27 September, 2021

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The Truth Behind The USD 6,361 Loans Of The Present Government

By Harsha de Silva

Dr. Harsha de Silva

Dr. Harsha de Silva

The accusation by the former President

Former President Mahinda Rajapaksa has been repeating ad nauseam over the last few weeks that the present government has taken USD 6,361 million in foreign loans in its fifteen-month lifespan thus far but hadn’t even built a culvert with that money.

He says that he could have built two Mattala airports, one Hambantota port, one Norochcholai coal power plant, one Colombo-Matara highway, one Colombo-Katunayake highway, not one, but two Colombo port cities and one 500 MW Sampur coal power plant with that money.

Finally, he says that the present government is incapable of running the country and that he should be given the opportunity once again to ‘rescue’ Sri Lanka.

The calculation of the USD 6,361 in loans

Mr Rajapaksa’s calculation of the USD 6,361 million the present government borrowed is as follows:

  1. Currency swap of USD 400 million in March 2015 and USD 1,100 million in May 2016. So in currency swaps, the total is USD 1,500 million.
  2. International Sovereign Bond of USD 650 million in May 2015 and another USD 1,500 million ISB in October 2015. So in ISBs, the total is USD 2,150.
  3. Sri Lanka Development Bonds totaling USD 2,711 during the tenor of the new government.

So, adding together all of the above Mr Rajapaksa comes up with the grand total of USD 6,361 million ‘debt’ that the present government got in to in the last fifteen or so months. Let us analyze them one by one.

Currency swaps

What is a currency swap? It is a swap; meaning an exchange. In a central bank currency swap two central banks exchange a particular currency with another with an agreement to unwind that swap at a given date at a given exchange rate and or a given interest rate.

India has such swap agreements with each SAARC country for up to USD 2,000 million on which they can draw if needed. In fact, during Mr Rajapaksa’s rule, in September 2014, Sri Lanka also entered in to a USD 1,600 million (or Yuan 10 billion) swap agreement with China.

While most of the time currencies are exchanged, sometimes they are not, but is structured as a short term loan to be paid back with interest. In the recent case of India, I understand it was the latter.

These short term exchanges are, for the most part, used to either tide over currency pressure or to directly settle bilateral trade transactions. And these take place all the time around the world.

As at present US, Canada, Euro Area, Switzerland, Japan, Australia, China, Australia, UK, India, Brazil, Singapore, Indonesia, Pakistan, Korea besides Sri Lanka and dozens of others have various swap agreements between and among them. They utilize them based on need.

Mr Rajapaksa attempts to portray that Sri Lanka got in to ‘debt’ with India to the tune of USD 1,500 million in currency swaps. The reality is quite different.

A USD 400 million swap was entered in to in April and unwound in October. Another USD 1,100 million swap was entered in to in to September 2015 and unwound in March 2016. This means the ‘short term loans’ were taken and already settled. The two central banks can at any time reenter in to swaps to be unwound at agreed upon dates as per the SAARC or any other specific currency swap agreement. I believe they have entered in to another USD 400 million short term swap recently to be unwound soon and is discussing another USD 700 million swap. These, as described are short term facilities that are cleared in a matter of months at the most (the USD 1,500 million referred to has already been settled) and not the kind of ‘debt’ as implied.

International Sovereign Bonds

Now, let us take the International Sovereign Bonds, or ISBs. Yes, the new government has issued 2,150 million in ISBs in 2015.

If one takes a cursory glance at the history of ISBs, it becomes clear that it was during Mr Rajapaksa’s time the ISB program was started. In fact, there is nothing wrong with ISBs if used for productive purposes, and in 2014 his government issued USD 1,500 in such bonds. But, as far as we know, by and large the proceeds were not used for the intended purposes but instead for general budgetary support.

In addition to the ISBs that year Mr Rajapaksa’s government used SriLankan Airlines and the National Savings Bank, among others, to issue international bonds for an additional USD 175 million and USD 250 million respectively bringing the total international bonds; both sovereign and corporate, to USD 1,925 million.

The year prior to that, in 2013, his government got NSB to issue USD 750 million in 5-year international bonds for the highest ever interest rate of 8.875 percent plus fees when the global 5 -year benchmark was only 1.3 percent. Some may recall that the then Chairman, who was brought in after the infamous transaction where NSB purchased shares of the bankrupt ‘The Finance Company’ for a hugely inflated amount, was replaced by a ‘yes person’ to proceed with the same as he was not willing to enter in to another disaster. For those interested, NSB purchased shares of TFC for LKR 49.50 while today the shares are trading at just LKR 3.25.

The unbiased reader will appreciate that it is not easy to make drastic adjustments to the current ISB program which has been set in motion many years ago; meaning to pay back the amount without rolling over. Nevertheless, the present government is doing its very best to bring the program to a manageable level, and utilize the proceeds for useful capital expenditure. The overall objective is to reduce the debt to equity ratio in projects by increasing foreign direct investments on public-private-partnership basis, among others.

The hidden loans

A point to note is that, as referred to earlier, Mr Rajapaksa used SriLankan and NSB as well as the Urban Development Authority, National Water Supply and Drainage Board, Road Development Authority among others to ‘hide’ the debt from the national debt figure so that he could argue that national debt to GDP was coming down.

The argument was that these state owned enterprises had strong balance sheets and could borrow and repay on their own. However, it is well known that none of these SOEs have the capability of paying back the massive loans they have taken and at the end of the day the treasury is called upon to make payment. The recent expose’ on the way SriLankan had borrowed and how it is becoming a unbearable burden on the government to service the loans is a clear example of how wrong the thinking was; or perhaps how arrogant the decision makers were with no concern about being responsible to society.

These ‘hidden loans’ are part of the USD 1 trillion that the Prime Minister has been speaking on recently for which a forensic audit is to be conducted to get accurate details.

Sri Lanka Development Bonds

Finally, let us take the case of Sri Lanka Development Bonds or SLDBs. I had argued many years ago that this was a misnomer; as SLDBs were never, or hardly ever used for development purposes. They were used to repay SLDBs, in particular, coming due; to rollover.

SLDBs are issued locally for those who can invest in USD denominated debt instruments and the tenor usually ranges from a few months to a few years. They are typically taken up by local banks and other eligible parties to receive tax free interest income.

Yes, SLDBs worth USD 2,491 million had been issued in 2015 to roll over loans taken in the past for the most part and some additional funding. Total outstanding SLDBs stood at USD 2,984 as at end of 2014. A total of USD 2,084 million is due in 2016 and at least that amount would have to be issued to roll them over unless other funds are found.

Project costs and project loans

Now, let us turn to the costs that Mr Rajapaksa has provided for some of the large white elephant projects that were started during his period. The objective here is not to discuss whether the costs were competitive or whether they were inflated, but to show the amounts shown and the actuals spent are vastly different and that they were funded by project loans.

