News

Winning wine from Bichot

"It made love to me!" One of the many ways wine connoisseurs the world over have described the fine properties of wine.

With the rest of the world, Sri Lankans too are drinking more wine for its taste and more so to its claimed medical properties. Since the latter part of the 90s, the demand for wine has been steadily on the increase in Sri Lanka, while the consumption of other spirits have stagnated or are on the decline.

However, the lack of awareness, cost and the wide unavailability of good quality wines, has deprived budding Sri Lankan wine connoisseurs of this pleasant experience.

Spirit merchants are now making a move to change this with the introduction of good quality wines at affordable prices.

One such initiatives was recently taken by Orient Lanka with the introduction of wines from Albert Bichot, a top quality old world or French wine producer.

The Export Director of Albert Bichot, Ariff Jamal was here recently to launch the wines in Sri Lanka and to educate the local hospitality industry and the staff of Orient Lanka of the finer points of selling, serving, storing and other sensational aspects of fine wines. He said that 'cheap wines' had flooded the market and was destroying an undeveloped palate. He said that this made wine drinking an undesirable experience. He feels that being educated about wines provided half the pleasure, as even the way the wine is stored and drunk affected the taste.

Mr. Jamal said that after studying the market for almost two years, he found Orient Lanka to be the most prominent and adaptable outlets.

Sales Manager of Orient Lanka, Mohan de Silva said that many changes and improvements were made to their cellars to house Albert Bichot wines. He said that it was a requirement of Albert Bichot to have similar cellar conditions throughout the world to maintain standards.

Maison Albert Bichot is one of the top family owned wine houses in France, producing some of the most exquisite wines. It is one of the few houses which controls the production process from planting of the seeds in the vineyards to the processing and bottling. Albert Bichot is known for its quality and exquisite palate of flavours it offers to tantalise the wildest of taste buds.

Outgoing Chamber chief wants better policy

Concrete policies, regardless of which government is in power, are needed for agriculture, industry and the trading sector in order to achieve sustained growth, a top coaporate personality said last Friday.

Outgoing Chairman Ceylon Chamber of Commerce Mr. Ken Balendra delivering a hard hitting speech at the Chamber's AGM on lack of policy at the highest levels said,"Ours is a country with great potential, which over the decades majority of politicians have destroyed in many a way.

"We have come to a stage where even a Pradeshiya Saba Election would bring the country to a halt.I hope that all politicians of all parties will put the nation before themselves for the greater benefit of present and future generations of Sri Lankans".

The need to scan the future and adopt strategy's to compete in the ever-changing global environment was stated by The Chairman of Indian Industry's Mr. Tarun Das. He added, " In order to win in toady's environment companies need to realise three things; enhanced corporate governance to provide transparency to capital providers, strategies to attract and maintain human capital and a continuous operation within the firm to scan the future to be competitive.

Mr. Chandra Jayaratne was elected Chairman for the year 2000-2001.

Mackwoods, Aptech get into the multimedia Arena

Mackwood Infotec (Pvt) Ltd. in partnership with Aptech Limited of India launched the Arena Multimedia Centre recently.

The Arena Multimedia Centre at Wellawatte is an IT education institute that focuses on specialized multimedia training.

Multimedia constitutes IT, telecommunications and media and acts as a medium to integrate, text, audio, video and graphics with the aid of a PC.

The education center will train participants on web design, graphic design, cartoon animation, virtual reality, 2D and 3D Animation, e-business portal development, corporate presentations, etc.

As part of the course Arena also has a module in Personality Development where participants are trained in image building, communication skills, team leadership and team handling.

Courses covered at this institute will lead to dual certification in Multimedia and Web Engineering and offers career options such as Graphic Designers, Audio Video Specialists, Animators, Set and Costume Designers, Web Page Managers and Designers, etc.

The training will be provided by experienced staff assigned by Aptech Ltd. under the franchise agreement.

Mackwoods Infotec (Pvt) Ltd is a BOI venture and a fully owned subsidiary of Mackwoods Limited. The company was set up to benefit from the IT sector in Sri Lanka in March 2000 and recently launched an Aptech Computer Education Centre in Borella.

