18 August, 2022

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Falling Forex Reserves & Policy Errors: When Will Our Policy Leaders Come To Their Senses?

By W A Wijewardena –

Dr. W.A Wijewardena

Falling forex reserves

Sri Lanka’s foreign exchange reserves are falling dramatically month after month. According to the data released by the Central Bank last week, foreign exchange reserves have declined from $ 2.3 billion at end-October to $ 1.6 billion at end-November.

When one deducts the gold reserve and the position with the IMF, the immediately available liquid reserves are marked at low $ 1.1 billion, just sufficient for paying for a little more than two weeks of future imports. Along with this, the Central Bank’s net foreign asset position has been estimated to have risen to an all-time high negative position of $ 1.9 billion, up from $ 1.3 billion a month ago. This is an extremely critical situation about which the independent writers had repeatedly warned the Central Bank’s management. But the response had been a mood of complacence driven by a feel-good sense reinforced by the expectation of a rescue package from friendly countries.

As the declining data have shown, these expectations have so far not materialised. Apart from the high import bill, the country should meet foreign debt obligations amounting to about $ 7.3 billion in the next 12-month period. The available reserves are only a fraction of this total commitment. Unless Sri Lanka could attract a new mega size inflow in December, the situation will deteriorate to a level beyond redemption. That includes a possible default of the country’s loan repayments for the first time since independence.

Six-Month Road Map is claimed to be a dynamic one

Prognosticating this oncoming catastrophe, several leading independent economists had repeatedly requested the country’s economic policy leaders that Sri Lanka should seek a bailout package from the International Monetary Fund or IMF. Dismissing this request blankly, the top policy leaders of the Gotabaya Rajapaksa administration claimed that ‘IMF was not the option’ and they have a more effective ‘homegrown solution’. This homegrown solution was presented by Central Bank Chief, Ajith Nivard Cabraal, in a Six-Month Road Map on 1 October 2021.

He assured the markets that the Central Bank has the necessary expertise to design a solution to the country’s grave foreign exchange crisis sans IMF and that solution is already in use. The main component of the solution was to attract new foreign exchange flows to the country immediately. The total gross inflows expected during October-December 2021 amounted to a staggering $ 10.85 billion. When these gross inflows are netted against the expected imports of $ 5 billion and other forex payments of $ 1 billion, the net inflows will amount to $ 4.9 billion. This is a comfortable net inflow that should increase the country’s gross foreign reserves to a minimum of $ 7 billion by now.

Instead, the actual reserves have fallen to $ 1.6 billion completely foiling the goals of the Six-Month Road Map. It is therefore time for the Central Bank to go into a diagnostic study as to how its goals have not been attained despite the superior inhouse expertise used in putting the homegrown solution to practice. In the concluding slide of the presentation by Governor Cabraal, this has been promised when he said, “This is a dynamic plan, we will tweak it, fine-tune it, or even change some parts, as we move on!”

Requesting for Indian support

In this background, a consolation is the recent visit to India by Finance Minister Basil Rajapaksa to negotiate for a relief package from that neighbour to the north. India as a good neighbour had come to Sri Lanka’s rescue in the past. In 2008, on the initiative of present Governor Ajith Nivard Cabraal who was the Governor at that time too, when IMF was sitting on an application for a loan facility of $ 2,600 million amidst a similar foreign exchange crisis, India’s then Finance Minister Pranab Mukherjee who later became India’s President boldly announced that if IMF did not approve of the facility, India would provide these funds to the country.

It did the trick and IMF hastily approved of the facility. India did not stop at that. It arranged a SWAP facility of $ 1,500 million in two stages through its central bank, Reserve Bank of India, for Sri Lanka’s Central Bank. This rescue package was provided by India when Sri Lanka was engaged in a ‘do-or-die’ war with LTTE and if it had not been delivered, the outcome of the war would have been different.

Press release by Sri Lanka High Commission in India

After Basil’s two-day visit to India, Sri Lanka’s High Commission in New Delhi had issued a press statement outlining the broad agreement received by the two parties. It had four elements of support to Sri Lanka. First India will provide a credit facility to enable Sri Lanka to import essential foods, medicines, and other items. Second, India will extend a further credit facility for the importation of refined oil from India, while taking action to modernise the unused oil tank farm in Trincomalee early. Third, Reserve Bank of India will extend a currency SWAP facility to the Central Bank. Fourth, Indian Foreign direct Investments or FDIs will be facilitated to flow into Sri Lanka.

