to advise the Minister and Secretary Finance on the full implications as he has a depth of well informed officers under him. They have ample statistics of the total local economy. But when you get a Political Catcher (from Academia) without real practical exposure to economics, correct advice is not given. Disaster follows.
    The Author having had a long career in the CB, knows this well.

  • 17
    1

    In July last year, I punched two extra holes in my belt. Now it looks like I will have to punch two more holes in the belt!

    • 4
      0

      Hope not because of increased girth due not enough exercise during these “restricted movement” times.
      Direction matters !!

    • 5
      0

      Captain Morgan lucky man, you have a belt to tighten.

      • 0
        0

        Paul
        You may have come across this.
        Late in WWII, Italy was in economic trouble and Mussolini reportedly asked Hitler for assistance to which the latter replied “You have to tighten your belt”.
        To which the former responded: “Can we then have the belts?”
        *
        We have yet to get there, but looks like we will.

  • 11
    1

    Dr. W.A Wijewardena,

    You are qualified in your field by education, professional training and experience.

    A list of finance ministers and their qualifications of number of countries in the region has been published in the Social Media, which states Petrol Station assistant and brother of President.

    Now, I am not a person who only believes in the conventional (formal education etc.) way of obtaining and building up expertise in particular field, though conventiona way is unavoidab

    • 12
      1

      Accidentally posted without completing comment.

      Though, conventional way of building up expertise is unavoidable in several fields.

      In the list, Basil R’s qualification as GCE (O/L), petrol station assistant and brother of the president.

      I do not disregard Basil R’s education or experience either.

      However, this is completely unsuitable to grasp the issues involved at the level of intricacies involved (i.e. global financial institutions, state of economy and finance etc.).

      Others in the list stand as behemoths in terms of qualification, experience and expertise, and Basil R does not even have imaginary chance of having general discussion with them.

      Only plausible reason and explanation for Basil R’s forced entry in the post of finance minister is to buy political agreement within and without the government for already made decisions, in addition to facilitate some other motive.

  • 11
    1

    Strange that the author has written this piece as if the country just elected a new government and the cabinet is just being appointed!… and Basil has been appointed as the Finance Minister in this cabinet.

    In reality, Basil has been a mover and a shaker of the double-Paksa government all along and has had his hands in the government’s economic policies so far. He may have sung a new song on his appointment as the new Finance Minister but he has been part of the dance of this government including the unprecedented Rs. 2.6 trillion printed From January 2020 to May 2021 which the government had borrowed from the banking system.

    Should we expect new tricks from this government just because Basil has replaced Mahinda!? Or listen the expert advice of the author!

  • 21
    0

    All these scoundrels who took 10 percent to amass their wealth, should now “sacrifice” for the motherland, and give back what they stole to save this country. We are on the trajectory to be yet another Zimbabwe. Nandasena Mugabe and his unqualified thugs are taking us there. Hope those who voted for them are enjoying the ride.

    • 12
      3

      Mugabe for your information was ‘highly qualified’ with several university degrees.
      Why this lankan obsession with ‘qualifications’ when the island has had so many useless leaders who had college degrees?
      I am no fan of the rajapaksa family, but it amazes how many daft people i see blaming their bad leadership on their ‘lack of education’.
      A rotten heart and a wicked mind cannot be cured by going to school and getting all kinds of certificates and fancy letters in front of your name. If anything all it does is teach a criminal to be more ‘refined’ and ‘sophisticated’ in his criminal ways.

      • 3
        0

        I did not refer to Mugabe in terms of qualifications, but to the corruption, incompetence, strong man tactics, and total failure. Just like Robert Mugabe, Nanda has surrounded himself with unqualified, and inexperienced rotters. Who would want to appoint a suspected war criminal/military man to deal with a deadly pandemic? We have plenty of qualified and experienced health care experts who could spear head this effort. You may disregard qualifications, but it is vital every country has qualified and experienced leaders WITH the ability to lead and implement sensible policies. Take a look at the Finance Ministers in many Asian nations and you will see leaders qualified in finance and economics, so how qualified is Basil, apart at being an expert in taking 10 percent? First and foremost every leader MUST put the best interest of country and people OVER party, power, and the wealth of the family.