The Mackwoods Group is one of the oldest mercantile firms in Sri Lanka and so far has been involved in latex projects, plywood manufacture and in the plantation sector with Agalawatte Plantations.

Aptech Limited of India is a leading IT training organization with 1500 centres spread in 30 countries.

Arena Multimedia is a division of Aptech and has established 150 centres providing multimedia training to career students and working professionals globally. It also holds ISO 9001 certification for its Education Support Services.

MMBL , Maharaja join hands in IT training

By Akhry Ameer

Mercantile Merchant Bank Limited in a joint BOI venture with the Maharaja Organization last week launched MMBL CyberSkills (Pvt) Ltd. to provide IT training.

MMBL CyberSkills (Pvt) Ltd. under a franchise agreement with NIIT Ltd. in India-the largest IT training organization in the world-will set up six new training centers to conduct e-Commerce and Internet Technology courses.

NIIT an Indian based company with 18 years of experience, currently has 1750 centres spread across 26 countries. Through the years it has also established various divisions for software development and multi-media globally. Today as a US$ 206 million e-Business Solutions Corporation NIIT has various alliances with the big names in the industry like Oracle, Microsoft, Computer Associates, etc. NIIT was the first to obtain ISO9000 certification in education delivery and is the first independent courseware vendor for Microsoft outside the US.

The six new centers will be opened at Union Place and Kotahena in Colombo, Kalutara, Gampaha, Galle and Kurunegala. The centers will conduct NIIT benchmarked e-Technology curriculum called Futurz. The courses will be offered at certificate and diploma level and the complete programme will lead to a iGNIIT title which will include one year's job placement.

The courses have been designed in such a manner that the students will also be eligible to sit for Microsoft, Linux, Oracle certifications. The training staff will be trained by NIIT professionals and will undergo NIIT lecturer certification.

Announcing BOI plans to develop the IT sector in Sri Lanka, at the signing ceremony, BOI chief Tilan Wijesinghe said that recognizing the US$ 100 billion e-Commerce market the SLIIT was started recently.

A campus is also to be set up shortly in Malabe for IT training with necessary amendments for recognition through the UGC Act. He added that the East Tower at the World Trade would be converted to an IT park.

The companies that setup here will be supplied with facilities such as Internet access at 2Mbits speed. He also said that the old Pugoda Mills compound will be transformed into a residential IT university for 2500 candidates and that private companies would be invited to manage it.

BOI is also in negotiations with SUN to setup 6 SUN-Java centers in the island. The BOI also proposes to support 50 more IT centers in extremely rural areas and will work with Sri Lanka Telecom to develop physical IT infrastructure and support private companies in developing human resources related IT infrastructure.

Quality people talk on quality

Sri Lanka Association for Quality (SLAQ) will hold its Millennium Quality Convention from July 25 to 27 at the BMICH. This year's theme will be "Meeting Global Competitiveness through Quality Leadership".

World renowned quality expert Dr. James Harrington of USA is scheduled to give the keynote address at the convention.

At a media conference SLAQ President Srilal De Silva said that their aim was to reach the global quality standards by year 2005."

"The conference will aim at gearing our industry's to be globally competitive in terms of quality," he said.

The conference will comprise of six plenary sessions that include, "Project change management" by Dr. James Harrington, "Globalisation and competitiveness" by David Flood and "Marketing quality" by Dr. Uditha Liyanage.

"If we want to be a force to be reckoned with in the international markets we need to offer products and services of superior quality. Quality management should be part of corporate strategy", Mr. De Silva said.

DFCC quotes two ways on SLT debentures

DFCC will play the role of a market facilitator by quoting two way prices on SLT debentures. This will have the effect of narrowing the gap between buy/sell quotes and enabling better transactions. As a facilitator for SLT debentures, DFCC stands ready to buy and sell on its own account. This would help investors to sell their holdings when they need to realize cash and prospective investors to buy SLT debentures from the market, a DFCC press release said.

