Land of dealmakers
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Rice deals, sugar deals, oil deals, gas deals, dhal deals, even pandemic-related vaccination deals and so on. Sri Lanka is shadowed by systemic corruption and tainted governance.The country is full of deals and dealmakers and however much governments – present and past – painfully deny these accusations, there is no doubt that the country is replete with corrupt transactions and that hasn’t stopped despite the COVID-19 pandemic and the fuel crisis or during any other time.
In the midst of the pandemic and the current sufferings of the people owing to a fuel shortage that has triggered a rising cost of goods, influential politicians and corrupt officials are making a fast buck, making hay while the sun shines!
This is what Arty, the veteran money market trader, said when he called on Thursday morning for a chat on where the country is heading. “Hello… hello Arty. How are you,” I asked.
“It’s a very depressing situation. See how many people are making money out of the dire state of the people. The latest fiasco is the Oman fuel contract,” he said.
“That is just one of the corrupt deals that have engulfed this struggling nation,” I said.
“While the bond scam during the previous government was just one deal, the multitude of deals under the present regime is happening under our very noses without a fuss,” he said, adding that appointing presidential commissions and other bodies to probe these irregularities leads to nowhere and the corrupt are safe under any regime.
We ended the long conversation on this issue and other burning issues in the country, promising to talk again in coming weeks.
News from the oil import front is that local agents and corrupt officials are minting money from the sufferings of the people, engaged in quick deals to procure fuel – diesel, petrol, kerosene and gas – as the country desperately tries to secure enough stocks (failing at the same time) to meet the demand.
The oil crisis has also triggered another issue: The debt situation in which billions of rupees are owed to the Ceylon Petroleum Corporation (CPC). The biggest culprits are the Ceylon Electricity Board (CEB) and SriLankan Airlines (which claims profits but doesn’t speak of accumulated losses and is kept afloat through money lent by the government). In a vicious cycle of debt, the CPC supplies the CEB and SriLankan Airlines but these institutions don’t pay for the supplies, with payments due accumulating in billions of rupees. This is not hearsay or speculation but established fact. The government then has to bail out the CPC.
At the Sapugaskande Oil Refinery – which meets the country’s total requirements of fuel – allegations are swirling that certain officials want it closed (it’s currently closed ostensibly for maintenance) so that they could strike up lucrative deals for spot purchases. This would force a government, struggling to cope with queues and a shortage of food, into finalising oil contracts without proper scrutiny, transparency and accountability.
For several months, the country’s only oil refinery has been closed when it should have been operating and providing fuel at a much less cost. Crude oil refined at the refinery into petrol, diesel and kerosene costs much less to the consumer than refined oil purchased from overseas.
With its backs to the wall, the government has announced that it would end the oil monopoly – controlled by the CPC and Lanka IOC – and permit imports of refined fuel to stave off shortages.
Will this solve the problem? My gut feeling is, it will not. For instance, any new supplier also needs dollars which are hard to come. If the CPC and Lanka IOC find it difficult to open letters of credit (LCs) due to a shortage of foreign currency, how would newcomers to the trade have access to scarce dollars? On the other hand, if these new suppliers easily meet their foreign exchange needs, then why are the CPC and Lanka IOC struggling to open LCs? Liberalisation and giving up state control is the way forward but at this point of time with dubious dealers waiting in the wings to pounce into action one needs to question this process.
Whether the new policy to allow more importers will be a permanent feature or not remains to be seen. More players in the market may help to ease the shortage and reduce queues, but there needs to be transparency and accountability in imports which are sorely lacking at present.
The latest LP gas contract, as reported in the Business Times last week, is a good example of a suspicious deal where the Cabinet approved one contract but that was reversed and handed over to another supplier whose agent here is said to be the son of a high-ranking government official. Litro issued a statement this week explaining the reasons for the change of supplier but with so many dealmakers with close contacts to government politicians and corrupt officials, such statements are treated with a pinch of salt by a suspicious public.
Multiple players in the oil imports field are sure to pave the way for more deals and fuel more suspicion that Sri Lanka is paying more than what it should for oil imports, further burdening the people.
Epa wela (Fed up)! That’s how Kussi Amma Sera and her friends described the state of Sri Lanka, when I heard snatches of their conversation from the kitchen where I was picking up a ‘maalu paan’ and a mug of tea as my breakfast for the day.
They were also discussing how Sri Lanka has become a handout regime! “Podda, podda dolar denawa, nav walin ena indana walata, apita salli nethi hinda (Dollars are given little by little to buy each shipment of fuel as we don’t have money),” said Kussi Amma Sera.
“Mata therenne naththe indana gena nav walata waraye inna kiyala kiyana eka, lankawa salli hoya ganna-kam evata gevanna. Api nav enna issara wela gevanna oney nedda (I can’t understand how ships carrying fuel are asked to stay at the port till Sri Lanka finds the money to pay the shipment. Shouldn’t the shipment be paid off first before it arrives)?” asked Mabel Rasthiyadu.
“Haema karana de-kama anduwa me davs wala, janathawa thama duk vidinne. Aanduwe deshapalagnayo polime inne nae-ne. Anathuru angaweem kochchara thiyenawada minisunta kaema ne kiyala, bada-ginne inne kiyala, mokada sthavara adayam margayak nethi hinda (In everything that the government does now, eventually the people suffer. The ruling politicians don’t stand in queues while there are enough and more warnings that people are starving without food as they don’t have a steady income),” noted Serapina.
As I munched my ‘maalu paan’, Kussi Amma Sera brought a second mug of tea, saying she had to join a queue for gas. A nation known for the best tea in the world has now become a nation of beggars (begging for overseas support) and queues!
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