10 December, 2019

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Gotanomics: Can It Turn Around The Ailing Sri Lanka’s Economy?

By W A Wijewardena

Dr. W.A Wijewardena

Gotanomics from the new President

I have argued in this column repeatedly that Sri Lanka’s economy was in a dire state, moving from bad to worse on each passing day. It was a warning to economic policy managers that they should take effective measures quickly to arrest the declining trend, turn it around and push it back to the long term potential growth path.

Except the Central Bank which was successful in taming inflation at around 5%, the real sector economic policy makers appeared to be reluctant to hear the bad news. Now, President Gotabaya Rajapaksa, elected to presidency recently, has to do the nasty job by implementing the economic policy package announced in his election manifesto. This package comprising his economic wisdom can be called ‘Gotanomics’.

But, time is running out for President Gotabaya Rajapaksa. If early action is not taken, the economy would descend to a further depth. It will certainly deny Sri Lanka the opportunity of attaining the economic glory which is the expectation of all Sri Lankans today.

A pitfall to avoid

In the Manifesto, Gotabaya has just devoted only two pages to bring out the nature of economic ailment from which the country is suffering today. The balance 80 pages have been spent for presenting his policy package which includes Gotanomics too.

This is a good sign because he has not wasted his time for blaming the previous administration. It is in stark contrast with what the leaders of the previous administration did continuously. I can recall one hilarious incident about which I wrote earlier.

A fine lesson from a Malaysian advisor

At the Sri Lanka Economic Summit hosted by Ceylon Chamber of Commerce in August 2016, the then Minister of Finance Ravi Karunanayake castigated the previous regime for all the economic ills which the country had been facing at that time. This he did two years after taking over the administration. Immediately after his speech, it was the special guest at the Summit, Dato Sri Idris Jala, CEO of Permandu Malaysia and Economic Advisor to the Prime Minister who took the podium.

He said amidst loud laughter in the audience: “You guys are extremely lucky because you have a previous regime to blame. We are not lucky because it is the same political party under a different leadership which is in power. Hence, we cannot blame ourselves. Instead, we did a soul-searching exercise to find where we had gone wrong.”

The soul-searching exercise which he recommended to Sri Lanka was taking top bureaucrats and private sector leaders to an economic capsule, diagnose the ailment and prescribe the necessary medication. Once the job was done, both the bureaucracy and the private sector had signed it off taking ownership of the policy. That was how Malaysia had prepared itself for the emerging Fourth Industrial Revolution, code-named Industry 4.0.

Viyathmaga, the think-tank behind Gotanomics

Gotanomics comes from a series of such open consultations done by a think-tank which branded itself ‘Viyathmaga’ or the Path of the Erudite for about two years. Hence, the exercise involving the policy capsule which Malaysia had done has already been completed, saving much time for the President at a time when urgency and swift action have been the critical buzzwords.

However, it is now necessary to reassess the main components of Gotanomics in the light of emerging global as well as local developments. Further, a Manifesto is just a blueprint outlining only the major policies being pursued. Each such policy has to be developed into a detailed work programme eliminating inconsistencies, shedding which are irrelevant today and focusing on the future rather than the present.

In developing these work programmes, it is essential to get the inputs of the Central Bank to prevent Gotanomics from running into conflict with bank’s policies. Once finalised, it is necessary to have it signed off by the bureaucracy, private sector and policy leaders. It is only in that way that Gotanomics can become the policy philosophy of the country.

Modest economic goals in Gotanomics

Gotanomics has some modest economic goals to be achieved during 2020-5, compared to over ambitious goals set by previous governments. Economic growth is to be lifted from the current below 3% to 6.5%. Per capita income which stands at present at $ 4,000 is to be increased to $ 6,500, a midpoint in Sri Lanka’s journey toward a high income country.

Three key macro variables are to be kept below some benchmarks which are not very far from such numbers at present. Unemployment is to be kept below 4% which is the current rate in that number. Inflation will be below 5%, one percentage point above the maximum of this number at present. Budget deficit is targeted to be below 5% of GDP, a drastic reduction from the current 6% plus.

Two difficult if not impossible goals have also been targeted. One relates to lending rates of commercial banks where Gotanomics is planning to bring them below 10%, compared to the current levels between 11% and 20%. The other one relates to the exchange rate. Gotanomics plans to stabilise the exchange rates meaning that it will not fall below the current level of Rs. 182 per US dollar. Both are market determined and therefore are beyond the edicts of a President.

Any attempt at subverting the market would have disastrous consequences for the other goals immediately and the long-term economic growth later. That is why it is necessary to work closely with the Central Bank which is the authority on both policies.

The return of the big government

The main feature of Gotanomics is the central role which the government is going to assume in directing the economy. A National Policy and Planning Commission or NPPC is to be established under the President. Most probably, it will be headed by the veteran economist Dr. P.B. Jayasundera or simply PB, Secretary to the President. As Finance Secretary earlier, he has proved himself to be an able policy manager and an on-time deliveryman.