DFCC managed the listing of Sri Lanka Telecom debentures in March 2000. The issue was the first rated debenture in Colombo's debt market and the largest in terms of size, amounting to Rs. 1.5 billion. The issue was over-subscribed with applications aggregating to Rs. 2.14 billion. However, it has so for failed to attract sufficient retail investor interest, the bank release added.

The presence of a market facilitator in the secondary market reduces the liquidity risk to the investor in SLT debentures. The improved liquidity of the debenture will help maintain its true value thus reducing the liquidity premium demanded by investors in the any future issues by SLT.

DFCC Bank has appointed its fund management subsidiary NAMAL to act on its behalf in quoting two way prices and trading SLT debentures. This being a pioneering attempt with attendant risks, DFCC will undertake this activity on a limited scale with an allocation of Rs. 50 million that could be turned around many times to record much higher trading volumes. DFCC has also built in necessary safeguards to mitigate downside risks by limiting transaction value per quote to Rs. 1 million. This market facilitation role is aimed at the retail investors in any of the following debentures issued by SLT.

(a) Fixed interest rate of 14% p.a. payable every three months from the date of allotment.

(b) Fixed interest rate of 14.5% p.a. payable every twelve months from the date of allotment.

(c) Floating interest rate of 1.25% above the simple average of the 182 day weighted average treasury bill rate at the previous four primary auctions as announced by the Central Bank of Sri Lanka.

SLT Debentures have been rated "SL AA+" by Duff and Phelps Credit Rating Agency Lanka Ltd. which reflects the high credit quality of the debentures.

The principal reason underlying poor retail participation not only in the SLT issue but also in previous listed debt issues has been the lack of awareness among investors on the merits and demerits of investing in listed corporate debt as compared to investing in bank deposits and government securities. The second biggest deterrent to wider retail participation is the lack of liquidity to holders of listed debentures. As has been evident in several issues of the past, subscribers to the initial issue had to take a capital loss if they opted to exit from the investment before the scheduled redemption date. This in turn is due to the absence of an active secondary market for listed corporate debt.

There is too wide a gap between buy and sell quotes for listed debentures in the secondary market and therefore transactions are few and far between. This fundamental weakness needs to be corrected to seriously develop the corporate debt market, the bank release says.

DCR on Sri Lanka Telecom

Duff & Phelps Credit Rating Lanka Limited (DCR Lanka) is closely monitoring the cash flows of Sri Lanka Telecom Ltd (SLT) as competition mounts from other telecommunication service providers who are bypassing the international gateway of SLT, a DCR release says. A 35 percent stake of SLT was sold to Nippon Telegraph and Telephone Corporation (NTT) in August 1997. At that time, the Government of Sri Lanka(GOSL) gave an undertaking to NTT that the Postal and Telecommunications and the Media Ministry will not issue any other license until 5th August 2002 for the provision of international telephone services in and from Sri Lanka under the provisions of the Sri Lanka Telecommunication Act No. 25 of 1991, the release adds.

Before NTT bought a stake in Telecom, the ministry had also granted three data communication licenses that included the right to provide Enhanced Voice Services. Developments in technology have made it possible for internet voice calls (Enhanced Voice) with quality similar to that of cellular phones to be placed and received using gateways, and normal telephone handsets, at each end. With technology becoming freely available, these Enhanced Voice operators are now bringing in a significant amount of international voice traffic to Sri Lanka using voice over Internet Protocol (VOIP) technology and terminating on Wireless Local Loop (WLL) networks and SLT's own network.

Such calls bypass the international gateway of SLT.International telephony traffic is an important component of SLT's revenues, and hence SLT has sought legal redress for loss of revenue. TRC has informed the three Enhanced Voice operators that "Enhanced Voice does not fall under the expression "provision of International Telephone Services". Further, the Telecommunication Minister confirmed that SLT is the only authorised licensed operator to provide international voice telephony to and from Sri Lanka till 5th August 2002, the release says.