The press release has further elaborated that “modalities to realise these objectives will be finalised early, within mutually agreed timeframe”. It seems that what has been agreed is only a broad framework without deciding on the numbers in the rescue package. Hence, it is too early to assess the adequacy of the package against the forex commitments which Sri Lanka faces in the next six-to-twelve-month time period.

It is Sri Lanka which is suffering from the festering wound. If it goes untreated, the development of a fatal gangrene cannot be avoided. Hence, the Central Bank is required to act in double-quick time to get India to deliver the promised rescue package in adequate amounts. Any delay in the delivery even by one week will be fatal to the ailing Sri Lanka’s economy.

Unrealistic goals of Six-Month Road Map

How have the goals of the Six-Month Road Map gone astray? Two reasons. One is that it talks about only the gross flows and not net flows. The other is the overestimation of these gross flows. In the first place the Government was expected to generate an inflow of $ 2.85 billion by way of mainly government to government loans and sale of unused assets of the Government. This has been an overestimate and only a fraction has been received during this period. The sale of unused assets had expected to generate $ 500 million, but nothing has so far been sold.

Foreigners were expected to invest anew in Government securities some $ 250 million. Instead, they have declined from $ 9 million to $ 8 million. The expected syndicated loan of $ 300 million has so far not been contracted out. Sri Lanka Development Bonds held by offshore banking units were expected to be rolled over to the extent of $ 200 million. With a grave foreign exchange shortage in the market, only a fraction could be rolled over.

The Central Bank had expected to go into new SWAPs of $ 1 billion, domestic SWAPs of $ 0.5 billion and purchase of forex from remittances and export proceeds amounting to $ 150 million. Again, on a net basis, the Central Bank has sold and not purchased foreign exchange from the market during October. As promised in the presentation by Governor Cabraal, it is time now to revisit these goals and reset them based on the ground realities.

Threat with a stick while offering carrots

Exports also have been overestimated by about $ 100 million per month thereby creating a gap of about $ 300 million during this period. What has been mostly overestimated has been the remittances by Sri Lankan migrant workers. The Road Map had expected to receive at the rate of $ 600 million per month during this period. However, the actual receipt has been only a half that goal. Then, through a draconian rule under which these remittances have been listed as services sector earnings, those workers have been asked to convert such remittances received after October into Sri Lanka rupees before the seventh day of the following month.

This is a violation of the agreement which the banks had entered with those private foreign currency account holders. That agreement was to keep them in foreign currency form so that account holders could withdraw them in foreign currency as they wished. When the remittances flow fell nearly by half during October and November compared with what the country had got in previous years, the desperate Central Bank had introduced an incentive payment of Rs. 10 per US dollar for the remittances to be received during December.

The objective has been to attract them into the formal banking sector which are presently sent via informal sources at black market prices of about Rs. 240-250 per dollar when the official central bank rate happens to be at around Rs. 199 per dollar. It is a carrot, but the bank has used a stick too to frighten the remitters and those who help them. Under this stick clause, four money changers have been taken to task by the Bank under the Foreign Exchange Act. Given the high black-market margin over the Central Bank’s controlled exchange rate of Rs. 199 per dollar, it seems that both the carrot and the stick have been too short.

No impact of conversion on improving forex flows

Despite what the Central Bank believes, the forced conversion has no impact on increasing the forex flows to the country. Instead, it has created innumerable inconveniences to those who work abroad and genuinely remit their savings to private foreign currency accounts in Sri Lanka. This seems to be due to wrong defining of service incomes as ‘any service provided abroad’ that includes working under an employer too.

Frightening the migrant workers

Let’s look at the first factor. These remittances have already been received by Sri Lanka’s banks in foreign currency and therefore included in such forex flows. For instance, when a dollar is received into such a private foreign currency account, the bank which credits it to the private foreign currency account assumes a liability but acquires a dollar as a foreign exchange asset. This asset is already in the country’s forex flows. But the conversion requires the account holder to transfer it to a rupee account at the rates fixed by the Central Bank. Thus, what happens is that a forex liability held by the commercial bank is now converted to a rupee liability. This is not only a violation of the original mandate, but also a tax on the account holders.

When the banking practices are changed in such a haphazard manner, the country’s banking sector loses its reputation. Therefore, it affects the future remittances flows. In addition, these account holders operate their private foreign currency accounts by using debit cards from abroad. They make their day-to-day payments through this mechanism. However, when the debit card does not authorise the payment due to the forex shortage with banks, these account holders face innumerable difficulties there. It is likely that they will choose to shift their accounts to countries where there are no such restrictions. On this ground also, the country will lose its future remittances.