There were two similar bodies under the previous administration too: A Cabinet Committee on Economic Management or CCEM under the Prime Minister in the first three years and a National Economic Council or NEC under the President in the balance two years.

Both these bodies concentrated on fire-fighting and micro issues relating to the economy and failed to come up with a comprehensive national plan. The proposed NPPC should avoid this pitfall. It already has a fairly comprehensive economic plan covering all the sectors as designed by the think-tank Viyathmaga to begin with. It is a matter for NPPC to reassess it, as I have pointed out above, in consultation with the Central Bank and convert the final product to detailed work programmes to be implemented by different Government agencies.

A full-stop to privatisation

There are several other features embodied in Gotanomics that would strengthen the Government’s role. It has very clearly pronounced that no state enterprise will be privatised and even gone to the extent of proposing the enactment of laws to prohibit it. These are in fact very weak propositions since no one can bind a future Parliament to uphold them. Even with regard to the ones already privatised, the Government is going to issue directions and all private sector stakeholders within those enterprises are required to comply with them.

Since many past privatisation activities have been marred with alleged corruption charges and not been driven by pure efficiency-based changeover plans, there is a political logic behind these three moves. But the political logic has subsumed the economic logic which is based on efficiency requirements and the need for changing business strategies in line with emerging global developments. A management body functioning under a politician is unlikely to act swiftly and with foresight to save an enterprise from an unforeseen external shock.

If the past mistakes are a lesson for future planning, one should examine how the new managers in the nationalised tea plantations in 1970s failed to notice two changes in the tea markets in the Western world and act appropriately. One was the change in tea habits from time-taking tea brewing to instant tea and in the case of instant tea, to Cut, Tear and Curled or CTC tea. The other was the movement of young people from tea to soft drinks. Both were disastrous to Sri Lanka’s tea market and costs are still being borne by the country.

Hiring competent managers

Gotanomics is planning to overcome this issue by introducing two measures. One is a rebellious measure which should be supported by all. In this measure, it is proposed to hand over the management of these enterprises to competent and talented managers who would be paid market salaries and are subject to continuous performance audits. If they fail, like in a private company, they have to quit. This was the model used by Singapore for State enterprises under State ownership.

A likely hindrance to successful implementation of this model is the non-availability of a sufficient number of talented managers to run these enterprises. Singapore overcame this by hiring foreign managers on lucrative salaries but assigning time-bound targets to them. Gotanomics is silent on this possibility and therefore, it is the job of NPPC to assess it and make suitable adjustments.

Another bureaucracy

The other measure is to bring these enterprises under the control of a newly established National Enterprises Authority or NEA to reform them under state ownership to assure their profitability and viability. The target is to free the taxpayers from the responsibility to bail them out if they become bankrupt.

The present model followed by Sri Lanka is to subject these enterprises to continuous evaluation by a team of technocrats housed in the Public Enterprise Department of the Ministry of Finance and assist the Parliamentary Committee on Public Enterprises or COPE to make a final recommendation.

The past COPE reports have over-focused on financial audit to the exclusion of the needed ‘enterprise audit’. In an enterprise audit, what is being looked at is whether a programme carried out by a state enterprise is in accord with its mission to mitigate emerging global and local risks.

When the financial audit focuses on financial irregularities and the media give the widest possible publicity to them, managers in these enterprises will become extra-cautious and refrain themselves from making appropriate decisions. This is the main reason for the wide-spread inefficiency in state enterprises. As such, this possibility also has to be avoided under the proposed NEA system.

Proposal for a simple tax system

Gotanomics has proposed a simple tax system with low rates and a wider tax net to ease the burden on the present taxpayers. Sri Lanka’s present tax system is like the system of Hindu deities. There are reportedly 330 million deities and the number grows every day when a new deity is created to address a new human issue. Since there is no a rational basis for creating new deities, some of them obviously overlap the functions of old ones.

Similarly, a multitude of taxes to generate revenue from every possible tax base has made it a very complex one forcing taxpayers to evade taxes which in turn has resulted in a low tax yield. A salient feature in Gotanomics is therefore to abolish several of offshoot taxes and reduce existing tax rate.

This is a very big gamble which President Gotabaya Rajapaksa is taking as the Head of the State. Both measures will reduce the continuous cash inflow into the Treasury requiring it to raise more liquid cash by way of issuing Treasury bills.

The challenge is to limit this practice to a short period and decide on an exit point. The gamble is if the tax net does not expand as expected and as a result, the cash shortage becomes permanent. Then, the proposed strategy becomes a curse rather than a blessing.

A gamble with high risks

In terms of the strategy in Gotanomics, the corporate income tax is to be reduced from 28% to 18%. The lower taxes are expected to increase the retained profits within the corporate system and plough back the excess income into new investments.

The higher profit base in the corporate sector will increase the total tax revenue despite the lower tax base. However, the reinvestment of excess profits by the corporate sector will depend on many factors over which President Gotabaya Rajapaksa has no control. It will depend on market demand, both local and foreign, competitive edge which the Sri Lankan firms have over their external competitors, new technology they have acquired, the environment for doing business, etc.

