Mayan calendar, impeachment and prosperity
View(s):By far, the biggest development this year has been the gradual control of the Sri Lankan economy by China.
According to our story on the previous page, China is set to contribute half of the US$21billion or 6.5 per cent of the GDP investment each year in the period 2013-2015 on mega development projects.
In another section in this newspaper, there is an article marking 60 years of the Sino-Lanka (Sri Lanka-China) rubber-rice pact where then Ceylon (in December 1952) bartered rubber for rice from China. At that time, Ceylon was close to the West but opted for this route (seeking a barter deal with China) since the country was short of rice but had plenty of rubber.
While a lot of water has gone under the bridge since then, Sri Lanka has come a full circle and is once again relying on the Chinese to support the economy – both in the immediate pre-war and post-war era. Rubber on the other hand still remains a lucrative export crop in addition to increasing domestic use in value-added export products.
As we turn the pages of the developments in Sri Lanka this year, none would forget the impeachment of the Chief Justice Shirani Bandaranayake and its ongoing aftermath, the collapse of the Colombo stock market, the ‘curt’ dismissal of Securities and Exchange Commission Chairman Thilak Karunaratne who challenged mafia and rogue traders in the market but was forced to quit due to political pressure, the tainted TFC-NSB stock market deal which forced the ouster of NSB Chairman Pradeepa Kariyawasam (husband of the chief justice), among other crises’.
The Business Times, on the other hand, scored many firsts with its path-breaking email polls, joined by polling partner the Colombo-based, market research agency, Research and Consultancy Bureau (RCB). The joint polls were held on many issues of national, economic and social interest. In another new initiative, the RCB conducted a poll in several districts, for the first time venturing out of Colombo to ask people their views on attempts by the Government to scrap provincial councils.
The polls which cover middle-urban class and semi-urban societies also reflected the growing disenchantment of the government and its rampaging politicians.
Unsurprisingly, the latest BT-RCB poll this week asking people to literally forecast the future on what would happen in 2013 also reflected the uneasiness between people and the government.
Most people said a new chief justice would emerge in 2013 showing that the full force of the government machinery would be used to remove Ms Bandaranayake. A new Prime Minister (replacing the ailing D.M. Jayaratne) was also forecast while most people also agreed that the ‘End of the World’ as seen in the Doomsday Mayan calendar won’t happen. Interestingly 15 per cent of the respondents said they were ‘unsure’ whether it would happen or not while many people in Colombo offices added to the hype, saying they were not sure what would happen. Some enterprising youngsters wore ties to office on Friday, December 21 expecting ‘something’ to happen the next day!
Jokes apart, 2012 has been a difficult year for many Sri Lankans with inflation and cost of living rising particularly when the Central Bank (CB) in February pulled out of the foreign market, after intervening for several months to maintain an artificial Rupee value against the US dollar and other currencies.
Exports and economists have been critical of the CB pumping millions of dollars to halt the slide of the Rupee which in turn kept the US dollar value down, affecting export revenue.
The Government in what is seen as a smart move said it won’t be resorting to foreign commercial borrowings and instead invited Sri Lankan banks to borrow prescribed sums from abroad to cushion any shortage in foreign reserves.
Having moved out of the sanctuary of a low income country which provides access to grant aid and cheaper credit, Sri Lanka is now compelled to borrow at commercial rates which is adding to the debt burden while interest payments keep rising.
The slowdown in investments by private companies owing to a ceiling on bank lending to corporates is likely to end after the CB lifted the credit limits and encouraged banks to invest in the economy with interest rates announced this week.
On Friday, as the country waited with bated breath, the Appeal Court granted the chief justice leave to appeal in a case filed by her to quash the impeachment proceedings of the Parliamentary Select Committee. This is the first time that a chief justice has sought redress in a lower court, probably all over the world.
Early 2013 will see the clash growing between the ruling party-controlled parliament and the Executive on one side against the judiciary. How these developments would play out next month in Sri Lanka remains uncertain.
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