Allow the rupee to fall to eliminate the black market

The Central Bank, instead of eliminating the black market by allowing the rupee to fall in the market, has stuck to its gun by stubbornly fixing the exchange rate at Rs. 199-Rs. 203 per dollar. Since dollars are not available in the market at these rates, the unsatisfied demand has given birth to a lucrative black market where the rates range between Rs. 240 and Rs. 250.

Therefore, the Central Bank’s incentive payment is not an incentive at all, but a tax on the remitters. It has prevented them from getting this higher rate which is prevalent in the unofficial market. In general, when an exchange rate is fixed by governments arbitrarily below its realistic rate, it serves as a tax on exporters and a subsidy paid to importers. This is what has happened to migrant workers who have been remitting money to Sri Lanka regularly.

IMF is the option, but it is too late now

The long-term viable solution for Sri Lanka to come out of the present grave forex crisis is not following this unviable homegrown solution but seeking a credit facility from IMF, of which Sri Lanka has been a member since August 1950. Given the fact that Sri Lanka has now been driven to the wall which it cannot scale, it is already too late to go to IMF today. If the Government makes its forward move today, the facility will be delivered to Sri Lanka by mid-2022. The country now has the problem of how to survive during the intervening period. In that context, a sizable rescue package from India will be a bonus for the country.

*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

  • 24
    3

    Mr W A Wijewardena,

    You have given a coherent well articulated account of the economic problems faced by the country today.

    But the bigger problems of the country are not economic but psychological – the collective Sinhala-Buddhist insecurity. This is what the genius of SWRD brilliantly tapped into. And the SLFP-side of politics have used ever since culminating with the landslide for Mahinda (All this, is due to unique unprecedented charisma/mystique/deliverance Mahinda was able to generate in the collective Sinhala-Buddhist psyche – others are insignificant bit-players just hanging on to Mahinda’s coattails.)

    Unlike you, I believe this economic crisis is solely needed. The worse, the better. Only a mother of all economic crises will cure the lotus eating mentality of the collective Sinhala-Buddhist insecurity once and for ever and force people to think rationally.

    People have the luxury to indulge in “Sinhala-Buddhist collective insecurity” stupidity only when their daily existence is comfortable ……. Ranil only prolonged the day of reckoning by kicking the can down the road twice by rescuing the economy in 2002 and 2015 …….

    • 8
      3

      continued

      If people love the country …….. wish for the mother of all economic crises (Nathan, you gotta be cruel to be kind! :)) )


      There is a precedent ……

      In the pre-Bolshevik days, Vladimir Lenin supposedly said, “the worse, the better.” What he meant is that the worse things got, under the czar or during the chaos following the czar’s toppling, the greater the chance that ordinary Russians would turn to Lenin’s brand of Marxist revolution.

      You cockamamie Marxists out there better not go holier-than-thou on me!

      • 5
        1

        nimal, please remember that guys like me have to live through this – or perhaps die as a result of it.
        .
        I won’t put forward the defence that we didn’t contribute to all this. Perhaps we didn’t fight with sufficient energy.

      • 2
        1

        Nimal,
        Fully agree with your prognosis and treatment prescription to be followed.
        The same reason, “When people were lamenting, why are the people not rising to revolt?” I have been saying the “timing is not ripe”.
        Lenin as you say.
        So be it.
        Unless, the “spoils of War” – MIG, Tsunami, ‘Hamban’ Totupura, Port city and any other remaining part of the 15% contributions are brought in to “shore up” the forex reserves.
        Who knows?
        We will know on the return from Singapura!!

    • 3
      1

      nimal fernando,
      Your prescription perhaps is the only solution out of our woes!
      I say this with all sincerity.

    • 1
      3

      The 3 tribes in SL will never change. It is a fact.

      Only solution is to given them their own nations within the island. Divide the island into 3 mono ethnic nations and relocate people based on ethnicity. All problems will be history.

      • 0
        3

        This comment was removed by a moderator because it didn’t abide by our Comment policy.

        For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2

      • 0
        1

        This comment was removed by a moderator because it didn’t abide by our Comment policy.