If these ground requirements are not conducive, the Government will lose in the gamble creating widened gaps in the budget.

The scrapping of the advance tax collection system

A similar gamble is proposed to be played with respect to personal income taxes as well. The present early tax collection system – Pay-As-You-Earn or PAYE tax – imposed on both private sector and corporation sector employees is to be abolished and the marginal tax rate which is at 24% at present is to be reduced to 15%.

At the same time, the tax-free threshold in the case of the employment income which stands at Rs. 700,000 will be increased providing further relief to employees who file annual tax returns. Similar to the reduction in the corporate income tax, this measure will also reduce the monthly cash inflow to the Treasury.

But, after the abolition of the PAYE tax, all liable employees and others will have to file annual tax returns and pay taxes not only on the employment income but also on the other types of income. If it happens, it will certainly increase the total tax revenue despite the low tax base. If it does not, once again the Government will face a widened budget gap.

Taking out offensive taxes

There are also proposals to abolish or reduce other types of ancillary taxes. The Nation Building Tax or NBT, Economic Service Charge or ESC and Withholding Taxes or WHTs will be abolished. The Value Added Tax or VAT will be reduced from 15% to 8%.

Two other tax proposals aiming at incentivising businesses appear to be non-working. One is the five-year holiday given to agriculture and small and medium enterprises. Since these enterprises are not in the tax net at present, the particular tax holiday is irrelevant for the purpose. The other is the zero-VAT rate given to businesses in the tourism sector provided they use 60% of local inputs when providing their services to tourists. Since it is the worldwide practice that VAT on the sector is passed onto tourists, this particular holiday does not leave a surplus with the cash-strapped tourism sector businesses.

Going for new technology 

One important aspect in Gotanomics is the measures to introduce new technology. Though not explicitly expressed, it will prepare the country to the Fourth Industrial Revolution or Industry 4.0. This is a salutary measure since it aims at eliminating fear of technology, on the one hand, and making the people accustomed to new technologies, on the other.

But the full burden of equipping people with capacity has been passed onto the State university system. Since the present cash position of the Government does not allow it to increase the capacity of the State university system immediately, Gotanomics will have to activate the private sector owned higher learning system to meet the demand.

Inviting high-ranked Indian universities to Sri Lanka

In 2004, the Government had an arrangement with the Indian Government to have a few Institutes of Technology on the style of the famous Indian Institutes of Technology or IITs. With the change in the government in that year, this proposal was abandoned midway through. It is now time for Sri Lanka to reopen this path. Hence, Sri Lanka will benefit if President Gotabaya Rajapaksa opens up the abandoned dialogue when he meets Prime Minister Narendra Modi toward the end of this month.

Without quality-minded private sector-owned higher learning institutions, it is unlikely that Sri Lanka could have the needed critical pool of scientists and engineers to help it to attain its main economic goals. Gotabaya’s manifesto is silent on this issue. But the emerging ground realities might compel his administration to review this stance.

Capacity improvement in the Government sector

Gotanomics is a new strategy involving the direction of the economy through central government action. Can it make a turnaround of the country’s ailing economy? It may, as it has worked successfully in Taiwan, Singapore, South Korea and even in post-war Japan.

The secret of success in these countries was the capacity improvement in the central government to act with foresight. Thus, Gotanomics will work if the same Central Government machinery is established in Sri Lanka.

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

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Latest comments

  • 1
    3

    Dr. wijewardane: Sri lanka is talking about economy in terms of what is happening developed or developing countries with sound plans, strategies and good practices. Long ago, Sri lanka had the village-Tank or the reservoir- Pansala and the vihara concept through which it made the village self sufficient except Salt, I suppose. At present, Sri lanka is dysfunctional and every way is broken. Even developed countries are self sufficient with respect to their food. they produce, their Staple foods by they themselves. Sri lanka has to do tha same. Rebuild only sustainble Technology and not with High fertilizer and pesticide requiring paddy varities and lot of fertilizer and lot of Kidney patients who are terminal or need new transplant. any Technology manufacturing also can be decentralized as was the Apparel manufacturing industry that was dismantled because it was cheaper buy else where and relabel and ship back to some where else. We had lot of manufacturing what happened to those. so, start with those in order to make the country self sufficient and then improve upon for export. For example, we can assemble buses for local use and improve those for export at lower prices.
    WAges or Salaries and perks have to be cut. Europe or the developed countries only went down with all the human rights, labour rights like Crap. If they do not like ask them to go back and harrow the paddy field or the CHena. PAddy cultivation, subsidies should be only for fertilizer and pesticide less old varieties.
    JUST THINK WHAT IS THE USE OF WEALTH once our children are doomed and become Druggies, Drunkards, Gamblers or street loitering women.

    • 5
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      How fertilizer and pesticide make our Druggies, Drunkards, Gamblers or street loitering women. I suppose you have some sort of brain fade.