For instance, he says the Magampura Mahinda Rajapaksa Port cost USD 426 million to construct, but the actual cost thus far has been over USD 1,300 million and it is not yet complete. This figure is without the associated costs including USD 130 million on oil storage tanks that have never been used.

In fact, almost all of the funds that were utilized to build these infrastructure projects came from project specific loans be it from China or elsewhere. This includes the rest of the projects in his list; Mahinda Rajapaksa International Airport in Mattala included.

So, even though Mr Rajapaksa attempts to make it seem that the various loans that were taken by the present government could have been used to build infrastructure, including culverts, the facts are totally opposite to that.

Government owned infrastructure is built using long term project loans unless governments have surpluses or are public private partnerships. No infrastructure has ever been built using swap agreements anywhere in the world and short tenor ISBs are not suited for assets that take a fairly long time to start generating revenue. As mentioned earlier, SLDB is a misnomer and is not suited for development projects.

For example, the first USD 306 million for the MMRP was from China EXIM Bank, originally agreed upon at LIBOR + 0.90 percent, or todays rate of 1.78 percent but subsequently changed to fixed rate of 6.30 percent on a cabinet paper presented by Mr Rajapaksa himself; the next USD 140 million again from the same bank including the USD 45 million to blast a ‘rock’ that created much discussion and a further USD 808 million also from China EXIM Bank for Phase II. The Phase I loan, signed in 2007, has a 15-year tenor with a 4-year grace. This is already 2016.

Of the USD 130 million spent for the unused oil tanks at the port USD 76.5 was also a loan from the same bank while the rest came from local banks.

MRIA was also similar. The original cost was USD 208 million funded by China EXIM Bank and a further USD 100 million for improvements later and some USD 40 million for oil storage facility; in excess of the said USD 190 million and from sources not divulged by him but in fact from project loans.

So, it is clear that the money for the seaport and airport named after Mr Rajapaksa was funded by a series of project specific loans and not by the ISBs, swaps, or SLDBs. This was the case with respect to all other developments in Hambantota; be it expressway-like roads, railways, overpasses, huge cricket stadium, tele-village etc.

Repaying project loans

Before a project is financed thorough assessments are carried out to determine if the project to be undertaken will have revenue streams to repay the loan. In the case of the huge loans taken for the infrastructure that bears Mr Rajapaksa’s name, the question is, if feasibility studies were done? In fact, the details available at the Department of National Planning indicates no proper feasibility studies were ever conducted on any of the projects that have now become ‘white elephants’.

So, in such situations the government has no choice but to borrow in the international markets using various types of instruments to make payments that are becoming due.

In 2011 Mr Rajapaksa said that USD 650 million investments by foreign investors at the first stage of the port had “strengthened the confidence of global industrial and commercial giants regarding the success of this innovative project in southern Sri Lanka.”

The country was told that 27 investment proposals had been received and the Cabinet had approved seven of them. They were a sugar refinery plant, a cement grinding and bagging plant, a fertilizer plant, a petro-chemical plant and three warehouse complexes.

His top port expert, the then chairman of the nation’s port authority boasted that “effective intervention of President Mahinda Rajapaksa to lure the international community to commence business in sustainably peaceful environs in the country has brought about the dawn of an era of prosperity for all Sri Lankans” and that at the second stage of the investment, 11 more investors were to arrive with investments of USD 1.15 billion, which would increase the total investment at the port to USD 1.8 billion by 2013.

The unfortunate truth is none of that has happened and the meagre income from the seaport itself is based on the roll-on roll-off business created through a combination of deep discounts and effective banning of unloading vehicles at Colombo. The airport has no regular income.

Therefore, as mentioned earlier, the present government has no option but to obtain dollar funds from further borrowings to repay the high cost loan payments coming due now.

The truth behind the use of proceeds of loans

What I wished to clarify from this short explanation is that the story that is being spread; that the present government is taking huge loans but are not utilizing the same for any productive purpose is totally inaccurate. The truth is that the loans taken on project basis to build most of the infrastructure cannot be serviced as the infrastructure is un or under-utilized and has hardly any revenue forcing the treasury to make payments on the due dates by finding money from other sources.

Therefore, the ‘story’ that the present government is so inept that it is just borrowing large amounts without using the funds for any productive purposes, even to build a culvert, has been carefully crafted to mislead the people. So, whoever fabricated it did so fully aware of the fact that he or she was doing so purely to deceive the people of Sri Lanka for cheap political advantage.

Can we go on like this?

For how long can we as a country continue this way? Not for long. Sri Lanka must find a way to earn its own dollars to, at the very least, repay the principal and interest payments that are falling due on the gigantic loans taken by Mr Rajapaksa for projects that bear his name but have no revenue streams.

The government must reverse the direction of Sri Lanka’s exports to GDP ratio. It must export a lot more than it is doing now. Particularly with the stagnant remittances from the middle east, which could start to decline, sent by the million or so workers who suffer untold misery to do so, the challenge becomes even tougher.

A fact that is stubborn but is very revealing is that during Mr Rajapaksa’s regime exports to GDP ratio fell from 34 percent to 14.5 percent. Just this figure will help the unbiased reader understand the present government’s predicament. It inherited an economy that was in massive difficulty on the external front but window dressed by certain creative accountants to deceive the people.

Way forward is to integrate Sri Lanka with the rest of the world

In my role as the Deputy Minister of Foreign Affairs I am doing my best to push the agenda of economic diplomacy forward so that we can change directions of the exports to GDP ratio. To export more we need to bring in those who can invest in Hambantota and other areas of Sri Lanka.

To get FDI the investors need to see a potential export market. Given ours is a small 20 million lower middle income economy it is imperative we expand our reach to the region. We must be able to tap in to the emerging South Asian middle class in India, Pakistan and Bangladesh as well as in Central Europe. From the early days it was during the times that we as a nation was integrated with the world that we prospered.

The challenge for us is to once again make Sri Lanka a hub. This time the hub of the ‘Asian oceans’, like the Prime Minister has already said. There are many who are attempting to derail this government’s economic plan by blocking the initiatives to integrate Sri Lanka with the rest of the world. But I am convinced this government will succeed in this endeavor.

*Harsha de Silva, MP, Deputy Minister of Foreign Affairs

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Latest comments

  • 45
    17

    Who needs MR with replacements like this?

    When I saw the length of this article I immediately recognized it for what it is. Dragging a large whale to hide things. Much more effective than the red herring. Who has the time to read such lengthy explanations? I don’t. Who has the intelligence to understand it?. I don’t. And many of the Punch Singhos are like me. Simply Punch Singhos.

    Even if you go through the whole thing with patience and care, the end conclusion is: “This is all the fault of MR.” Not a great discovery, is it? Nothing to run around naked like Archimedes.

    By experience we know that in Sri Lanka, one of the major tasks of any new government is to clean up the mess created by the previous government. It takes all their time, resources and manpower to do that. Hence the increase in the number of Ministers, deputies and their staff. Hence the taxes and the other additional burdens so conveniently put on us to mobilize the financial resources needed.