        For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2

    • 1
      0

      Dear Nathan & nimal,
      .
      I have little doubt about the honesty and sincerity of either of you, but I must acknowledge that my earlier comment on this page was pretty tongue in cheek. At macro level I haven’t attempted anything beyond my capacity.
      .
      However, at micro level don’t you realise that I have done more than anybody could ever have expected me to do? You are both conveniently abroad, but has either of given me your full throated support.
      .
      It’ll be easy for you to find my contact details on the Internet. If you can’t more clearly denounce those whom I have displayed to be crooks/ineffective cowards, why don’t you contact me for further details?.
      .
      As it is you resemble those whom F.H. Tawney described as “tadpoles”. Especially nimal. You can easily contact your relatives. Find out. If they attempt to put some blame on me, I shall provide even clearer information.
      .
      Many of these people are quite decent, but why are they so reluctant to speak out. I told you how unconvincing Dushantha’s response to me was. But you want to heap even more blame on me. I’m sure that nimal will respond with customary uproarious humour, but after that?

    • 0
      0

      Dear N&n,
      .
      I’m in Maharagama, where we have two good computers, but I can’t use either.
      .
      Nobody knows the password for my section of the desktop which I got bought less than four months ago with legal software and all that. The laptop given us by my sister in Sydney can’t be charged. That also has legal software. Well it may be the way I closed a door that caused a wire to snap, but end result is I’d better not use a laptop that can’t be charged.
      .
      I had composed two less grumpy comments on my phone, but both got lost before I could submit them. I want ed to tell you what a wonderful guy Dr Wijewardena’s is. I’ll now submit this, and then continue.

    • 0
      0

      N&n,
      .
      More from a grumpy Panini Edirisinhe. So you guys think that you must be cruel to me. I guess because I’m a villager and a teacher.
      .
      Do you know that the author of this article, Dr Wijewardena looked me up in Maharagama and gifted me 7 books? Why? Because I’m bold enough to denounce the crooks, while proclaiming my identity. The reality is that I’m scared stiff. Death will not allow me to cheat the guy. Inevitable, although I’m scared.
      .
      But imagine being tortured the way Thajudeen & Priyantha Kumara were, before being murdered. I don’t want that, nor do I want to be venerated by generations to come like Thomas Beckett, as I’ve already told you.
      .
      Anyway, WAW, is a wonderful guy, but he has this one weakness. He tries to see the good in everybody. So when he does speak out as he has done in this article, he must be taken seriously.
      .
      Can you guys tell me why I must suffer starvation and deprivation? “Collective responsibility,” More like punishment for staying in the land put in the land of birth.

      • 0
        0

        Typos in last sentence above, which should have been as follows:
        .
        “More like punishment for staying put in the land of my birth”.
        .
        Panini Edirisinhe, born Bandarawela, in Sri Lanka, then known as “Ceylon”.

  • 7
    0

    Sri Lankan Government Pensioners, resident in Foreign Countries are paid their monthly pension through one of the 4 specified bank branches in Colombo in their individual pension savings account. Most of them want to use their pension money in Sri Lanka, to meet their commitments there. Up to 2018, the Foreign Pensioners had the option to transfer their funds to any other bank accounts within Sri Lanka. In 2018, the Department of Pensions stopped this transfer within Sri Lanka and encouraged all pensioners to apply for and get their funds transferred to the banks in their countries of residence . The banks are also complying with Pensions Department instructions. So, many Foreign Pensioners are applying for fund transfer to the countries of their residence. Recently these fund transfers are delayed – but not denied.
    Are the Department of Pensions, the relevant banks, Central Bank, Ministry of Finance and the Government not aware of this flow of foreign exchange out of Sri Lanka? According to the statistics provided in the Department’s website for November, 2021, Foreign Pensioners were paid 230 Million Sri Lankan rupees as pension.
    Sri Lankan Government Pensioner

    • 2
      1

      Hi Vela,
      So what is your point?
      Are they not pensioners too as much as you or anyone else who served the SL government very loyally at least minimum 20 ears, if not more?? Why discriminate?

    • 1
      0

      Hi Vela,
      “Foreign Pensioners were paid 230 Million Sri Lankan rupees as pension”
      I had some time to reflect on this issue.
      Unless I have misread your article, How does SL Rupees 230 Million help to plug the hole in the economy?
      230 Million SL Rupees equivalent in today’s currency exchange to US $ 1 Million in the shortfall
      Even if this is for 1 month, then annually 12 Million US %!!
      Issue faced by SL is lack of US $ Billions?!
      Decline in reserves US $ 2.6 to 1.2 Billion in a month. Sufficient to meet import bill of SL for few weeks only!!!
      ‘Plug in the hole will not stay even a millisecond to block and benefit.
      Why impose hardships on Sri Lankans, who had served this country diligently, long before the advent of 10% culture in addition to Government Pay to ‘serve’ the citizens of SL & supplemented by wealth, ‘ill gotten’ at Tax Payers expense!
      I am sure you did not think of this great disadvantage to those pensioners in suggesting this move?