        • 1
          0

          Qualifications mean nothing in Sri Lanka. We have a Professor as one of the health ministers. But this guy also believes in advice given by gods while he is sleeping.

  • 2
    0

    According to media, there is a severe foreign exchange shortage in Sri Lanka.

    The Department of Pensions website says for 2021 June, 9,823 Pensioners living in Foreign Countries were paid 269 Million Rupees as pension.

    The monthly pension of these Pensioners is deposited in the special individual pension savings accounts in one of the Four specified bank branches (Of the Pensioner’s choice), under strict conditions such as no ATM Card facilities, no joint accounts, can’t transfer funds to any other bank accounts within Sri Lanka (Even Pensioner’s own accounts) etc: The Pensioner can withdraw funds from his bank when he visit Sri Lanka. Otherwise the Pensioners are encouraged to get funds transferred from their account to banks in their countries of residence. Though some pensioners want their pension money in foreign countries, many want to use their pension money in Sri Lanka to meet their commitments in Sri Lanka. they are denied this facility.

    With the present health conditions throughout all countries and the pensioners’ inability to travel to Sri Lanka and withdraw funds from their banks, they are compelled to apply for transfer of funds overseas and Sri Lanka will loose about Three Trillion rupees worth of foreign exchange per year.

    • 2
      0

      Dear Vela:

      That’s an astounding amount of money that can leave the country even if actually only half of that amount is remitted to foreign accounts annually.

      We must wonder why the government doesn’t want to let the pensioners transfer that money to whomever they wish to transfer within SriLanka!

      Who’s the beneficiary of the account balance when a pensioner expires? The bank or the government?

  • 6
    1

    If the government starts by importing new vehicles for MPs and others, it will show that Basil is here to grab more for himself and his extended family.
    Soon, some massive expensive ‘white elephant’ may enter the room – called Sri Lanka. Then we will know. It may enter through the ‘china town’.
    We have to wait and see, but there is hardly anytime left.

  • 6
    4

    What does this school chase out know about Finance, Doesn’t this fool destroyed the country’s economy in Chitanta time, as the Minister of Economy? Just a worst case among the Modaya Family gang!

    The war criminal Rapist Army Defense Secretary claimed Lankawe is the no 2 in controlling the Covid 19. But the WHO has sleeted Lankawe as one in the five countries desperately need help to fight Covid-19. When Lankawe and China decided to Promote Lankawe at the 2 best in fighting Covid-19, the whole Colombo Media cackled with that fake news. Now, none of them wants to tell the truth to the Sinhala Modayas.

    • 2
      1

      Mallaiyuran,
      Is someone telling the truth to Demala Modayas?
      —-
      Now, none of them wants to tell the truth to the Sinhala Modayas.

    • 2
      3

      Mallaiyuran,
      Economy of this country was destroyed by Tamil terrorists, Muslim Terrorists and the Royal Gang of ‘Yahapalana’ Government. From 2009 to 2015, economy showed signs of recovering after long drawn Tamil terrorism. In 2015, the economy was growing around 7% but ‘Jadapalana’ dong keys brought it down to 2.3% by 2019.
      —-
      “Doesn’t this fool destroyed the country’s economy in Chitanta time,”

      • 1
        1

        Eagle,

        Do you mean the first civilization on the earth was destroyed by Yahapalanaya within the previous 5 years or is that for all 125,000 you earned and saved only your lies & explanations? Is that all your 125,000 years of history in Lankawe? A good explanation for why Sinhala Buddhism should leave alone the Tamils.
        “Tamil terrorism”? Read the news media to come to know how Sinhala Buddhism is living on this earth. Last week alone:35 men- priests, chiefs of local councils, medical experts, & other the noblest category continuously raped a small girl; mother auctioned a 20 year old cancer patient daughter to business men; the entire family got together and beat a son in law until he died; for exposing the lords in social media, they kidnapped and crucified those writers. This is not the work of Rapist Army, but the Sinhala Mahajans, themselves who are in search of Hitlers. Why the rest of the Modayas lament about White Van kidnapping and dumping the body in the ocean while they are doing all these for themselves. Remember, this is why Thirunavukkarasa Nayanar wiped Buddhism out of India.