However, several parties have initiated action in the District Court of Colombo, which could have a bearing on the SLT's monopoly to provide international telephone services. These cases are pending. The operators licensed inter alia to provide Enhanced Voice Services claim that they are licensed telecommunication operators legally empowered to provide the services they currently provide. The incumbent telecommunications operators have also taken the dispute before world forums.

SLT had been denied injunctive relief by Courts in a previous action against one Enhanced Voice operator on the grounds that SLT has not unfolded a prima-facie case for their claim to a monopoly and that the District Court does not have jurisdiction to hear the case. However recently, SLT obtained an enjoining order against another Enhanced Voice operator inter alia restraining them from providing international telephony/telephonic services and/or connections for international telephony/telephonic services.

On an appeal by this Enhanced Voice operator to the Supreme Court, this enjoining order too has been vacated. SLT has also filed action against a WLL operator seeking an enjoining order restraining them from providing International telephony services, other than through SLT's international gateway.

DCR Lanka is unable to verify that a monopoly does exist in favour of SLT until the Courts determine so and feels that it is too early to make a determination of the impact the court decisions on the several actions pending may have on the revenue of SLT. SLT has taken appropriate commercial measures to mitigate a loss of revenue, by bringing forward some of their year 2002 strategies. Considering the flexibility SLT has on postponing its capital expenditure, DCR Lanka believes that this would have a moderate impact on the SLT's credit protection measures. DCR Lanka will maintain a close watch on the industry and SLT to monitor the developments and will take any rating actions as may be necessary.

SLT completes Rs. 1.5 billion optical fiber ring

Sri Lanka Telecom has achieved another historic landmark, with the commissioning of Sri Lanka's first ever optical fiber Inter Province Transmission Ring, under the Regional Telecommunication Development Project - Part 1, with a total investment of Rs. 1.5 Billion. This 700 km long optical fiber ring, connects 15 major cities and urban centres encompassing four key provinces, a Telecom release said.

Under this massive project, a gigantic optical fiber cable was laid in a ring configuration, which encompassed the major metropolitan and urban centres of Sri Lanka. This massive ring includes Colombo-Gampaha-Negombo-Chilaw-Kurunegala-Kegalle-Matale-Kandy-Nuwara Eliya-Hatton-Nawalapitiya-Avissawella-Ratnapura-Kalutara-Mount Lavinia secondary switching centres and back to Colombo, totalling a route length of 700 kilometres.

This ultra modern optical fiber network provides 824 channels of 2 Mega bits per second (Mbps), between Colombo and the other secondary switching centres within the ring, and also 365 channels of 2Mbps, among these switching centres. One 2Mbps channel supports 30-voice communications simultaneously. This network is equipped with remote monitoring facility, to allow it to be controlled and monitored from Colombo and Kandy. Prior to this project, the National Transmission Network was mainly on Radio Links, which had certain limitations.

The introduction of this high technology optical fiber ring significantly strengthens the SLT backbone transmission network, with a very high degree of reliability.

It will enable the facilitation and upgrading of broadband services such as multi media, very high-speed data communications, Integrated Services Digital Network (ISDN) services, video conferencing, etc. to these urban centres in the provinces.

The benefits to customers are multi-faceted with numerous value-added services, while immensely enhancing the quality and the clarity of the voice services.

SLT plans three more optical fiber transmissions rings to be installed in the Colombo metropolitan, southern and northern areas.

The Colombo metropolitan area project is expected to be completed by the end of 2000, while the latter two would be completed in 2002, in keeping with SLT's vision of making Sri Lanka a 'Cyber Island' and the telecommunications hub of South Asia. In this regard since 1994, the total massive investments already pumped into building this ultra modern national telecommunications network, has reached a staggering Rs. 68 billion, including the Rs. 13 billion planned for this year.

Money Market Update First capital Ltd

Call money overnight repo market

The inter-bank call money market and the overnight repo market

During the week ended 20th July, the inter-bank call money rate saw stabilizing in the range of 14%-14.5%. Though the liquidity shortfall remained unchanged, the pressure on the call money market was slightly eased as most of the large borrowers reached the Central Bank reverse repo window. On Thursday's closing inter-bank call rate dropped to 13%, as most of the banks were plus on the squaring off day. The weekly call money average declined further by 21 basis points to close at 14.37%.