  • 14
    1

    What do I know of borrowing from IMF. Nothing. But, I do know something of not borrowing from IMF. Doom!
    .
    IMF may not be our friend; but, it is not our enemy. IMF may impose conditions, but no one lends without some kind of condition.
    .
    The condition may ask us tighten our belt. At least, it will leave us with a belly to wear the belt on!

    • 3
      2

      Nathan

      Washington Consensus as part of conditionality demands too many things, among other, reducing size of the government and corresponding budget cut. Isn’t it why 10% alluded to the size of government employees.

      Probably this is one of his many begging trips abroad. By the way Senior Minister of Singapore with some influence over the government is Tharman Shanmugaratnam. The current Finance minister of Hindia is Nirmala Sitharaman a Tamil who has agreed to give Basil a huge relief package, including grand, food, …..

      The people of Sri Lanka deserve such timely package, though they had elected the type of racist, crooked, dumb ass politicians. However does the Sinhala/Buddhists who elected a dumb ass president and a crooked cabinet deserve such a huge help from Hindia?

      • 1
        0

        Native,
        I don’t believe this is a medical trip. Remember, he has a history of heart problems. If he fails to make it, Mahinda will be in the chair, with Namal as PM. MR’s life expectancy is not too long, so NR will be President by default. Maybe that’s the master plan?

        • 5
          0

          Native I too heard some murmurs about a huge financial relief package from this end. Not sure how true it is. OC, most heart issues are currently treatable. Now they have valve replacement, pacemaker, device to correct rhythm abnormality and regulate heart rate, heart transplant, stents and many others. Unless it’s a total heart failure affecting the lungs the rest can be treated. Otherwise people succumb only because of unexpected massive heart attack or sudden blockage from a moving embolism in lung or heart. Rest can be treated.

          • 2
            0

            Chiv,
            Good medical advancement available.
            Thanks

          • 2
            0

            chiv,
            .
            I know that you have a sound and rational overview of medicine. However, you’re not a pandith who thinks he knows everything.
            .
            So while all must die, the rich and the powerful could live for much longer than we have ever thought possible.
            .
            Even they can’t be sure because you speak of sudden unexpected massive heart attacks.
            .
            Also there can always be various accidents.
            .
            Requires resources and equipment, so available only to rich humans. The life of no animal will ever be monitored so closely monitored, although Sinhalayo claim that the slaughter of cattle should be banned.
            .
            I’ve never killed a large animal, but since I eat meat I’ve got to face it. I pray on other life forms.
            .
            Panini Edirisinhe

            • 1
              0

              Sinhala Man, mine was in response to a man who left on his own will for a medical checkup, is generally expected to return. I agree life is a circle, that will complete one day. Regardless medical science too, has made great strides towards extending longevity and quality of life. Who would have thought heart transplant will be not just a possibility but a routine treatment option, in the near future. Expectations are, 25 years from now doctors may able to replace every organ other than the brain. Yet our Lankans have regressed so much so, that they could not only create but make others believe in myth such as sterilization food, sweats and procedures (Dr. Shaffi)

        • 2
          0

          old codger

          It look like grim prospect for the island.
          It appears the country would easily achieve another miles stone, a failed state. Hindia did everything possible to prevent it and did prevent the collapse of the state. Again Hindia has to or will intervene to protect this island from imploding.

          Why does not Hindia take all its people back to Lala land?

          The prospect of baby Namal becoming the next president is frightening.

      • 2
        0

        You can use ophcrack to recover your password on windows machines.

        Go to the ophcrack website and download the live CD. Make sure you download the relevant hash tables too.

        Burn it into a DVD and use the DVD to boot your system.

        You can easily discover all the login passwords for different user names.

        Case 2: Laptop

        Check your laptop battery?
        Is it detachable?

        If it is, remove in from the laptop, plug in the power supply and see if the power light is coming on, in any case try to power up the laptop without the battery.

        If it boots up, you may put the battery in place and observe what happens.

        This could sort out your issue.

        Let’s hope you can at least get one system working.