        • 0
          0

          to stop italics

  • 2
    0

    Continued
    Are the Department of Pensions, the relevant Four Bank Branches, Central Bank which approves transfer of funds to Foreign Banks in each individual case of transfer, the Finance Ministry and the other related Officials and Politicians not concerned about the flow of valuable foreign exchange out of Sri Lanka?
    Sri Lankan Pensioner resient in Canada

  • 4
    0

    GR sacrificed his, presumably, good life style in the US to save SL from terrorism, & now his brother, the PM & former President, has invited his other brother to do the same, this time to save SL from economic disaster.

    Since the days of internationally respected Ronnie de Mel, we had several PMs & Presidents, as well as, the ‘best’ Finance Minister in the SE region, in charge of the country’s finances but for MR to bestow that honour on an apparent school dropout with no qualifications or business track record, he certainly must be having a lot of faith in his brother or maybe its the final nail in the coffin for SL. I am sure Basil will be ably supported & advised by former CB Governor, Cabral. With a track record of losses from hedging deals, toxic bonds & general mismanagement of public funds under Cabral, together, with Basil’s street smart 10% business acumen, are we expected to continue supporting & having faith in this lot?

  • 3
    1

    A Former distinguished Central Banker [The Essayist ] is hoping that the new Finance Minister will choose Pragmatism[ Not Capitalism, Socialism and other isms ] in preference to Dogmatic Idealism.

    Was [or is ] Gota a dogmatic Idealist? After all, he stuck to his guns on the organic fertiliser issue.
    Basil was of course was born Pragmatic. He knows the importance of money as opposed to that idealist school boy debating topic Money is the root of all evil!

    Therefore, he would ideally siphon off the stuff for a Rainy day, which he would consider as a SAVING! Pragmatism indeed. Idealism is for the Birds and the Bees.

  • 6
    0

    Dr WAW, we respect your knowledge and input into this now inedible broth of Lanka’s finances, but I’d bet my bottom rupee that the Brothers Four and Family Unlimited will give it no heed.

    These rascals know only one rule, “let us milk the country, its poor populace, and get rich quick”

    What a sham country, a sham parliament and an ignorant population we have, to show, for all our vaunted “literacy and intelligence” – we should all be collectively ashamed of ourselves at having repeatedly elected such scumbags to “rule” us.

    • 5
      0

      I’m concerned about the economy, but I also don’t know much about such subjects. I consider Dr Wijewardena a sane and rational guide in that area
      .
      Something positive that I can report is that I was given the second dose of my COVID vaccine, in Bandarawela yesterday. No after-effects. I thanked all those who were doing their jobs as best they could at the MOH Office, but within their hearing, I said that I knew that Sinopharm was the least effective of the COVID vaccines,and cursed the Rajapaksas for what they’re inflicting on us.
      .
      Panini Edirisinhe

      • 1
        0

        My dear SM,
        .
        you dont need to know about the subject, but some updates about the statistics would be more than enough to undrestand the situation. Not many of us would go that deep to realize it either.

        I have a number of question to Dr W, but he would not come back to us with his reponses. At the time, MR- Ajith Cabral was ruining the CB, Dr W was in that executive board. He should be able to reveal lot more about the doctored numbers by MR-AC duing that period. Sorysena himself revealed that BOND-SCAM was inevitable from 2008, however it became clear during the GOOD governance rule.
        :
        The reason why Mahinda et al to boast on their so called growth rates were toally connected with the collossal amounts of the loans flew into the country for road and construction projects. It is no right economists or the like analysts to name it as a part of economic growth. Real economic growth were seenin the govt of JRJ after their politics created new jobs in apparel industry and several other fields.

        If anyone would counter argue, then he or she should bring with the statistics based on the generatons of new jobs by 2005-2015 govt.

  • 5
    0

    The biggest business that should be taxed and released is the Rajapaksa Oligarch Venture that is in tax-havens around the world.

    All the while Motherland strives to uphold this Oligarchy in tax-free religious fashion, and gets economists to play around with citizens money with Laffer curves and VAT of the poor man, whilst delusionally thinking that Rajapaksa Oligarchy is the only thing that can uphold Sinhala rights.

    Wrong thinking! That’s too simplistic an equation. Take the more complicated one: Release the pent up Rajapaksa US$$ billions to the Masses so 70% of the people can contribute in taxes.