    • 4
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      How fertilizer and pesticide make our children Druggies, Drunkards, Gamblers or street loitering women. I suppose you have some sort of brain fade. 😝

      • 4
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        Is it ok for men to street loitering ?

  • 2
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    I say all these discussions on economic development is applicable to developed countries and how they maintained the economic development. The discussions how the presently economically developed, in truth developed but now bankrupt countries say they became developed or living standards because stealing resources from poor nations and because of Slavery. That is working for nothing.So IMF helps and our hair splitting theories are just BS.

  • 2
    1

    Gotanomics: Can It Turn Around The Ailing Sri Lanka’s Economy?
    YES ! IT CAN TURN AROUND THE AILING SRI LANKAN ECONOMY.
    One of the first things that should be put to action is to to hand over the management of these enterprises to competent and talented managers. If such managers are not locally available, Sri Lankans with the necessary education, experience, knowledge and who are willing to sacrifice a few years in Sri Lankan, should be immediately selected through a “fast track” process and the job/assigments should be handed to them so that they can commence the process of “TURNING AROUND” of the SOE’s. They should be entrusted to show acceptable progress within the first 6 months. Failure to do so, they should be asked to resign and leave. This should also apply to appointments to the position of Chairmans and Board Directors of Satutory Government Board and Corporations where ever necessary.
    Noor Nizam – “a patriot”.

    • 4
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      Noor Nizam -“a opportunist” .

  • 3
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    It’s good that there will be firm control on enterprise management. During Mahinda’s time, the country was flushed with Chinese loans, but there was no proper structure and controls in place to ensure legitimate functioning….businesses soon went bust; businesses liquidated, but as money was doled out to private entrepreneurs, nothing was returned to banks or government…..vast amounts money went out of the country…..country plummeted into debt. In this Gotabaya era, lessons would have been learned by now. People were spoil with the free and unaccounted flow of money at that time. We only hope that Gota’s tight controls on all sectors of enterprise will not result in him being called a dictator

    We hope that the different tax formulas will work. Reduced taxation will of course depend on how the enterprise management will work.

    As per 4IR, we can only be subsidiaries of the Malaysian 4IR. They thought of it and implemented it first. And besides, they have oil&gas and also destroyed all their ancient forest for palm oil (we hope and pray that our ancient forests will not be destroyed to keep up with M’sia). They have plenty of money to jump-start the 4IR. Get rid of debt before taking on more loans should be the motto.

    • 3
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      “We only hope that Gota’s tight controls on all sectors of enterprise will not result in him being called a dictator”

      Ramona,
      He does not have the qualities of a dictator but a ‘covered traitor’.
      Do you think these guys were humiliated and threatened by a democratically elected head of a state?. Are you insane to declare the CID and the police an ‘Enterprise’? You should get your head examined soon.

      [:Shani Abeysekara led CID investigations into the disappearance of cartoonist Prageeth Ekneligoda, the assault on journalist Upali Tennekoon, the murder of journalist Lasantha Wickrematunge and the disappearance of 11 youth;}
      [:There were reports that security provided to Nishantha Silva had been withdrawn after his head, Director of the CID, Shani Abeysekara was transferred a few days ago.:]

      [:The Colombo Gazette learns from reliable sources that just before the Presidential election Nishantha Silva had informed his close aides that he feared for his life if there was a change of Government at the just concluded Presidential election.;}

      Nishantha Silva was involved in the investigations into high profile criminal cases including that of the murder of journalist Lasantha Wickremetunga and the abduction and disappearance of 11 youth and the disappearance of cartoonist Prageeth Eknaligoda.

  • 3
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    Mr. Wijewardana,
    You may be an expert in ‘economics’ among the so call Phd. (Permanently Head Damaged) community. The simple answer to your question is a big ‘NO’.
    “Gotanomics: Can It Turn Around The Ailing Sri Lanka’s Economy?”
    This man is not there to save the country but to save his own a**e. I have not done my reading but knew this would happen to this once prosperous island from the day decided to leave the country.

    ” Wisdom does not come from studying great theories or philosophies, but observing the ordinary”

    So save your breath & time to enjoy your retirement peacefully. It’s not just this island, but the whole world is on the downward trend and no deity is there to stop that.
    “Sabbe Sankhara Anichcha, Dukkha & Anaththa”

    • 0
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      [:You may be an expert in ‘economics’ among the so call Phd. (Permanently Head Damaged) community.:]

      (With apologies)

      To all you learned Doctorate holders who has been disliking reacting negatively towards my honest opinion of the situation , not only in ‘Sorry Lanka’ but around the worldthe truth, the reality.
      I am not surprised or effected in any way, as there are thousands of so called ‘Doctors’ around the world and some bogus ones specially in ‘Sorry Lanka’. Who is issuing these pieces of paper? Enlightened beings?. The scientists around the globe has realized and agreed that ‘Buddha’s’ teachings is the only science which explains the truth of reality.
      So, my dear friends, don’t be disheartened or disappointed, but let go of your ego and join the path, the true path, to Peace, Happiness an Well being of the all living creatures, the ‘Eightfold Path’. Metta to all!