        • 1
          1

          Thanks, Human Touch”
          .
          I greatly appreciate your readiness to help. That’s something that all of us must appreciate and emulate.
          .
          My computer guy from Padukka came today, and will come again.
          .
          I’m fortunate to have him. Really nice guy.
          .
          Something like that will be done.
          .
          On my part, I’ve turned him into an “English user”. I’ll never be able to turn him into a reader. Language users are of all sorts!

    • 1
      0

      Dear Nathan,
      .
      You have balanced that comment very well.
      .
      The beginning of wisdom is to acknowledge that there are things that we don’t know. We have to ask for expert opinion, although that also must be critically evaluated.
      .
      By now we should know whom to trust and whom to be wary of.
      .
      I trust you, and also nimal. I’m waiting for his response. Within the small area that I claim to know well, my knowledge is nearly total. More significantly, I haven’t been contradicted.
      .
      Panini Edirisinhe, currently in Maharagama

  • 9
    1

    Why can’t Lanka print unlimited forex simultaneouslywith LKR .??

    • 12
      1

      Chiv,
      “Why can’t Lanka print unlimited forex?”
      Chiv don’t you start giving Cabral ideas.

      • 3
        0

        Sorry OC I got carried away after waking up from a pleasant dream where I had wallet full of Greenbacks and paying in $ , for a kothu and tea. It took some time for me to realize, only the price has rocketed as in $ and my wallet was empty.

    • 3
      0

      Yes Chiv,
      You mean sub contract to his Home country US of A?!
      10% delivered straight to California!!
      Cab(r)aal Cabraal will jump up even with his Arthritis!!!

  • 19
    0

    IMF cannot be the answer because Cabraaaal says he cannot get down on his knees because of severe arthritis. Basil and MR can’t even stand let alone kneeling. Can our. Iron Man do ???

  • 14
    0

    “This is a dynamic plan, we will tweak it, fine-tune it, or even change some parts, as we move on!”
    Nivard Cabral, the mediocre accountant heading the CB, has a ready answer for any problem. Usually more empty words like the above. As a Viyathmaga member, he is typical of that clique of semi-educated scoundrels.
    As I see it, the country’s problems come from the habit of living beyond its means, and an inflated opinion of its place in the world. The politicians only do what the population wants. You want free education, healthcare, fertilizer, pensionable jobs, OK you got it! China, India, Japan, Bangladesh, will give us the money!
    (contd)

    • 12
      0

      We are fed rosy pictures of ourselves. The Pearl of the Indian Ocean, a 2500 year old civilization, a tourist paradise, etc. We are supposed to be a “Middle Income Country” (MIC), and perhaps the Nelum Kuluna is supposed to prove that. But will a real MIC fall flat and go bankrupt at the first virus that comes along?
      If we are an MIC, how come we can’t afford brand new cars, but depend on Japanese cast-offs? How come bus passengers can’t afford to pay fare for better buses? Even the Indians can afford new cars.
      When we build highways, bridges, whatever, we get the fanciest ones possible. Take the latest Kelani Bridge. Did it really have to be so fancy? The British built a simple cast-iron one (which is still serving somewhere else). Its replacement was Japanese funded but simple and practical.
      Did we really need all the expressways? The real need was to ease urban and suburban traffic jams. The highways have made them worse.
      It is argued that highways make it easier for tourists to travel. This is like the argument that we need a national airline to bring tourists down!

    • 2
      0

      Brilliant comments, dear oc. Mine have been too lachrymose today
      .
      What to do? It’s a desperately difficult road ahead. But the sunshine stories will be there. What’s the size of that gemstone. Not as large as the “Express Pearl”, but the largest gem ever found. I don’t know much about all these precious stones. I’ve always been too poor to afford them.
      .
      Haven’t they found petroleum in the Gulf of Mannar? They always do, when the future looks impossibly difficult.

      • 1
        0

        SM,
        I wouldn’t be surprised if another huge gemstone is found at the bottom of the Gulf of Mannar. Two birds with one stone, pardon the pun.

  • 8
    0

    When Cabraal was appointed as the Governor, I remember somebody saying he (Cabraal) was the best man for the job.