    We know all this. There is no need to remind us. Don’t waste time in explanations. JUST DO IT.

    • 27
      11

      agree 100% – another big disappointment of Yahapalana regime… whats the use of education if used to con people

      • 6
        0

        Dr. Harsha: Time for Yahapalanaya Sira-Ranil Govt. to deliver or GET OUT!

        If Mahinda Jarapassa borrowed and spent so much and committed so much financial fraud – why is he and his corrupt family NOT in Jail today?

        Who is protecting Jarapassa, his family and looted funds in hidden overseas bank accounts? The IMF and World Bank that have legalized financial corruption in the international system so that the Western world can get rich on the looted wealth of the leaders of third world contries?!

    • 11
      3

      I think lankens in general are not used to listen to truths. Be this in terms of Rajakashe maraud culture or anythign else is the same. Their nature is to just to hear only positive things. And they do loose their memories within few hours… some just work for rice packets only.. I respect this genetleman to have taken time to write this article. These young men do anything and everything being that energetic since they have been appointed to the ministries.
      Over the past few months – no nothing much about the current investigations on the depth of the loans taken by idiots of former regime were clear to press. Or press keep them for them, being biased to Rajaakahse Regime and or may well be being scared RAJAKASHE underground net works that are still in power in some areas. That were also covered thinking that it should be if the national kind o fgovt moves forward. But there the damage being done to the goodies are that much…Now little by little, the current regime has to surface them – since they have continuously been attacked by JO men that see no future in this country if FCID led investigaitons would be continued.

    • 14
      2

      Harsha, really credit us with some sense!

      The bi-partisan, or UNP-SLFP cross party nature of corruption in Sri lanka is clear from the case of the Central Bank.

      The CB was and is headed by 2 corrupt and unqualified stooges of the current and former regimes. Ajith Nivard Cabraal manipulated currency and made big bucks for himself while causing losses for the general public, and wasted public monies on the Commonwealth Games in Hambantota bid and has not yet been charged.

      The corrupt Clown Arjuna Mahendran, current head of CB is a clear cut case of insider trading with his son-in -law. Both these individuals need to be investigated and their assets ceased to pay of part of the national debt.

      Neither of these, Cabraal or Mahendran have the necessary qualifications to be CB head-advanced degrees PhD in economics, and while the Institute for Policy studies has many highly qualified economists they have been overlooked and Ranil has appointed his corrupt pal. 2 fools and Crooks are running the crashing Lankan economy today – Ravi K and Mahendran.

      It is increasingly apparent that The Ranil Wickramasinghe- Sirisena government are utterly corrupt and irresponsible – almost as bad as Jarapassa family regime. They, and you Harsha, are simply borrowing and spending including from IMF – the lender of last resorts, which has legalized financial corruption, TRICKLE UP and global INEQUALITY, and should be shut down.

      IMF conditionalities should first require holding the corrupt accountable and tracing all the looted funds stored in overseas banks and good governance, to pay of debt, rather than asking for cut backs on welfare and social spending and taxing the poor. But this never happens.

      Sira- Ranil Govt also borrowing via Currency swaps with China and India to keep the Parliament of Morons Circus in clover and further MAGNIFYING THE NATIONAL DEBT ten fold.

      The pay off for these loans/ currency swaps from China and India are White Elephant Environmental and Financial DISASTER causing projects like the China Colombo Port City and the Sampur Coal plant. It is the poor people of Sri Lanka that will have to suffer due to the resulting financial and environmental crises..

      The JVP and Civil Society must soon take to the streets to protest the dirty Ranil-Sira Govt. which is tangoing with Jarapassa rather than sending him to prison and disbanding the 100 plus Cabinet of Clowns.

    • 6
      3

      Yes Harsha de Silva
      You need not answer to Jarapassa’s idiosyncrasy.

      Everyone knows he will keep on barking through his Orifises until his last breath ,
      so get on with the job you have been ordered to do by the GG and turn the country around to a better respectable country , not the country known as Pariah state.

      By the way your boring article was it in response to Jarapassa ‘s Chorus ?? who would not have been able understand the head or tail of what you have tried to explain in length.

    • 5
      0

      If you cant read , if you cant understand then your are not capable of writing an honest opinion. So then why did you comment? Are you an imbecile or are you being paid by the scoundrel to do his dirty work? I think the real answer is the later. Paid to hoodwink just like I predicted in my previous post. Only mindless morons or paid hacks will fail to grasp the truth of this article. Credit swaps are temporary and already repaid. MR added them all up like the shrewd bas– he is. Project loans however, he chose not to add up but used the initial loan only. Also left out were the deliberate borrowings channeled thru the state banks, other loss making state institutions. These banks may end up insolvent some day unless the treasury bails them out same goes for the SOEs.

    • 2
      0

      Current problem prevailing in the country is solely on the press.

      Even if the regime was made – nothing changed drastically interms of press men and their biasedness and previous structure regardless of the size of the institutions.

      More good moves have been made by the current regime. They have become exemplary in many areas, but press men seem to paint the picture – yet in favour of previous Regime and their men.

      I still wait those Mawbima, Derana or the like to directly interview Mahinda Rajakashes, Gotabaya Rajapakshe and all other men close to them with peoples unanswered questions (long standing)

      If journos would bring an analysis based on the topics, things could change in the hearts and minds of poor folks easily.
      That will not take long if the press men did the job properly.
      Lanken press prevailing in the country are BEYOND all bearing.

  • 23
    30

    mr volkswagon, you are the king of yamapalana lies…people are tired of listening your lies. bottom line id you yamapalakayas are extremely inefficient bunch of goons.

    • 6
      5

      Hey Balloh, .. then we can all ask you where had your investments been … from the Harbor, Mattala ?

      Can you add your thoughts please ?

      No, they just bult them to hype up above the Bandaranayakes or Senanayakes… there the stupid manner being in higher positons never thoguth twice, what sums are being abused .. on whose costs ? Today, being unable to face it .. even if you guys do the service this ways, Rajaakshes are simialr to the fiece dogs being defeated make every effort to hide their tail behind the legs. Just to show up.. they guys go to every corner where Sanga community and prison communities are there.

      • 2
        1

        samuel, seems like a yamapalana voter who is trying to justify his vote. people who voted for yamapalane should be cursed too…whole country is cursed because of yamapalane…inefficient goons

        • 0
          1

          I am justice seeker never voted for any leaders.

          But I always stood by the side of right thinking ones. You the guys with brains filled with goo will never see it right, which even 10 year old would notice easily.
          Meeharaka Rajakashe has now been on a challenge telling the world that what he is saying is right interms of debt settling program of the current govt.

          Meeharaka left all the extrements regardless where he was, now the Good governance rulers have to clean them up. That is the situation facing the people today.
          Meeharaka never thought, Dr. Silva or other experts loudly expressed the consequences that a country would face in the future, if loans would be taken wihout limit. He is no Royal astrolodger, but had predicted them years ago. Go and check the hanzard achives.