  • 3
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    WAW,
    ….in short, the essay suggests a conditional success (if if if). I have two questions: 1. How can a Gvt managed system can ever expect intended results if the whole thing depend on market factors unless the market and the private sector behave favorably? This is very important b’cos this where the previous UNP Gvt ran into problems. 2. What is the guarantee that the key people at the control system of the economic plan (MaRa, P. B.;etc) wouldn’t play the game of hiding bad statistics – the tactic they used to deceive the country with false picture of progress? All in all, I believe that this economic plan is nothing but “doubling down” on a bet with losing trend.

  • 4
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    Good analysis as usual by Dr. W.
    “A likely hindrance to successful implementation of this model is the non-availability of a sufficient number of talented managers to run these enterprises. Singapore overcame this by hiring foreign managers on lucrative salaries but assigning time-bound targets to them. Gotanomics is silent on this possibility “
    Gota has an advantage here. Unlike Ranil, he can hire any number of foreigners or sell any assets without running the risk of being called a traitor by the likes of Gongwansa.
    The proposed IIT style colleges should be revived. The stultified local universities are incapable of producing the required technocrats, mostly staffed as they are by idiots like Nalin Dr Silva and Channa Jayasumana.
    It is difficult to see how the Rupee can maintain its value. Contrary to popular opinion, the rupee has fallen at the same rate as other regional currencies like the Indian rupee, due to the appreciation of the USD. The evidence is there for those who are willing to look.

    • 1
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      Perhaps another reason for the lack of talented managers is the lack of talented electorate which would not vote in the latest populist to turn economic policy on its head every few years. What talented individual would remain in a country like this?

    • 1
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      Old Codger,
      This essay needs to be viewed not based on the content but on WAW’s hope that his old colleague and the current permanent sec of the finance ministry S R Attygalle is capable of tackling the extremely challenging job in the hand. My guess is that, if Attygalle is an honest professional, he would not last more than a year in the job. The reason is simple: The conflict between the hard choices needed for economic recovery and the deceptive political habits of Attygalle’s boss MaRa who would force him to play the usual deceptive game he played last time as well when PB was holding his post. The key question is whether PB will go along with his current boss GoRa or will play along with MaRa’s “numbers” game!

      • 0
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        DP,
        I am sure all the good intentions will finally turn into a numbers game. But of course we will have a very orderly country on the outside. See how the hapless pavement hawkers have disappeared. Expect more soon.

  • 1
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    o The contents in pages in Manifesto link below 14, 15, 16 and 17 is important for reference.
    https://gota.lk/sri-lanka-podujana-peramuna-manifesto-english.pdf?fbclid=IwAR3qz7ynEStvCW5lYcDAh3av7Y5mjlJKmhF1AU7QqxprMw8_jTTyAiIyW0c

    o Hope, that there will be a Monitoring & Evaluation / Tracking process after converting MANIFESTO to PLAN OF WORK with all major activities for 5 years. It is not an easy task.
    o Auditor General Shows mismatch in loans and assets
    http://mirrorcitizen.dailymirror.lk/2018/02/08/auditor-general-shows-mismatch-in-loans-and-assets/

    It is regrettable to note, that majority of Construction projects in Sri Lanka, commences with X amount of budget and after some time, it stops as a result of more budget requirement due to of low price / lack of design details at the inception and spend 5X times than the original, with extension of time period. https://www.architecture.com/knowledge-and-resources/resources-landing-page/riba-plan-of-work
    Getting aids or loans in the future, to repay the debts, will not recover the capital expenditure expended for and will never end with the union of with corrupted politicians.

    Must arrive at the Total Project Cost at the inception with proper Economical feasibility reports / details and Recovery of Project Cost / Revenues in X number of years.

    Examples are:
    1. Lotus Tower
    2. Army Headquarters and there were more than this in the past.
    In the construction industry, there were no proper Commercial / Contract and Cost Management of large projects, from Inception to Completion, especially feasibility, concept design, design development cost plans, Preparation of Bill of Quantities, procurement options and Management, Analyze Risk, Tender, through Procurement, Preparation of PPP Tender documents, Contract Administration (FIDIC) and Final Account closure.

    Also, need to concentrate on National policies, as in the Manifesto for:

    A. National Security
    B. National Economy
    C. Foreign Policy
    D. Law and Order / Democracy
    E. All major other functional areas, Finance / Contract, Health, Education Security, Agriculture etc.
    F. Reinstate Industries like: Cement Corporation, Sugar Manufacturing, Textile Corporation, Fisheries products and new industries so that we need not to import from other countries.