    Basil, who has actually forgotten the US billions potential in Panama, needs to be reminded, and forced to act on it, by way of Coup. Or they can voluntarily do it. Sinhala rights will be much healthier that way.

  • 5
    0

    Basil Rajapaksa has opened his innings with the introduction of SGST for liquor, Cigarettes and gambling. This is unlikely to improve the balance of payments. The drop in exports of tea and the increase in food imports as a result of unplanned change to organic agriculture will make result in increased pressure on balance of payments. So far he has not made any indication that he intends to seek IMF loan.

    The impact on the budget in not increasing gas prices will result in a huge budget deficit. Best Wishes to Basil in his efforts to manage the economy under highly challenging conditions.

  • 3
    0

    Wondering What has happened to this country time after time,is it curse or what?
    What a track record of Saviors as prez,finance……….this is what our PM visits Tripathy…….even he has given up now ,he knows only divine power may ……

  • 2
    0

    No politician can improve the Sri Lnkan Economy unless he meetsthe folowing conditions
    1. Sjoud know that people need
    2, Stop interfrence from countries
    3. Should hve experience in Finnacial magemnet
    4. Dhoulf be honest and corruption FREE
    5. Should not have ethnic bais
    .6.

  • 0
    0

    My View,

    There will be space to punch four extra holes only towards the inner end of the belt!

    • 0
      0

      Dear Capt.
      But you mentioned,,,”punched two extra holes in my belt”……
      Sure there must be enough for two on the outer end.

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    The Central Bank has made another folly last week to arrest this situation. It has permitted the private businesses to borrow abroad, use up to 50% for investment in ISBs in the secondary market, and use the balance to buy SLDBs for which there is no market appetite from their conventional investors. The Bank in its wisdom has tried to solve the problems of the Government. But it has created a bigger problem elsewhere by increasing the country’s foreign indebtedness, this time by the private sector.
    This is a game to sell more assets to China through another Chanel which people will have no accesses on the name of “Private”. If any private foreign funds is waiting to flow in as investment, it would have happened in Yahapalanaya time, which the West wrongly thought as capital oriented government, that time.

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    There was a press meeting in 2019, about the Yahapalanaya’s Mangala’s management of foreign exchange. Mangala’s notorious Foreign Exchange Fraud Amnesty Act like infamous acts had made EU and FATA put Lankawe within the 19 worst money laundering heavens in the world. The Lankawe exchange rate has been rolling down on the hill’s slope. Unfortunately, Dr. WAW did not condemn Ranil or Mangala on that but was concerned about Lankawe’s new certification. Old King Modaya and King Modaya were on the table and CBG Cabal was sitting behind them. A reporter asked a soft question if the exchange rate was reflecting the real value of the rupee. It sounded like he built there an answer that they could deliver, that “It was the West who was sabotaging the exchange rate”. Old King Modaya, who was supposed to moderate the meeting for the benefit of King Modaya did not take that offer. They attempted to answer the question of how the magic the Royals waiting to show would happen. Let’s put it for later, because that is all too normal in Lankawe political meetings; cheating the Modaya listeners with lies.

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    The interesting point here is why the meeting took place in that format, where King was standing for election, but Old King was dominating the campaign meeting. During Tamils freedom war. Sonia’s medias like Madras Hindu, BBC which had to eventually clean up its Lankawe Branch and other world media were pushing the Old King to Papaya Tree as he is the best diplomat in the world and had won an organization that many thought cannot be won. He spent some money to become the man of the year in Times. Hindu Editor received the highest honor in Lankawe for spreading this fake opinion in the world. But the man was accused of killing his girlfriend and finishing off the hit men. The other accusal is he appeared for poor rural village rebel girls for sex. He is no different from the 2nd “Father of the Nation Duminda Silva”, he too went to prison for the same reason Gandhi and Mandela went to prison. Because of the fake opinion created by the media who work for the commission, Old Modaya went to do that Charity of leading his Brother Modaya’s campaign meeting. Here is how they answered in the meeting for that question, as described by Chandrika:” He looked left, he looked right, he looked back, but he didn’t answer that question, because he didn’t know the answer”.