The Central Bank overnight repo rate and the reverse repo rate remained unchanged at 9.5% and 15% respectively. Consequent to the lowered call money rate, the market repo rate witnessed a marginal decline and was mostly in the range of 13.75% to 14.5%.

Given the persistent liquidity shortfall, the market borrowed Rs. 12Bn from the reverse repo window, where the majority of them were likely to be on a term basis rather than overnight. Therefore, the reverse repos during the rest of the week was very modest. As the reverse repo window released Rs. 12bn to the market, the pressure on the overnight interest rates were slightly reduced.

The treasury bill auction.

Rs. 2.9bn worth of government debt was renewed in the auction held during the week. Despite the Central Bank intervention in the auction by reserving Rs. 750mn worth of bills and buying further approximately Rs. 1bn worth of bills the yields for all categories rose.. The pressure on the treasury bill yield continued, as there was no clear signs of improving the liquidity.

A 2-year bond auction was held during the week and offered Rs. 1.5bn worth of bonds. Though the auction was fully subscribed, the yield improved by 11 basis points to 13.69%. The Central Bank accepted 100% of the offered amount. Some active trading on the secondary market was witnessed especially in the shorter end of the yield curve. The secondary market for long bonds remained inactive.

Foreign exchange - dollar spot movement

The Central Bank middle rate remained unchanged at Rs. 77.535 per dollar. Some renewed selling of dollars was witnessed during the week, resulting in a drop in spot rate. The spot rate closed at 78.50 levels, after trading at 78.40 levels. Three months forward was quoted at 79.65 to 79.75.

Last Week This Week Change

91 Days 12.33% 12.37% 0.04%

182 Days 12.46% 12.49% 0.03%

364 Days 13.11% 13.14% 0.03%

Maturity 01-06-02

Yield 10.75%

Amount

offered Rs.Bn1500

Amount Rs. B

Accepted 1500

Weighted 13.69%

average

Change 0.11%

Tea Update

Hopes buried in the sand

All hopes of regaining the Egyptian tea market before a trade agreement was reached at the end of the year was shattered last week. The trade dispute between Egypt and Kenya was announced as resolved early last week. Officials said that the issue was resolved only on the surface to facilitate immediate trade and therefore expect a few hiccups till a broad-based agreement is reached.

All backlogs of shipments was scheduled to be cleared within two days of the agreement.

Meanwhile, Iraqi officials have requested Sri Lankan tea exporters to forward their tender for the eighth oil for food programme.

Local officials expect a lower tea export allocation than in the seventh oil for food programme. The allocation in the seventh oil for food programme was also lower than the in the previous programme.

Prices at local auctions last week was very positive. Most varieties gained over the previous prices. Low growns were in short supply due to dry weather conditions and as a result pushed up prices marginally. The average price recorded in the second sale of this month was the highest recorded for this year.

Market Updarte

Foreigners dump blue chips

Heavy foreign selling saw the indices decline further this week. Asian Hotels Corporation (AHC) shares stole the limelight this week when Kingdon Capital dumped a large quantity of its AHC shares in the market. John Keells Holdings lost ground as foreigners sold out and the share closed the week at Rs.141. Net foreign sales for the week was Rs.235 mn.

The All Share Price Index declined .77 per cent to close the week at 508.18 while the Milanka Price Index fell 1.19 per cent to close at 832.7. The MBSL Midcap gained .6 per cent to register 896.9. Average turnover for the week was Rs. 70.9 mn.

Turnover levels are usually slim except when there is foreign activity, Director, John Keells Stock Brokers, Nandakumar Nair said. However locals continue to absorb foreign selling despite the high interest rate scenario, he added.

"In the run up to the general election investors are likely to adopt a wait and see attitude and the market is likely to be quiet pre- election," Head of Research, Jardine Fleming HNB Securities, Amal Sanderatne said.

"The market should continue to remain range bound amidst thin trading activity," Head of Research, Asia Securities, Dushyanth Wijaysingha said.