    • 0
      1

      That is still true, because the Central Bank is Lankawe Bankuwa. Even the writer of this essay has many times praised the Cabal as the smartest economist because he ran the $400 B war with 3 months LC credit. Unless Old Rowdy King had broken CFA 2002, Japan $2.5B Norway $1 B and EU $1b to be given on that CFA in those years. There is a folk lore of Sinhalese: A fisherman had found a watch in his net. He brought it to shore and let it to run back to sea. But that crab was ticking only but was not able to run. He cooked; it was not dying. He became nervous, so put it on a rock and throw with another one over it, standing little far away from that crab. The crab cracked opened. Now he checks it, it was dead. He thanked Buddha to help him to kill that haunted crab and went back to sea to continue his fishing.

      • 0
        2

        But not carrying the beggar bowl, what else the Modayas who reject the $4.5B donation for CFA 2002 but cancelled it & fought the $400B war with Chinese LC credit facilities. The author sometimes tries to establish what a good deputy to Cabal he is. The foresightedness in Lankawe means the pot & Kettle calling themselves “black”. Or rather fishing women’s baskets has more fragrance than the wildflowers.

    • 2
      0

      Eratne,
      I agree that Cab(r)al Cabraal is the best person that we have employed to come to this point of maturity at least, “Cabinet to have a ‘special meeting’ to enable/discuss a meeting with IMF”.
      What a advancement??
      Cabal spent US$ 387 million ‘Shoring up’ the Rupee yesterday.
      Clever boy?!
      Did he succeed?
      No. Not at all!
      So now seek IMF, after Bad case became worse, atleast before it became worst!!!!
      Otherwise the ‘Thanakola eating'” Meeharaks” will not get it into their swollen heads, because of the thick skulls by over eating at the parliament canteen, subsidised by the tax payer!
      When that happens, then some sense will return to SL and it’s economy!!

  • 8
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    Thank you Dr Wijewardhana, looking at the situation today, I thought to find out to most appropriate sinhala proverbs.

    People were misled by MEDIA MAFIA and mlechcha SLPP outfit with the direct mediation of former president, all times clown, SORYSENA. But in the same time, RW was used to scapegoat, he was not aware of though. Today looking back, all what achieved at the begining of GOOD GOVERNANCE was more than enough, although media never painted it in favour of them.
    People are stupid as POLITICIANS of SLPP. They thought TOMPACHAYA of the nation, so called PRESIDENT who gave the leadership to end the war, was kept above altar so that even new voters could easily be misled. Outcome was as a credit to MAHINDA the modaya, his brother (known empty vessel, went missing but for his own greener pasturers from 1990 to 2005 became the president- at the time, SORYSENA was the president, all verbal attacks were there, even a “pollellak – cocounut husk” would have got elected, in that moment, since the people were fed up of ramphant state corruption of RAJAPAKSHES. However, the very same people milsed by SIRSASA TV and other two vicious TV channels paved the way CRIMINALs tobecome leaders. The outcome was glass clear to atleast 8 millions of voter eligible citizens in this country, however, but majority of voters let RAJAPAKSHE-POLITICAL masturbation a chance……..today, we are about to be ALL TIMES beggars to the world.

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    They will not. They do not have any sense.

    Only hope is totally collapse of Sorry Lanka so it can have a new path.

    Down with Sri Lanka!

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    Now that Sri Lanka has gone on its knees, begging bowl in hand, to Big Brother India, the latter is in a very powerful position to make conditions on the currency swap or loan etc by forcing the government to conduct provincial elections to ensure some form of autonomy for the country’s Tamil population in the North and East. The 13th Amendment notwithstanding, the lender has supreme power as the beggar cannot seek IMF or Chinese funds to get over its current embargo.

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      L.P,
      “by forcing the government to conduct provincial elections to ensure some form of autonomy for the country’s Tamil population in the North and East. “
      Those are probably the unstated terms of the agreement. But it’s better this Pohottuwa lot gets to carry the can which they wouldn’t have allowed Ranil to do.
      Still, I would advise the lenders to make sure the terms are fulfilled.

      • 4
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        OC,

        a man who cant settle that GAS-CYLINDER BLAST issue – wihch is not become a life threatening to all – letalone to make miracles ?

        Pigs might FLY.
        .
        These men are the model for REAL BUNCH OF CRIMINALS. Ethiopian leaders do their best to their nation, being close to european investors, but our B puthas……. enjoy their turn … allowing their sons to live up their propensities. ::::: At least today, PINGUTHTHARAYAS shouldwake up from their long sleep and address the issue, that they were misled by RAJAPKSHES for their unfair comeback. Else, those who offered ALMs to them would curse for them forever. Had PINGUTHTHARAYA NOT made such public statements in favour of RAJAPSKHES comeback, things would have worked differently.