  • 8
    5

    This article wonders if gota can make sri lanka another singapore or japan?
    The answer is no! Not unless the island is handed over to another nation to rule (like it was under british rule).
    Gota first of all is a racist thug. Alot of his energy goes towards trying to destroy minorities. You dont see such behaviour from the governments in japan or singapore.
    And even if gota was some kind of a benevolent visionary (which he has proven he is not already) he nor the government can do all the work to bring sri lanka to the level of japan.
    This is because Sri Lankans are a lazy and criminal minded people. When Japan was hit by the tsunami in 2011, it was noted that no looting occurred at all. But what happened in Sri lanka after the 2004 tsunami? Rampant looting. People were even seen stealing jewellery and cash from dead bodies and other places hit by the water.
    The minorities on the island have crooked tendencies but can work hard and be productive (which they have proven). Sinhalese on the other hand have the same crooked tendencies but dont want to work either.
    They are like the malays in that regard. The difference is that malays understood that they are not capable of developing a nation in the modern age, so let the indian and chinese minorities there do the work to uplift malaysia. They have a racist bumiputra system where the malays leech off the hard work of minorities to some extent. But not to the point where the minorities are hurt too much. They manage to maintain a delicate balance.
    Sri Lanka as a nation has proven time and again that it is not willing to do even this. Sinhalese simply cannot stand seeing minorities prosper on the island.

    • 4
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      John,
      .. .. “When Japan was hit by the tsunami in 2011, it was noted that no looting occurred at all.

      ……….But what happened in Sri lanka after the 2004 tsunami?”

      …….MaRa stole $800 million of Tsunami funds.
      …………….
      …Willie Gamage, well known NGO Kakka, helped MaRa to set up HELPING HAMBANTODA, an NGO to facilitate the theft worth $800 million.

      ….In reward to the great help from Willie Gamage, last week he was appointed as Governor, Southern Province.

      …..This is how GoTaEconomics work in reality.

  • 2
    0

    The entire world is targeting private sector lead growth. 1956 SWRD experiment continued by Sirimavo was a disaster.Today we are carrying their baby with a large no of loss making GOBU’s. Should we add more.

  • 3
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    Now I know why we are in Recession and facing Depression early in the New Year.
    All because Ranil Aiiyya sacked Galleon Ravi and put Mangala Samare in that Seat.

    What would Mangale know about Depression .
    Apparently he was always with Happy Go Lucky Boys , drinking Whiskey on Mt Beach while planning Yahaplana attacks on the Triple Gem and helping Keselwatta Kid to win the Presidency.

    The current 1.6 % can be lifted at least Half of One Percent , once Kamal Goone tighten the National Security and the Western Embassies give all clear for their Tourists.

    That can happen early in the New Year ,and prevent any chances of Depression..

    If Gota goes to China and borrow heavily to build more Infrastructure.to help Tourism, and even let Chinese Build more Shangrilas , the Growth will kick along nicely .

    And the Chinese may even consider writing off some Old Debts as a thank you for Gotaeconomics.

    But it all depends on Ranil Aiiyya’s Diaspora Economics.

    That 4 Billion USD which Mangala Samare arranged could have helped Ranil Aiiyya, to prevent that miserable 1.6 % in an the Election year.’

    Now if the Diaspora not only cancel that Agreement with Mangala and put in special demands to Ranil Aiiyya , like to punish Nnadasena for nor getting any Tamil votes to win the Election, Ranil Aiiya may even be forced to dust off those GSP Plus papers and present it to the EU again ..

    With the TNA up in arms as indicated by Abraham’s recent speeches about Nandsena’s Victory , Ranil Aiiya may even be forced to ask Gutteras to put UN Bans on Gotanomics to force Nandasena to bend over to Sampthatr , Abraham and the new addition Sivajilingam,, in the TEAM TNA..

  • 4
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    Gota is another low educated military man who have no idea how the economy works.
    Just imagine how he stole 340M of state money to construct his parents monuments?

    Does this means his parents will not be rot in the hell? What kind of economy these rogues know and it will be again sell the state to Chinese CCP and then get the loot from it.

    Aba Saranai Sri Lanka !

  • 3
    6

    Instead Gotler wll hire Mozad (Israel) Agents to snoop the opposition and Journalists, hire Chinese military to crush the bones those who protest against the government (Rathupusella was not good enoughand not up to his expectation), hire anyone with the surname Rajapakse to high profile jobs in the governmet, Qualifications- Who damn cares?? hirre more sharks to free meals (there will be plenty very soon). Author of this article voluntarily invites White Van if he keeps on advising him!!!!

  • 3
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    Sri Lanka has the benefit of the finest pragmatist in Sri Lanka in Dr. Wijewardena. He needs no appointment or title. He is imbued with patriotism enough and all he needs at all times is robust independence. If he needs an institution as a repository of research output, the Central Bank is ready at hand.
    An institutionalized group of 5 managers as LISTENERS to act upon with verve and resolve may be the final complement.

    To Lloyd George the Indian Civil Service was the ‘Steel Frame’ of the British Empire. Nehru wanted the institution but shorn of its attitude and IAS was born. Without the IAS, India will go to pieces said Patel. Today India has a cadre of 4,926 for a population of 1.33 billion. Sri Lanka has 2,000 plus for a population that is 1/65th. The cadre of CCS was 150 in 1963.