          Even good educated Alevel Passers could see it right the way Japakshe et al moved was out of all the standards. Today, the very same cesspit holder to drop down all lies based on his former lies are not compliant with facts and findings of the current regime.
          The rulers keep quiet and have to be quiet since the govt is made of two grand parties regardless of the basic differrences. SLFP men in senior position cant digest the situation either, but they dont have any other choice if to be collective for keeping the party intact rather than anything else. If party would be strong and intact, only they could ever be able to contest in the future, else, the party will have to face all kind of setbacks going beyond all levels in the past. That is why experts call it ” President is caught by devil with the situation facing the party”.

          Rajapakshe being unable to bear the defeat yet, he merigo rounds telling a lie continously fooling the village folks. Any vulnerable folks that thought Rajaakshes were magical, easily believe what Rajaakshe says, since that is the way they have long been familiar with. They were made to believe so during the last decade – that was the deliberative acts of Rajaakshe Media men. Even today, Mawbima, Derana or the like news media propaganda dont seem to contain neutral news … nor they write impartically – being unbiased to Rajapakshes for some reason, may be they still believe that Raja was the person to have liberated the nation from fierce war…. all experts at the Universities too stay mum not knowing their responsiblities to correct the nation by givin them good kind of examples from other countries.
          Lately, Sarath Fonseka held a speech in parliament, telling pieces of all the truth how the credit is being shared by any kind of victory, there he questioned, if a cricket team was won, the credit would loudly be not GIVEN to minister of sports for the guide, but the captain of the cricket team. SO is the soccer victories Europeans leaques celebrate across europe. Me being on a country where foot ball games are above any other issues, I feel, SF is 100000000000000000000000000000000000% right. But in Srilanka only – a group of mad men made every effort to grab the credit from the team captain who was former army commander real war hero of the army Sarath fonseka. All in all, these people will oneday learn have to accept this. But thein the wagon is gone. I thought pakistanies in general are the regional fools, buto day, looking at the way lankens (predomninant rural folksacross the countr)beahve, I feel there are the inborn stupid men of the earth. This seems to be more connected with their genes rather than anything else. They appear to be intelligenert, highly literate but when it goes to vote for the goodies, they behave as if kindgarten little ones would do. That is how all the maraude groups had been given the chance to get elected as people s representatives in the parliament, regional bodies tdoay.

          • 1
            1

            thanks for eating up the space with your dung

            • 0
              0

              Help yourself mate. It is free. There will be some dessert too.

  • 22
    5

    This is the type of politicians we need to inform the public of the actual situation. As a former mercantile executive I will tell the Ministers concerned to make it compulsory for all the construction companies to divulge to the treasury all Locally Bank Funded projects that were undertaken by them together with their values. This exercise will reveal the full liability hidden by the previous Government.

  • 26
    14

    Blah.. blah.. blah.. and the rupee falls to 148 today…We are just plain fed up with you guys..and your fancy stories!! Your incompetence is crystal clear!

  • 14
    2

    This is the best approach. You treat people you serve with respect showing where/how their hard earned wealth is being used.

    Now, you folks have the mindset at the correct place. However, execution needs more tuning.

    The RTI legislation draft has taken away transparency of the Central Bank. That should not be the case.

    See here.
    https://www.colombotelegraph.com/index.php/rti-bill-a-defeat-of-public-aspirations-for-transparency-in-the-central-bank/
    The Central bank affairs including its internal workings must be fully transparent. Its like that in India. Why are you folks trying to hide it?

  • 12
    12

    Thank you sir for setting the record straight. The diabolical cunning of Mahinda Rajapakshe and his minions should make any hard working citizen’s blood boil. Bur sadly there are plenty of like minded scoundrels who will come on this forum and rubbish this reply and justify the diabolical lies uttered by MR and his gang of thieves. By the way what happened to Priyath Bandu. He is a big time crook who belongs in jail along with the rest of them.

  • 21
    1

    Dear Dr Harsha,

    When we voted for a change, we placed a lot of trust on forward thinking economists like yourself and The honorary Prime Minister to drive this country out of an economic dark time to a brighter future for all Sri Lankans. We all realized at that time the damage that was done when you took over and the problems that needed solving. While your ideology seems legit, your execution is horrendous. Why do we see time and time again that liberal parties while they have the best intention, lose the confidence of the masses so quickly? You don’t need to preach with long comprehensive reports on what has happened since you took over or tell us over and over again about the issues that you inherited from the previous government. All we want to see is a realistic step in the right direction. While we are feeling more free to condemn the acts of politicians now than before doesn’t matter. The direction should be just. You can’t lose the media and hope to make change. The masses don’t understand that a parliament is divided and that’s one of the reasons why nothing gets done in Sri Lanka. We have given you a timeframe to prove once and for all that there is a glimmer of hope for Sri Lankans economically. Bad news travels faster than good, this is with reference to a few issues that haven’t been laid to rest. “The bond scam”, when will get down to the truth behind this? The private limited companies both old and new getting burdened with a new tax. Kinda counter productive to enterprising young businesses, right? The haphazard budget with so many changes to VAT. The newly approved “extra vehicle” for parliamentarians. You don’t burden the nation and then ridicule them with things like this. We need change. You need to foster a strong leadership to push forward with development and work towards easing the livelihood of all Sri Lankans. Remember the responsibilities of a politician, stand straight and do the right thing. All Sri Lankans will salute you for this.

    • 13
      14

      Don’t have too much hope on Dr Harsha. He is not focusing on Economy, he is there to make money and have a good time. He enjoys as the deputy Foreign Minister as well to have good time at the expense of poor people. Sri Lankan economy is in a disaster, why he needs a second position? Seriously, think about it; you will understand the crooks, and won’t have too much hope on them.

      • 11
        10

        This is absolutely wrong.

        I know him personally, He is not into money making. He will never be corrupted even if we put all the guys in one bin and label that politicians make their businesses.
        Guy is bit upset that not being able to do the maximum using his brain, but they will make External affairs acceptable now on.. no doubt about that. for sure.

        • 4
          1

          Deekirata Balalluth Sakki, For curd even cats will come forward as witnesses.

        • 6
          1

          Are you saying that a South Asian politician is not into making money? By the way how much you got paid to write this BS? Are they going to make External Affairs acceptable? May be according to your standard. Can you please ask him to resign from External Affairs to focus on the economy. Fixing the economy is far important than having good time with the external affairs.

    • 7
      4

      “You need to foster a strong leadership to push forward with development and work towards easing the livelihood of all Sri Lankans.”

      I thought we had this.. until January 8 2015

  • 6
    2

    Very descriptive article, I wonder whether Dr. de Silva or any of the readers can enlighten at what interest rate the ISB was issued in February (?) 2015 and what the benchmark interest rate was at that date..thanks

  • 5
    1

    Why aren’t the embezzlers locked up?