"Diribala" from Commercial Bank \

The Commericial Bank of Ceylon has launched a unique development loan scheme for private sector entrepreneurs seeking to develop their businesses.

The scheme 'Diribala' provide financial assistance to industrial and agricultural sectors of the country, a bank release said.

Commercial Bank's Senior Manager - Development Credit Mr. Gamini Jayadeva said most of the credit lines provided by the Asian Development Bank (ADB) and the World Bank have been exhausted necessitating a scheme like this. The upper limit of the loan is Rs. 10 million and the interest rates too are very attractive.

The loan scheme was developed and introduced in response to requests from industrial and agricultural sector customers for a medium-term development loan, 'Diribala' is the only scheme from a private bank which is not re-financed by another financial institution.

Ceylinco Insurance to manage Agrani

Ceylinco Insurance Co. Ltd., Sri Lanka's leading private insurer will shoulder the responsibility of managing Agrani Insurance Company of Bangladesh in a move towards gaining equity participation of the company. Mr. Jagath Alwis (Director Technical) and Mr. Guneratne Banda (Director) signed the Memorandum of Understanding on behalf of Ceylinco Insurance at a ceremony held in Dhaka recently, a news release said.

The move will be subject to approval from Sri Lankan and Bangladeshi governments.

Ceylinco Insurance will play the key role of management and development of the Agrani Insurance Company. In order to do so they will be improving the company's sales and marketing strategies, the management of distribution networks, and designing new methodologies for planning and implementation of programmes. Ceylinco will be planning to improve new insurance products and also help modify and improve the existing products too. While managing the company's re-insurance portfolio, Ceylinco will be concentrating on the long-term development of Agrani Insurance Company by conducting staff training programmes and research activities, the release added.

One Stop Property Shop

Ceylinco Property Center (CPC) has been opened to simplify the task of buying, selling, renting and leasing land and buildings, a news release says.

The company utilizes modern technology to bring together buyers, sellers, landlords and tenants on line at our website- www.ceylincoproperties.com. The database categorizes its clients under locations, prices and many othe related criteria for easy access to the property of a customer's choice.

CPC's product portfolio also includes construction, renovation and interior decoration services in addition to a wide range of other support services including financial, project management and consultancy services.

The online database, accessibly worldwide gives detailed descriptions of the real estate with photographs, location maps and site plans. CPC aims to cater to a wide variety of needs, tastes and budgets of locals and expatriates.

Invitees and prospective customers present at the opening ceremony were given an insight into the in

Bartleet's opens Tea Advisory Centre in Galle

Minister of Education and Higher Education, Hon. Richard Pathirana declared open Bartleet's tea advisory and extension centre in Walahanduwa, Galle recently. The Hon. Minister addressed a large gathering present on this occassion and highlighted the benefits of such a centre.

Mr Rohana Illangaratne, Chairman of the Tea Smallholdings Development Authority also addressed the gathering.

On declaring open the centre, the Hon. Minister was briefed by Mr Eraj Wijesinghe on how tea's are examined and tasted. He said that Bartleet's will have two knowleadgeable cconsultants available 5 days of the week for assisting Estate Managers, Factory Officers and Bartleet's will also extend their services to educating the tea smallholders on Marketing and harvesting good leaf.

Mr Bryan Baptist, Joint Managing Director of Bartleet Produce Marketing (Pvt) Ltd. added that school children will also be given the opportunity to learn about tea by way of Seminars organised for them and videos on Tea Marketing.

Biz Broadsides by Rajpal A.

All the tosh about structural adjustment with a human face

Samurdhi has been given the kick by the old Bretton Woods institutions. If newspaper reports are correct, the poverty alleviation programme of the People's Alliance, has been kicked in the head by the World Bank which does not want to support the programme — at least significantly, anymore. Apparently, this is due mainly to the fact that the Bank is not convinced that the Samurdi is a poverty alleviation programme which packs any clout.

This is the era when state aided campaigns are not essentially looked upon as positive by the Bretton Woods institutions, or any of those powerful global establishments which call the shots. The fundamental tenet of the neo- liberal vision of poverty alleviation used to be that the "trickle down'' from the rich will eventually alleviate poverty among the underclasses.

