Financial Times

Recently we reported the case of Hayleys and its subsidiary Haycarb and the struggles this group is having in winning the confidence of the authorities as a world-class entrepreneur.

The issue here is that the Board of Investment had invited foreign investors in the same field which has caused problems for the Hayleys group forcing that organization to set up factories in Thailand and Indonesia to source raw material.

Thus due to illogical and lack-of-foresight strategies Sri Lanka’s loss is Thailand and Indonesia’s gain in jobs and investment (which Sri Lanka would have benefited). It’s no use labouring the point here – after two weeks of focusing on this issue and some additional stories appearing this week on the same issue – because you just cannot fight against officialdom, the bureaucracy or some official sitting on his high horse, totally inexperienced, but claiming to know what is best for this country.

We have had many of these in the past and as a result, many cases of missed opportunities or missing-the-bus, to use a well-known phrase. What a shame in a country where we need to grab any good opportunity with open arms if it means benefits – especially when we are with our backs against the wall due to a protracted conflict that has affected investment, tourism and all other sectors of the economy.

This week we run another story of how the country and its people lost out on an opportunity to benefit from lower fuel prices – all because officials and ministers were either not interested; too busy; passed the buck or didn’t take it seriously.

Our story talks about a Sri Lankan resident in Toronto who has specialized in financial and hedge funds’ markets and wanted to help his country with a scheme to cushion or protect against high oil prices.

In a typical pillar-to-post scenario, he has been meeting and communicating with ministers and officials for the past four years and his proposal has been swinging from one government to another like a pendulum.

The mechanism was simple – invest in a scheme of futures trading, options and swaps – and cap the price of fuel at a maximum of $40 (of whatever capped price agreement was reached on). Under such a scheme, a capped (maximum price) is fixed and whenever the commodity goes above that price, the price at which trades can take place is the capped price and nothing more. This means if under the agreement the capped price was $40 of $50 per barrel and if current world prices are $70 per barrel (and seen rising to $100), Sri Lanka would have been purchasing at $40-50 per barrel. Translate that into local prices – that’s about Rs 50-55 per litre of petrol compared to Rs 93 per litre now!

The Sri Lankan spent his own money to come at least three times to Colombo from Toronto and also had added costs of long-distance calls. While often his proposal met with an “oh-one-of-those-things” kind of reaction that we are so used to when Sri Lankans offer advice or sound proposals to the government one reaction was, why offer a proposal when not asked for?

Ironically such a thing is happening when President Mahinda Rajapaksa is trying to entice Sri Lankan expatriates to provide their expertise to help the country progress on the path to development.

On Friday we learnt the authorities are once again planning to review the proposal but who knows where it would end this time – hopefully not another wasted effort for its creator. Maybe a project like this needs the blessings of the President – like anything else to work in this country.