  • 11
    5

    I think Dr de Silva has a duty to respond to Mahinda Rajapakse’s (written by GPL) lies and he has done rightly. MR & Co not only destroyed the economy but also recovery of the Nation. He continues to destroy the economy through various means and there is an urgent need to expose him publicly.

  • 9
    6

    MR is a liar. What is crime is that he wasted public funds. He unprofessionally invested money to seek glory. He expects people to remember him. Of course they will remember as a sociopath who plundered the wealth of the people.His family wouldn’t mind the shame.

    The disease is that the president and ministers are vested with this kind of power. That is to unwisely invest in non profitable non productive ventures. Today Daya Gamage is expressing his opinion that MP’s deserve a raise in allowances. His judgement is good for his business. Not for the country. The parliament has become a white elephant to the people. Wastage of funds begins from the parliament. Intelligent people do not care of MR or JO the mad jokers. What matters is how the controls are going to be applied in the parliament in stopping the waste. Either President or PM taking over the controls is not a solution. As long as controls and compromises are not applied, then all the explanations are just time wasting.

  • 9
    0

    Thanks Harsha for the attempt. I respect your right to do so.
    The problem with this article is 99% of it is wasted to explain what we already knew. MRIA etc. are “White Elephants” and there is not much information value in whatever is written here.
    Since now you are in the driving seat, what people expect from you is a solution. This article spends just three paragraphs on the way forward. What I would love to see is more paragraphs on the way forward. Be honest…
    1) The public service must be trimmed.
    2) Free health and education must be trimmed.
    3) Taxes must be raised.
    4) New taxes must be introduced.

    These are hugely unpopular moves. However, these will raise the government revenue. Otherwise we will be facing serious economic crisis.

    • 5
      1

      Nuwan,

      Also, loosing state enterprises must be pruned/converted/transformed.

      Harsha’s explanation is informative to unbiased readers.

  • 5
    2

    Dr Harsha, we expected little better from you since you are a US graduate. But I am disappointed to see what happens when even educated guys get into dirty politics.
    Now some points;
    1.You do accept swap worth USD 400M & again USD 1,100 million is a debt but only short term, but still a debt/borrowing.
    2.you do accept Int. Sovereign bond loan of UAD 2,150 Million. Again it is a long term loan.
    3.You also accept USD 2,491 million Sri Lanka Dev Bonds obtained in 2015 by your government. Again that is a long term debt.

    So MR seems correct. Pardon me for my language, may I ask what the Fuc*
    you all have done to this money? Only for Mahinda bashing. Comon manbe little bit more logical.

  • 4
    2

    To remind MR or his Writer, please see “Chinese Loans to Sri Lanka (Sunday Times 2-6-13)”

    “Much of the money borrowed from China goes back into the Chinese economy. Chinese companies are doing the contract work with Chinese labour. Sri Lanka has spent a massive Rs. 391.7 billion on investment projects in the country in the last four years. This money has been allocated for five projects, of which only three have been completed but are still to serve any real purpose.

    All of these projects have been undertaken by Chinese firms, and have been funded by loans obtained from the Exim Bank. Many of these loans have been taken with interest rates for long term borrowing (20 years) varying from 3% to 6%, and short-term loans at an interest of 2%.

    Construction of the Hambantota port was undertaken by the China Harbour Engineering Company at a cost of Rs. 149.2 billion. The contract to reclaim the sea and build the port city adjoining the Colombo South port was awarded to the same company at a cost of Rs. 85.4 billion; the Mattala airport project cost Rs. 22.7 billion.

    All of these projects were carried out by China Harbour Engineering Company and have been funded by the Exim Bank at interest rates between 3% and 6%; the Chinese have also provided the labour force; the Norochcholai power plant was undertaken by China Machinery Engineering Corporation at a cost of more than Rs. 51.2 billion; the Southern Expressway (connecting Colombo to Galle) was also handled by the China Harbour Engineering Company at a cost Rs. 68.3 billion; the Nelum Pokuna theatre in Colombo provided Sri Lanka with its first state-of-the-art concert hall at a cost of Rs. 3.08 billion — only 60% of the loan was financed as a grant by the Chinese government.

    Sri Lanka is now embarking on a project to construct the largest tower in Asia (down D.R. Wijewardene Mawatha in Colombo at a cost of Rs. 11.9 billion. The construction will be carried out by China National Electronics Import and Export Corporation and Aerospace Long-March International Trade Col. Ltd.

    The total commitment made by China from 2007 to 2011 was US$ 2.13 billion. Of this amount US$ 2.1 billion came as loans and US$ 24 million as grants.

    In the months to come, China’s Exim Bank will provide a loan of $278.2 million to Sri Lanka to help lay a 27 km single-line rail track connecting Hambantota and Matara; the Chinese government is giving US$ 240 million in loans to build infrastructure in southern Sri Lanka; China’s Exim Bank is financing the construction of flyovers and roads in the southern town of Hambantota with the aim of making it a transport hub; Sinohydro Corporation was given the construction of the Moragahakanda Project, which is the second largest tank ever built in Sri Lanka, at a total cost of US$ 382 million.

    In the absence of the Right to Information Law that exists in more 100 countries around the world, but not in China or Sri Lanka, how these loans are expended, how much goes as commissions to individuals who farm out the contracts and how much to political party coffers, and how much is wasted is never known. And, these are loans that future generations will have to pay off.

    The other issue is how wise it is to put all the country’s eggs into one basket and how indebted the country will be to one country, mindful that Sri Lanka’s geographical importance in the scheme of world affairs is not to be downplayed. But that is another issue.

    That the Chinese have a geo-political strategic interest in the waters around Sri Lanka is only too well known. If all these projects are for the wellbeing of future generations, well and good, but serious questions have arisen over the prudence and feasibility of some showpiece projects executed with these Chinese loans.

    One of the painful but beneficial aspects of World Bank/IMF loans was that there was a certain amount of fiscal discipline attached to them. Recipient nations, like Sri Lanka, had to work hard and show results to secure the loans. In so far as the Chinese loans are concerned, there seems to be a carte blanche or virtual blank cheque. It is almost as if while the Washington-based banks compromise the present for a better future; the Beijing bank works on the reverse theory.”

  • 3
    3

    Better late than never. This is the “Economic Analysis” and the “State of the Economy” that we wanted to know right from the beginning of this new Government that come to power after August 17, 2015. The Prime Minister was in a mighty hurry to make that “Statement” just before the Budget and even in the Budget this “Preamble” was missing. That gave the grand “Opportunity” to Rajapakse to roam around the country accompanied by a set of rogues spreading all the falsehood and hoodwink the masses. Now it is a “Damage Control” exercise the Government has undertaken. In addition to this request from the Authorities in my comments, I asked that a “Through Internal Audit” be made to ascertain the “Input/Output” of all those huge “Loans” that the previous Government has taken pledging the tax payers money. But, now I am at least happy that the Minister of Finance has undertaken to do “Forensic Audit” into some missing 200 files relating to the so called “investments Loans” that Rajapakse has taken. It is not that a simple, but has to be done. The Officers who handled these “Projects” with such loans are among the living, e.g. the Chairman of the Road Development Authority; The Chairman of the Ports Authority etc. etc. Ask them to submit their reports on a given time frame and make them “Answerable” and “Accountable”. Anyway something is being done even at this late stage.