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    Arrogance, Family dictatorship, Corruption, Bribe, Cheat, Murder are their weapon. Backdoor dealings are their Power. Do they bother people suffering? They have guaranteed US or Chinese or Indian citizenship. Rob the Nation and run away.

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    Iron Man has suspended Parliament and gone abroad on a ‘private visit’. Will he return with the stolen millions? Will he return at all?

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      Paul,
      If he doesn’t, his senile aiya Mahinda will be President by default. Could it be worse? An un-charismatic incompetent replaced by a charismatic crook?

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        old codger

        Has he gone to Singapore for the sole purpose of arranging safe logistics to smuggle the largest blue sapphire (weighing 310 kilograms) …….. ?

        • 2
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          NV,
          Multi-purpose as always, primarily to explore bets possible price and ‘Fixers’ commission ‘DEAL’ (Americans have even over “15 minute coffee meetings”!) for 310 Kg sapphire, to tide over $ shortage/repay loans in the immediate short term!?

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        OC,
        The Prodigal would become PM?!

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          Mahila,
          Yes, and when the Great Redeemer kicks the bucket, we will have a Prodigal President.

          • 1
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            OC,
            By then we should be able to get Veralu and Ambarella Achcharu (Indigolla Church festival fame product) instead of travelling to outskirts of Gampaha, from the wayside vendors by the streets of Colombo and Sri Jayewardenepura)
            You call them Progress?!
            Oh emancipation!
            Full grown democracy?

    • 3
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      Paul

      “Will he return at all?”

      He is safe either in Sri Lanka or in the US.
      Singapore resident Arjuna Mahendran may have some incriminating evidence against Rajapaksa family. As Central Bank chief he would have followed the money trail.

      Has he gone to get advice from Arjuna about how to balance (cook) the foreign exchange accounting books?

  • 7
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    ”…Will Our Policy Leaders Come To Their Senses?”

    Its not coming to their senses but incompetence, ignorance, cronyism & lack of integrity that is driving this country over the edge. Cabral’s road map, even with provisions for ‘tweaks & fine tuning’, has failed – period. In any employment, incompetence is not tolerated & this is not the first time for Cabral. Even in his previous stint as Governor of CB, there were questions of his incompetence, from failed investments in Greek bonds to hedging deals, not to mention, overall mismanagement of public funds, yet continues unashamedly. Of course, resignation as a honourable gesture for failure is not in the genes of our politicians & their cronies. This yob, along with leaders of this country (past & present) were, & are, out of their depth but will cling on in politics until the last drop of blood is sucked out from the country. These punks are responsible for the endless misery & destitution of millions but how they can enjoy life from ill gotten & plundered wealth & sleep at night, is beyond my comprehension.

    Will these yobs be ever held responsible? I don’t think so. I don’t believe in a judgement day, nor, in an almighty god but it is said that god moves in mysterious ways (or call it karma) & I find solace in that.

  • 2
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    “When Will Our Policy Leaders Come To Their Senses?” Instead, why not we ask:

    When Will Our PEOPLE Come To Their Senses? The ONLY way to correct this “Madness” is to get the PEOPLE to be “SENSIBLE”. Already, the “Health Services Union Members” have KICKED OUT both Rev. Muruththettuwe Ananda and Saman Deshapriya and showed how “SENSIBILITY” works. Follow this EXAMPLE – the “Bench Mark”.

    • 2
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      Simon,
      Very good Sign and very Good Point!
      Voters must realise, “What is Good and Bad”?
      If not Doomed!!

  • 2
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    Hi Vela,
    “Foreign Pensioners were paid 230 Million Sri Lankan rupees as pension”
    I had some time to reflect on this issue.
    Unless I have misread your article, How does SL Rupees 230 Million help to plug the hole in the economy?
    230 Million SL Rupees equivalent in today’s currency exchange to US $ 1 Million in the shortfall
    Even if this is for 1 month, then annually 12 Million US %!!
    Issue faced by SL is lack of US $ Billions?!
    Decline in reserves US $ 2.6 to 1.2 Billion in a month. Sufficient to meet import bill of SL for few weeks only!!!
    ‘Plug in the hole will not stay even a millisecond to block and benefit.
    Why impose hardships on Sri Lankans, who had served this country diligently, long before the advent of 10% culture in addition to Government Pay to ‘serve’ the citizens of SL & supplemented by wealth, ‘ill gotten’ at Tax Payers expense!
    I am sure you did not think of this great disadvantage to those pensioners in suggesting this move?

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