    Nehru’s vision created Indian Institutes of Technology. Today 16 in total and products exceeding a few lakhs in over five decades are in commanding heights of development. Hence Dr. W emphasizing the need for an Institute of Technology for Sri Lanka. Not second to it are Indian Institutes of Management IIM, with Ahmedabad of world class at topmost notch. If the acronym CCS is too grating for envious eyes, then these Institutes cry to be installed.

    Sri Lanka has had decades of ‘Administrative Reform’ ending only with bloated cadres, inflated compensation and slumbrous incumbents. Let the polity ban this term. Let it pluck up courage to demand that power should reside in the best charactered and most competent.

    With courage of conviction they should reject such falsified spine chilling propositions as sovereignty resides in the people, therefore power lies in parliament and by extension with members who conduit it to ministers who by definition can never err. What follows is the political dictum “You do not advise your political masters”. Jettison it.

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      Continuation

      Dr. Wijewardena

      Prime Minister Modi’s most challenging pronouncement at the elections was a
      $ 5 Trillion economy in 5 years. Realisable say the optimistic breed of economists, on condition the economy grows consistently from the present 6% to 8% if not more. The Chief Economic Advisor to the Government of India Dr. Krishnamurthy Subramanian too affirmed in a recent interview. In a similar vein the author has drawn reference in the Manifesto to raising GDP growth from 3% to 6.5%. What is baffling is HOW?

      When it comes to a nation’s economic growth, most economists speak the same language. For clarity I query, is it through the Hitlerite mode of mesmerizing the youth into patriotic fervour and then pummeling them into hard work? Or is it economist Erhard’s miraculous way?. But the world knows that Germans are a category apart. The author’s elucidation of the ramifications needed for a massive 2 to 4% GDP will be enlightening. How can ‘Soft States’ accomplish it? Invoking administrative excellence and technical support earlier was precisely for that.

      If I remember right, in mid-seventies Singapore’s Minister of Finance said “Forget all your economics. As Samuel Smiles said, what we need are thrift, perseverance and honesty”. These are what India and Sri Lanka need to hear most.

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    When cheaper goods come from a country India than growing in sri Lankan agricultural sector of Indian continues to put forward dominant supply such growth will transformation be depended to such country

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    If Gota and his government don’t respect the rule of law, which we will see in the near future, what is the chance of getting the economy right?

    Without the rule of law enforced impartially the masses would suffer economically, besides other things.

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    we all know that MR and co did a lot of damage to economy of this country. There is no doubt about it. and yet, Sinhalese love them and let them pay the price.

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    A U turn article before the elections and after the elections. You are like Victor Ivon (Ravaya Man).

    I have also read the Gota’s policy document and noted the matters mentioned by you.

    The short term strategies are already on the way. That is the establishment of the security, law and order. That will establish the social, political and economic enviornment and create a good enviornment for investors and tourists. But we have to wait and see the other mid term and long term strategies. But with his US work exposure, he will do something, wait and see.

    The problem is the traditional politicians who will work as Ministers. They are good to talk in stages but do not have the managerial and professional skills to implement the strategies. I will keep my fingers crossed. So far , so good.

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    I am no economist but the way I see it, SL’s economic growth will be severely restricted with the country having no industrial capability & largely dependent on meagre agricultural exports, (declining) tourism & remittances from Middle Eastern labour. Our trade deficit is widening with uncontrolled imports, as well as, our inability to service, particularly, the Chinese debts, obtained at commercial rates for white elephant projects. A failing state education system & questionable private higher education as an alternate, which is also subject to selfish political & trade union agenda (remember SAITM & the GMOA?), favours the rich who can educate their children abroad, all which does little to encourage future generations to meet the needs of the country.

    The fact that the elected President has failed to clear his name of allegations by the international community (which some delusional ‘patriots’ believe as western conspiracies) will not encourage much needed foreign investment & aid. Even tourists from developed countries will consider a country’s human rights record & treatment of its citizen when choosing a holiday destination. Tax cuts certainly are a relief for average citizens but will result in stealth & indirect taxation leading to higher inflation & cost of living eventually. Gotonomics should start with simple housekeeping, a smaller cabinet, abolishing of ‘not fit for purpose’ provincial councils & cutting down perks & privileges of politicians.

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    Economy works well when politics works well. politics will work well when there is peace and stability. Profit and income distribution are two major function of socio political economics. Srilanka’s government institutions are currently unprofitable over resourced (human) and underpaid sector. For example, Srilanka’s military expenditure takes a huge proportion of the economy and currently the Human Resources are under used which result in low economic growth. Will it possible to replace Human Resources with technology without affecting employment? Provincial councils are another institution that is ineffective and consuming a large sum of the Budget. Will it possible to get rid of it or reduce the numbers to make it efficient? The challenges and threats are huge and only the time will tell us the truth.

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    It is left to be seen if the man who worked for Seven Eleven in the US, can turn the economy of our country around. This is no convenience store.
    But don’t worry, the streets will be clean, and the Rajapaksa pockets full.