    I again blame the previous Opposition for not being “Involved” in the Administration of the Governmental Affairs of the country. The then Leader of the Opposition should have formed a “Shadow Cabinet” to monitor all these subjects and by the time the Opposition becomes the Governing party, they are ready with the “Fact and Figures” to be laid before the public. That failure has resulted in us to cry over spilt milk. But the then Leader of the Opposition’s hands were full with the settlement of his own party’s internal problems than to get meaningfully and constructively involved in the country’s affairs. This, I consider to be a perennial problem with all other “Official Oppositions” we had so far. But this should change and it is a challenge to the present “Official Opposition” too, including that so called “Joint Opposition”. Just listen to the Parliamentary Debates that I going on; those are nothing but “slinging mud” sessions at each other. Practically nothing to LEARN or CORRECT a situation.

    Now that the “Situation Report” as regards these Loans are out, let us see how that would be debated and solutions are found. What type of “Participation” the Legislators are offering to solve to avoid an “Insolvent” situation for the country. It is also my wish, if the readers of these “Social Media” too get involved and offer solutions, not shaded by political differences; but as patriots, because it is a serious situation that the country has been put into.

  • 4
    3

    I think Dr Harsha’s explanation is correct and hope things will get better. I don’t understand what he is trying to say other than refute MR’s accusations. Also he is in charge of Foreign Affairs and this should be answered by RK or RW. RW did reply in some fashion but RK is silent and is simply heaping us with more and more taxes. Doesn’t appear to have a plan in place.

    But then we want solutions. Things appear to be on a better keel with less corruption. But not entirely when we see the number of Ministers and the ‘Baila’ they are performing. Of course better than MR, Gammanpilla, Werawansa, Vasudeva and crowd. We don’t have much of a choice.

    However not exactly what we expected from Yahapalana. Therefore please act in a sensible manner and press charges against the previous rogues and murderers without delay. Also MS and RW should crack the whip and get these animals to perform. Disce Aut Discede.

  • 2
    0

    We professionals are yet to get a convincing response from Economists on the best economic model that worked well for the country since independence. We do not need lengthy articles but a brief note would do with a table containing models and strategies recommended by “Economists”, strategies adopted by “Politicians” and outcomes.

    People punish politicians for failures but Economists escape and reappear to preach. The best case is ETCA. The same Economists, who advised the government in 1998 are advising the government in 2015 on benefits of liberalization of trade in goods and services through FTAs.

    • 2
      1

      100% agree, they come with magic formulas to make a quick buck and disappear in to universities back again!
      In 2007 US financial crisis, Economists who supported/lobbied/advocated deregulation of financial market during Clinton era, has to answer lot!

  • 2
    0

    Deputy minister of foreign affairs answering questions that should be answered by finance minister! Hilarious! I do not know whether finance minister has any idea what a currency swap is.
    The bottom line is you borrow to do development, Every government has to do that,

    When the country is suffering it is not just the citizens, parliament must weigh in too, Surely they can use existing vehicles without issuing new vehicle permits to import more! Where is the money for that?

    The problem started by the uncertainty and the break of the momentum we had under previous government!

  • 4
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    Can you remember once Ranil threatened that they will not honor the loans obtained by Mahinda government!
    He should try to put that into practice now!
    Can he at least remember that!

  • 3
    2

    What I wanted to say has already been said at length, so I will just reiterate in a nutshell;

    MR is going around blackballing the Govt to the masses, saying they have borrowed 6317 billion and have not even constructed a culvert implying that there is corruption of the highest order in this Govt. So if this Govt remains silent ,then it will appear that his accusations are correct.
    Somebody within the ruling party therefore must correct these damning accusations,if there is to be clarity. Also, the explanation therefore has to be in minute detail and no loop hole must be left for counter accusations, otherwise MR will shout louder and claim that the statement is cooked up.
    I think Harsha’s intentions in giving this lengthy statement was merely to COUNTER the vitriolic comments made by MR whose one intention was to mislead the masses, and NOT to specify to the public on the problems they have inherited.

    The 6317 billions taken as a loan by this Govt was in an effort to settle the financial problems that they were left with by the MR regime,and which Harsha has gone to great pains to explain, and which MR is now trying to turn to his advantage by saying that they had taken such a vast loan and have “not even built a culvert” What a Man !!

    • 2
      3

      MR is acting for the Gallery of his cronies and them alone.
      Only those tail ends will be praising for their loser Master’ s words .

      There’s no,place in politics for him and his family.

  • 1
    0

    Dr. Harsha,

    Rajapakse regime did economy a mess. I agree. Do we do the same now? If we do, then the difference is that still we can put the blame on previous regime for present mistakes. Obviously, this is not the way forward in economic governance.

    As far as I know the economic governance is a technical job. This is where the previous regime had failed and this is where the new regime has been failing. If you want a single parameter to understand my point I would ask you to look at the instability of the rupee. If the rupee is depreciated more than what the monetary authorities had expected, then that shows the incompetence of the present government and not the incompetence of previous one. Now, do not argue that other countries in the region and elsewhere have depreciated. Instead, try to understand my point, so that you can do something positive.

    In fact most of the foreign borrowings including borrowing over Indian swap have nothing to with Rajapakse borrowings but has something to do in stabilizing the rupee. By now the government understood it, but again the new reasoning is another mistake. The new reasoning is that according to Prime Minister the Keynesian style stimulus in increasing salaries etc. in order to increase total demand was an error. This he said recently in parliament. Increasing salaries is not the problem instead the relief measures were not supported by the structural macroeconomic adjustments. These errors cannot be rectified by economic diplomacy and by increasing FDIs. Instead economic diplomacy and increasing FDIs would be facilitated by prudent monetary and macroeconomic policy adaptation. That is why I say that the economic governance is a technical job.

    Hema

  • 0
    0

    Every time When a new government comes, they say treasury is empty and blames the previous regime. We heard this crap many times and I am sick off it. These guys don’t accept their mistakes.

    Didn’t you guys promise lots of goodies to the people just to come to the power, such as pay increases, tax cuts, reduction in prices etc. You never told us how you are going to pay for those items right? This is one of the key reason that you have to borrow money, of course one can blame MR too. Now you are going backward and increasing taxes and taking the concessions out of those goodies. You have to do these increases to meet the IMF guidelines to get the loan. We had one of the worse budget in the history of Sri Lanka, how many times the budget was changed. No backbone to come with a budget to fix the economic problems facing our nation. Politicians, we are no idiots, either UNP or SLFP or anybody else doesn’t matter, you are running our beautiful nation.

  • 0
    0

    Harsha, Facts in a table please. Next time..