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    But Cabal, who was in the back, shouted “give us a chance, we will do it and show you”. Give a Kandos to Chandrika’s mouth, now the Old King Modaya is hired to give a chance and fired for failing as FM, by his own brother .
    CBG Cabal, a contemporary at the Bank with Dr.WAW, who praised him as the War Hero, who won the war by financing for the weapons with LCs. After pumping $400 B in commissions and weapons, CB has no money for the food & medicine importers to open LCs. The man who won the war with heinous crimes but faked as his rapist, murderer soldiers’ armies were walking with UN Charter in one hand and gun on the other to do a Humanitarians rescue mission operation. After this disastrous failure of his words as FM, at Temple Tree House, if an iota of intelligence left in the head of this man, it will tell him how much of that can get him if he stands in the Hague’s ICC. Now he is left with the shepherd job for the 225 water buffalos, whose only job is grazing and dedicate the dung in Diyawanna Lake’s JR’s Palace.

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    W, A, Wijewardene is at his best as usual. But he fails to mention the fact that economic prosperity depends on political stability. The country suffers from political instability since its independence in 1948. Most of those who governed the country were semi-illiterates. DS Senanayake did not go beyond the 10th standard. So was Mrs Srimavo Bandaranaike and Ranasinghe Premadasa. The Gotabayas never studied at a university.

    All those in charge of governance had no long term vision unlike Lee Kuan Yew the first Singapore Prime Minister and a towering figure of Asian politics.

    The Cambridge educated lawyer turned his fishing village with no natural resources, a mini-super power, an Asian Tiger and an economic miracle.

    He spelt out his vision quite clearly and forcefully. “We will not as a majority squeeze the minority… We made quite sure whatever your race, language or religion, you are an equal citizen and we’ll drum that into the people.”

    In contrast, this is what JR Jayawardena said during the 1983 riots.

    “I am not worried about the opinion of the Jaffna people… now we cannot think of them, not about their lives or their opinion… the more you put pressure in the north, the happier the Sinhala people will be here… Really if I starve the Tamils out, the Sinhala people will be happy.”
    – President J.R.Jayawardene, Daily Telegraph, July 1983.

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    Is it then any surprise that the country has become bankrupt and is beyond redemption?

    “It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God”, but foreign pensioners cannot get anything done both at the Foreign Pension Department and the Bank of Ceylon.

    These two institutions have placed roadblocks making life extremely hard for the FP. In June 2018 the FPD discontinued payment of pensions in foreign currency through High Commissions/Consular General and compelled FPP to open Savings Accounts with local banks. Many FPP thought the government move was to save foreign exchange. It is not so. The banks do not permit withdrawal of funds in rupees, No third party transfers. Ironically, it is allowing the transfer of the funds to their overseas Savings Account. But the process is tedious.

    One has to fill no less than four forms. You cannot email them, they should be sent by post. Then begins the agony. The BOC staff start picking holes. First, they deny they received the documents even after one month of posting under registered cover. Then they claimed one form is missing. When perfected and sent they said the document is not clear. When you send a fresh form, BOC staff claim they are not according to the bank’s format.

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    The writer has completely neglected to discuss the credibility of the new finance minister’s words to the public. Instead, the writer seems to give credit to the words spoken, giving the impression that the new minister was sincere in his warning that belts needed tightening and austerity measures required, with the full co-operation of the public. Does he honestly believe that this man is in the new job in the best interests of ordinary Sri Lankans? Has he ever proven or demonstrated that his interest is in public welfare or development of the country’s economy? What credentials does the writer use, to give credibility to the words, warnings and indeed economic criteria discussed by this man?

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    Further to Thanga’s comment, Sri Lankan Pensioners living in Canada are burdened by the Bank of Ceylon, Metropolitan Branch insisting that life certificate certified by a medical practitioner (Cost 50 Canadian Dollars) or Foreign Mission Official (Cost 45 Canadian Dollars) should be attached to the application for transfer of funds and should be posted from Canada (Registered post cost 24 Canadian dollars. Further, the bank charges about 5,000 Sri Lankan Rupees as their fees. So, it would cost the pensioner about 18,000 Sri Lankan Rupees for one transfer of funds.

    Sri Lankan Pensioner living in Canada

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