But this did not happen , and eventually the new concept of empowerment of the masses through a partnership of "markets, the state and civil society,'' with the poor themselves being the engines of these self- help programmes , was born.

In sum, of course state aided subsidies, and the state's commitment towards education, health etc., was to be replaced by the initiatives that were supposed to be taken by civil society, and the poor themselves, acting with the help of non- governmental organizations. The whole thing was called, strategic, "empowerment.''

But, if the question was to be asked whether Janasaiviya, which was begun by President Premadasa was within this concept of poverty alleviation, the answer is both yes and no.

Though all Sri Lankanas will know that Janasaviya was a state aided poverty alleviation programme, it did not represent a simple return to the welfareism of the statist period. In other words it was not a state subsidy. "It was rather constructed and represented as an innovative approach to poverty alleviation based on self-help and community empowerment. This workfare approach to poverty alleviation meant that the program could be enthusiastically supported by the Bretton Woods institutions, that had by now become concerned with the human face of structural adjustment.'' ( Quote from Kristian Stokke (1998). Globalization and the politics of poverty alleviation in the South.)

Its difficult to disagree with Stokke's analysis that the Janasaviya came on the heels of the breakdown in the social contract that prevailed between the various actors of Sri Lanka's class divide. This breakdown came as a result of the social disorder and conflict, that began to emerge after Sri Lanka began to follow the neo-liberal model of economic development in 1977.

Janasaviya sought to re-introduce elements of this social contract, though now with a different face. "The Janasaviya Poverty Alleviation Programme emerged in this context as a populist attempt to regain a degree of political legitimacy by constructing a program for social development that referred back to the material and symbolic practices of democratic socialism in the earlier periods.

The President was extremely successful in convincing competing political factions and parties that the Janasaviya was and had to stay above party politics, both at the central and the local level.'' (Kristian Stokke (1998). Globalization and the politics of poverty alleviation in the South.)

Janasaviya was state intervention, but actually and in fact a form of state "catalysation.'' The state did not give subsidies, but did what it could to "empower'' people at the grassroots, by transferring money to establish credit and credit aided self help. This was okay with the World Bank, and its Bretton Woods twin, because it was not a straight subsidy, and because something had to be done in terms of projecting a human face in structural adjustment.

But now, even the World Bank seems to say "no'' to Samurdhi. As the newspapers seem to point out, one reason is that the present dispensation in power is not "convincing competing political parties that the Samurdhi has to stay above party politics, both at the central and local level.'' As Stokke has written, Janasaviya stayed above party politics, but Samurdhi it seems was not able to do that.

The neo liberal models of poverty alleviation, which were essentially initiated after it was realized that the trickle down effect does not help the poor, imply that 'the empowerment of the powerless could be achieved within the existing social order without any significant negative effects upon the power of the powerful' (Mayo & Craig 1995, p. 5).

The crux argument of poverty alleviation in the "empowerment'' model that is favoured by the World Bank and its' Bretton Woods twin, is that the powerful should not be disturbed by the task of alleviating poverty among the poor. That's why there is so much enthusiasm for "empowerment'' via NGO instruments working at the grassroots, something that is modeled more than in part, on the Grameen Bank idea in Bangladesh.

But, now that even this kind of "empowerment'' albeit with a little prodding and pushing by the state ( Samurdhi ) is being condemned by the IMF, it seems abundantly clear that NGO aided "empowerment'' is not the panacea to all of the ills of structural adjustment and ensuing poverty. Straight subsidies from the state are no doubt passé, and inefficient too.

So, though there is no solution to the impoverishing policies of neo-liberal capital, at least, the fact that nothing can replace some amount of rationalized state intervention in the areas of health – education etc,., should be clear from the fate of Samurdhi. This should be clear, even to the most servile stooge of the World Bank. And as far as the government is concerned, it has learnt that it's difficult satisfying the World Bank – more difficult than ever im agined. novative services CPC has to offer.

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