  • 0
    0

    Harsha preaches to the choir about well-known Rajapakse excesses while his own cabinet colleagues are making the case for Gota to be brought back into government.

    When will this humbug end?

  • 0
    0

    There are many things explaining why the Yahapalanaya Government could not perform.
    1. All aspects are looked through a political prism. Actions are taken depending on the milk-able political mileage of the issues. Their safety of the income and political future is the primary concern. Two ball and Chains (income and politics) are holding the both legs of the Yahapalanaya Government from setting up any constructive policy and move forward. Foregoing pointless lengthy explanation is only to win a political fight. It lacks strategy. I am still not clear if Yahapalanaya Government has a plan to put forward to the financial problems of the country. Wijeyadasa is howling for the right of reply for the renunciate monks. Common people voted for the relief from their pains are waiting for ever. But ministers’ talk and actions are on their current positions and income, and about the coming election. They are competing with Hyde Pak show,) which was put their for the purpose of election winning) and putting up another the show to brag about it.

    2. Very incompetent gang of century beating team in the cabinet is making it as only a hiwar karas’ get together, rather than a governing body of the country.

    3. Destructive obstinate efforts to fool the IC and obstructing the flow of justice into the country are putting a halt on the possible help from IC for the financial problems. Last February (2015), the government said they will have the EU’s GSP+ restored. But so far even one small change in implementation Human right and International Humanitarian laws, still making the IC to study the situation, but not to act. After so many thousand talks, still Vidya’s murders’ DNA is not submitted to court. Brother Prince claimed they had tested Leader Prabhakaran’s DNA within 12 hours and confirmed the body found was leader’s body. The UNP leaders who are personally getting involved and meddling the Vidya’s that case, will they explain why there is such delay in this case but it was done in 12 house when they wanted? Further, the police has captured someone and beating them to tell in the court as it was a one sided love and murder. The mother of that man is begging the NGOs to help the man. All embassies are watching these. America asked if they can help the foreign minister on the accountability and responsibility matters. Government is waiting to answer for it until State Secretary John Kerry loses his job and a new one to come, so that they have the resolution sidelined with other matters. It like “we criminal are running a criminal government for criminals”. The FCID makes people to wonder if that is also struck in financial frauds and illegal bribes. Like the Bribery Commission staffs, it has become the FCID’s staff needs to be investigated.

    4. Fertilizing and cultivation the same culture for the removal the same the Yahapalanaya Government is brought in. New King’s children are showing the tendencies of Old King’s children and it is tolerated at the EP and PM level, highest in the country. All the appointments are still taking place exactly like in the previous regime. While criticizing some Old Royal’s projects as white elephants, still money is borrowed to expand those projects. With all the false explanations, expanding those projects certainly confirming these projects are still lucrative cash cows to ministers and concerned staffs. Port City, Hambantota Harbor, Airport all being continued; nothing is so far stopped. But the Highway to Jaffna is the only one stopped. Even though, with whatever the cost or other problems, the road can be used; but because it is going to Tamils area, it is stopped. It is said only one railway line in Lankawe is making profit, that is Indian built Yarl Devi line. JVP and TNA blamed the 65,000 houses project as corrupted one; but neither FCID nor any other body has started any investigation into that. This guy is claiming that Matale Airport costed three times more than it reported. Almost same claim the NPC has on these houses. They are saying this Indian owner is charging three times the price of local contractors, while these houses, like the other white elephant projects, not useable by the owners.

  • 0
    0

    dear harsha

    sri lanka has belatedly found out that money does not grow on trees

    i suggest you do the following to clean up the mess and do it fast.

    1.budget deficit as a %of GDP to 4%.

    2.Government debt as a %of GDP to 50%.This is the maximum that a developing country should have,not the current 75%.As for the hidden loans that the stateenterprises have taken which you refer to in your article,privatise all of them and get rid of them from government balance sheet.
    Regotiate all the loans taken from the chinese..tell them you can’t pay back and to write down some of them.If they don’t, default on the repayments.

    3.total tax as a % of profits 40%.At the moment it is 55%.It is the total that i,am referring to,not only the company tax rate.Who is going to do business in srilanka when they forego more than half their profits.

    4.reduce the no of procedures to start a business.

    5.trade tariffs,%duty-6%.The current average of 20% is far too much.

    6.Hiring and firing practices-make it easier for the employer to hire and fire.Also redundancy costs are far too much.

    7.improve the country’s capacity to attract talent from abroad.Get some feed back from other countries on how they are attracting foreign talent.For example india and indonesia are easily attracting them.Why aren’t we?

    8.Give incentives for women to enter the labour force.

    9.Try to increase the number of people using the internet.especially look into the mobile broadband.laptops,Ipads,smartphones are the way to go nowadays.

    10.exports as a % of GDP to 32%.The current 22% is far too low.

  • 1
    1

    I’m sorry to say this: you guys are so slow in making important decisions. You people took almost a year and half to find out what had happened to the economy. What were you doing in the Opposition? Sleeping? You had had no shadow cabinet?
    I can guarantee you that Mahinda will creep thro’ your Yahapalanaya’s right ear and come out of the left one in no time, while you guys are hesitantly deliberate plans, and ‘strategies’ in order to get yourself out of this mess. You all wasted way toooo much time, energy and resources just to find fault with him but he has apparently come out victorious again and again in front of the general public and the intelligentsia too! Is your article another futile statistical manipulation of the same useless tactical game to hoodwink the educated reader?
    Look at the country today! Let’s take just one issue! Policy uncertainty: it is a major problem for investors and business community. PM says one thing and Finance Minister says something else. Tax rules and regulations are often changed with no consultation whatsoever with the country’s private sector. You just follow the IMF rules and orders and think that Sri Lanka’s private sector is an orphan with no experience! Then, tell me what happened to the proposed retroactive tax and ‘Mansion tax’of your colleague’s first budget? Then investors, importers, as well as other local businesses cannot rely on the weak rupee any more! Look at the way our currency fluctuates! Consequently it is extremely difficult for any business to plan future operations in a consistent manner. Business community was promised policy consistency and healthy monetary policy but everything has become a daydream!
    You as an educated minister jump from one ministry to another and write articles on behalf of the cabinet of uneducated and illiterate colleagues.
    Those who comment will not agree, but please let me clarify this matter to you Doc! We are totally fed up with your unorganized and myopic manner of handling the government affairs from economy to simple daily operations. You can provide lengthy articles with maths and figures to justify the government’s lethargy and sluggishness but average man like the cartoon character ‘Siribiris’ is not educated enough to wait and see. They have already lost their patience!

  • 3
    0

    What mediocre nonsense is this ? Yahapalanaya is led by shisters

    • 1
      0

      Where did you learn English? Did you mean to say Shysters? Yes Ranil’s relatives are in many places including at Apollo hospital and soon in London. Sirisena’s bro is well set. Daughter gets massive advertising contracts. All is well in Braa-paalanaya.