    Has anyone seen proof of his cancelled US citizenship, or is this going to be like Trump’s tax returns promised to be shown but never to be seen?

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    Central Bank governor has quit the job. This Pariah Demulu too have to pay the price in line with Mahendran. Cabal and GLP will be going after him with the direction of Royals. Probably the last Tamil goat on the altar for the Sinhala Buddhist Political opportunism to flourish. Here after Chinese will take it over. Americans open the Central Bank; let the Chinese to close it down.

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    I wonder how the annual inflation rate is a mere 5% or 6% in Sri Lanka. A simple observation of a basket of consumer goods and services will demonstrate that prices have been soaring at about 20% to 30% for many everyday items. Would the author care to explain these?

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      Probably imported item from China coming to Lanakwe cheaper. Importers from China amounts $4B. In 2013 Yuan was 10.75; now yuan is 10.20. China fixes its exchange rate to dump in lazy countries. So actual value of rupee is falling drastically, but China artificially kept not changing against rupee. Remember, Chinese loans are payable in dollar.

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    Gota seems to be eyeing on IT as one of the main sources to help him in his vision to move forward. Let me tell, our post graduated IT professionals are not even near the levels of students of developed nations. It is not solely because of infrastructure but the mindset & school/university education system. Even for IT professionals, it is hard to grasp new technology and be in par with the pace. And, they simply can’t think out of the box.

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    Just came across some interesting developments of Prez Nandsean’s Gotanomics which may appeal to Dr Wijewardana,.

    Dr Coomaraswami is throwing in the Towel..
    He gave the resignation apparently on the 2 , exactly 2 weeks before the Election.
    Did he see the writing on the Wall?.

    Dr Swamy I thought should be asked to reconsider his position
    .He seem a good guy. unlike his predecessor whom Dr Ranil hired.
    Dr Coomar seems to have a reasonable record too, handling big end Banking as well as Economic Development

    Prez Nandasen a is going to renegotiate the Hambantota Deal which Dr Ranil signed is desperation as compensation for insulting the great Chinese people.
    I am sure Nandasena will be heard in Beijing with compassion.

    Prez Nandasen says he will not allow Chinese or Hindians or anyone else for that matter, to have dominance .
    And it sounds good stuff..

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      Whatever is happening to the Central Bank fiasco. Did the country not loose billions. The author of this article completely ignores. Why?
      Will the lost billions be regained? Was this not a blow to the economy?

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      KASmaalam K.A. Sumanasekera

      “Dr Swamy I thought should be asked to reconsider his position..”

      He is a Colombo 7 able “Vellala” Tamil.
      The unwritten Mahawamsa bye laws of Sinhala/Buddhism bans employing Tamil speaking minorities from holding top state jobs. It is surprising Smartass patriots such as Chana Jayasumana, Windbag Weerawansa, Dinesh, …… tolerated him for the past few years.

      I suggest you recommend the Royal Astrologer Sumanadasa Tilak Abeygunawardena to the post of Governor of the Central Bank of Sri Lanka. Surely he should be able get all forecaste right. He will do a superb job.

      This morning my Elders told me that they expect Northern Provincial Council Governor is to be replaced by a donkey or a smartass patriot Governor Dr. Suren Raghavan was doing a good job and most people liked him. They also told me they expect a single handed General to replace in order destroy all the good work that Dr. Suren Raghavan has done in a short period of time. Why should the Northern Tamils have a much liked able person run the province whereas the other provinces get Gota’s cronies.

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    KASmaalam K.A. Sumanasekera

    During his first press conference when Gota the National Hangman was asked about the forced disappeared in the North until 2009 and beyond he sniggered and dismissed it by saying past was past and people should forget the past.

    If he was right, would he now ask the Chinese to forget all loans that his brother borrowed to accumulate his family fortunes, as they received the loans in the past.

    My friend owes his bank in unsettled loans although he borrowed it in the past.
    Can he now claim relief under Gota’s law?

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    ” Gotanomics will work if the same Central Government machinery is established in Sri Lanka.” Only to a SINHALA MODAYA will it work. what the f do you expect Dr. Wijewardene from a 7/11 toilet cleaner on macro economics. Oh I forgot, pardon me sir. he has appointed to worlds greatest finance minister, his brother the TSUNAMI HORRA that according to the former CJ SN Silva should have been sent to jail instead of being bailed by disappearing the criminal files on these buggers.

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    First and foremost the govenment should stick to President Goabhaya Rajapaks’s slogan “Wedakarana Ratak”. Indiscriminate commercialisation has turned our countrymen to work less and less and demand more and more. Consequently efficiency of both state as well as private sector has been reduced drastically. There is absolutely no supervision and accountaility in public institutions. We do not always need advanced technology to improve this sitiuation. Finger pointing is easy and we need to look at ourselves to see whether we have done our jobs well. Highly paid government executives too should come down from their comfortable offices to ensure efficiency of their institutions. It is not only high level corruption that has ruined our country ruined our country. Inefficiency is the biggest culprit.

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