      SHYSTERS R US! like Toys R US

  • 2
    0

    I do hope SL does not go the way of Greece. Nations that outspend their incomes by a massive margin end up in trouble.

    Mr.Minister you make good arguments. At a time when the MR regime was at its highest, you were a lone voice in the opposition. Kudos. Today you remain in touch via Social media more effectively than most in your regime.

    But reality is that people voted out the MR regime primarily because of their arrogance and corruption and above all because he started thinking he was a king. I was in SL before the Presidential election and I was surprised at the number of Three Wheeler drivers, Taxi drivers ,they kadey people even in the deep south said “dhan eya hitiya athiney. balayata kaadara wadi wela” and there was a level of enthusiasm for the UNP backed common candidate I did not anticipate looking in from the outside. One die hard UNP cab driver from JaEla who voted for MR and said he will never vote for RW said he was back in action supporting the UNP because he felt they finally had a chance to win.

    Now recently, when I was there most of the same sort of representative lower middle class people were complaining about the “ohey yana aanduwak, mokuth karannaney naha” meaning this regime is meandering alonge and not doing anything. NO one spoke about bringing back MR but they said they are getting tired of hearing the blame game because you all knew exactly what was what with the state of the economy before winning.

    Now I understand the nature of the political beast there in how quickly you chaps broke the campaign promises about the Cabinet size and the coalition.

    Please investigate without political interference the allegations of massive plunder and punish those responsible for stealing. The sinhala saying “ammagey boodalaya newei”. අම්මගේ බූදලය නෙවෙඉ

    They have no right to plunder the way they did. Your regime including your UNP seniors also have super corrupt elements but no one saw the massive unparalleled nature of greed and corruption as during MR’s time it seems. The arrogant nature of family bandyism and nepotism was at its highest. But sadly, things are still happening the same way with RW’s favoritism and My3’s favoritism going on in many appointments. But the Liberal media that brought you to power is silent for clear reasons. So there is a feeling “at least they got things done”.

    You will probably have 2 years to make rational arguments as to what the nation’s economy is in the shitbucket with vainglorious projects; you will have 2 years to explain and try to persecute the corrupt people who allegedly stole billions without rigging evidence. AFTER 2 years, “They did this they did that” will not fly. You were proudly touting VW in Akila’s seat on facebook. You were all hoping for outright grants from the US that never came. You chaps insulted China and you went after the same folks for the same money. I do not believe everyone is clean and incorruptible; the PM is definitely honest, there seems to be the usual cabal of people wanting to make hay while the sun shines and get rich as fast as possible. The government and nation runs on the income of foreign remittances from labour in the Middle East and propping up a cabinet and MPs with such privileges as car permits still go on. Sad.

    You will run out of time soon to just manage to replace foundation stones on projects started by the previous regime and claim credit. The railroad to Jaffna was done by MR’s regime. Yep the vainglorious projects were a massive waste but so many of the current regime’s people were responsible senior members of MR’s cabinet including the President who voted for the terrible 18th amendment and expulsion of the CJ.

    Time will run out by end of this year to make things dynamic again. Destroying projects finished by the previous regime is not a good idea to re-do the same projects to show it was done by this regime. By the way China executes people for economic crimes and they do not even have fair trials. So have fair transparent trials for those who are allegedly corrupt but start within too.

    “They did this; they did that” will not fly for too long. The greatest accomplishment so far is freedom from fear and freedom of the press. But you can still sense the intolerant arrogance of some top leaders in your party when they accuse people of being traitors for not agreeing on ECTA etc. That is childish but that is how the UNP ruled from 1977-94.(facts are stubborn things).

    It is good to see your regime making overtures to China again; Chinese are smart; they will not fall for personalities. But US is afraid of China and that is the main reason they heralded your regime change. It is a geo political strategic game.

    Great idea to make SL a hub. I said it on your FB, allow offshore casinos even in Jaffna(not too many natural resources in the peninsula to develop besides perhaps a bit of tourism on Casuarina beach etc); bait the rich Japs, Indians and Koreans to come waste their money on gambling. The world’s biggest middle class with purchasing power is in India. Target them for more than tourism. Legalize Marijuana and tax it. Legalize prostitution and tax and regulate it.

    Whether you like it or not, income from labour in the Middle East will remain a key source of forex for a long time more. The accompanying social threats are clear with that approach: broken families, drunk husbands wasting money earned by their wives, rape and incest and also the dangers of pathetic backward Wahabi intolerant radical form of Islam that is spreading. Inevitable outcomes of the labour policies.

    I say investigate and lock up the bastards who are guilty. But people did not vote the out for corruption as much as arrogance and making it a family fiefdom. There will always be corruption even in the US; the difference is the independence law enforcement agencies are able to prosecute the criminals without political interference. Sadly that stopped happening in Sri Lanka as soon as we ended the 1948 constitution and replaced it with the Republic constitution in 1972.

    Don’t get carried away and become arrogant thinking “මා හරි උගතා මා හරි ජගතා “

    Do good and people will respect you; produce results and they will vote for you. Blaming others always has an expiry date in democracies.

  • 1
    0

    Main economic sectors of the country are tourism, tea export, apparel, textile, rice production and other agricultural products. In addition to these economic sectors, overseas employment contributes highly in foreign exchange, 90% of expatriate Sri Lankans reside in the Middle East.

    Top exports of Sri Lanka are Tea ($1.38B), Non-Knit Women’s Suits ($574M), Other Women’s Undergarments ($518M), Non-Knit Men’s Suits ($446M) and Knit Women’s Suits ($436M), using the 1992 revision of the HS (Harmonized System) classification.

    Top export destinations of Sri Lanka are the United States ($2.4B), the United Kingdom ($1.12B), Germany ($590M), India ($515M) and Italy ($461M). The top import origins are India ($4.11B), China ($2.83B), Singapore ($1.72B), the United Arab Emirates ($1.12B) and Oman ($713M).

    (http://atlas.media.mit.edu/en/profile/country/lka/)

    With healed specially chummy chummy relations with the US clearly apparel(bras that made the President angry, undies etc)to US will increase. The overly hostile stance of the MR regime cost a lot in terms of exports to US and EU nations. China and India will not buy the kind of stuff we export.

    Now have you thought about processing the illeminite sand that we export in raw terms to Japan for a tuppence so it can be processed and value added in SL?

    Whatever happened to Rubber and Coconut exports?

    Tea is still the life saver right?

    Whatever happened to VW? How about allowing other assembly plants for re-export because SL does not have real market for mass produced vehicles?

    How about tieing with Chinese firms to make Solar Panels for export?

    SO if you are talking about increasing Exports to the major market the US, you are talking about apparel again. In addition, what about activated charcoal? where does that stand now? also rubber surgical gloves etc? How about making state of the art surgical instruments in addition to gloves?

    Please ask the Cabinet and MPs to pray and thank the labourers in the Middle East everyday for your fancy car permits and luxury living styles and benefits.

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