Grin and bear
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In the 1970s, under the United Front government composed of the Sri Lanka Freedom Party (SLFP), the Lanka Sama Samaja Party (LSSP) and the Community Party (CP), N.M. Perera of the LSSP was appointed Finance Minister. As the coalition’s inward-looking policies triggered an economic collapse and a shortage of foreign currency and local revenue, NM was dubbed “No Money Perara”.On whom should this dubious ‘No Money’ title be bestowed on, these days, when the country is facing a similar crisis? (Basil) Rajapaksa, (Ajit Nivard) Cabraal or even (Udaya) Gammanpila who moans about not having money to buy dollars for fuel payments?
I was reflecting on these issues since the country is facing a huge revenue and foreign exchange crisis – the worst foreign exchange crisis since the 1970s – resulting in queues at fuel stations and for milk powder, for cooking gas (according to some reports there is likely to be another shortage) and for some other essentials.
As I prepared to write my column this week, the power was cut off in our area. At that moment, the telephone rang with Uncle Berty, known as ‘Sporting Berty’ for his penchant for betting on horses, on the line. He sounded angry, as his betting shop was closed due to the power cuts.
“I say, a one-hour power cut is understandable but two hours is unbearable and three hours is insane,” he said adding, furiously; “this government is grrr…%%@##$&&^6it!!”
The discussion across the neighbourhood this week was about the rolling power cuts – first an hour, followed by two hours and then more than four hours. That was also the topic of conversation under the margosa tree.
“Mae peya hathare light kapana eka loku pissuwak. Aanduwata planak nedda man danne ne (These four-hour power cuts are sheer madness. Doesn’t the government have a plan),” said Kussi Amma Sera.
“Balashakthi Amathi Udaya Gamanpila kiyanawa eya avavada kara kiyala me arbudaya gena giya avurudde. Ehemanan aei me waradi kalamana-karanaya (The Energy Minister Udaya Gammanpila says he issued warnings of this crisis last year. If that is the case, why was it mismanaged),” asked Serapina.
“Thava avavada enawa indana nethi wei kiyala, ho dollar madi wei kiyala indana ganna, maarthu aprel wena kota (There are even further warnings that we won’t have fuel or enough dollars to buy fuel by March or April),” said Mabel Rasthiyadu.
“Issara wela uyana gas aduwaka prahsnaya thibbe. Etha kota minissu gihilla current cooker gaththa. Den mona wada karanna puluwan eh cooker ekka (Earlier the problem was just a shortage of cooking gas and people bought electric cookers. What do you do with these cookers now)?” asked Kussi Amma Sera.
While the government is struggling to manage the situation and miserably failing in the process, its officials have cultivated the fine art of issuing contradictory statements. Consider the statements of the Chairman of the Public Utilities Commission Janaka Ratnayake. Last week he said there won’t be any power cuts until March, only to break that promise a few hours later and announce a power cut. One-hour power cuts became two hours, then three hours and now four hours. What’s next in store, no one knows!
It was in the midst of this unsettled governance that the President called a meeting of the country’s top business professionals a few days ago. But rather than discuss in detail the country’s crisis and seek opinions from the business community, it was more about how business can help develop the country; not a priority at the moment. The business barons present should have been asked for their suggestions (the Ceylon Chamber of Commerce will be willing to lead such an effort) on ways of settling debt, meeting foreign exchange liabilities and paying our import bills.
Last week, the chamber, while frowning on the Surcharge Tax, provided many alternative recommendations considering either an income tax surcharge of 10 per cent from all taxpayers, an income tax surcharge at varying rates depending on the level of income, credit to be carried forward for paying the one-off tax or the imposition of the tax on a prospective basis. Any of these alternatives could have raised the targeted revenue, while minimising the burden on the private sector during this extremely challenging period in the country, the chamber said.
Since last year, with the country facing a serious economic crisis, the business community should have been roped in to a crisis council of sorts with the government to jointly steer the economic ship. But the government decided to rely on its own economic advisors and see where that has got us: Oil supplies coming into the port but no money to pay to clear these consignments!!
Why is it that successive governments have been reluctant to take the business community into their confidence when reaching crucial decisions during crisis periods like the current one that impacts the nation and its people?
The business community after all is a key stakeholder, providing the largest quantum of jobs in the country and the biggest taxpayers in the country through corporate taxes and taxes of employees.
For investors to invest in local industry – there should be a conducive climate to encourage such investments. For example, ad hoc taxation is certainly not the right way (the sudden, one-off taxes are a negative to investment), processes should be streamlined and costs should be predictable unlike in today’s context where it is unpredictable.
Predictable costs and labour laws need to be flexible, one of the reasons renewable energy companies and garment firms here are investing abroad. Not only the ease of doing business, but the cost of doing business need to be radically improved in Sri Lanka. However, the priority at the moment is ensuring the sustainability of business in this crisis of power cuts and how small businesses can keep loan sharks at bay.
It is still not too late – with the fuel crisis spreading into several other months – for the joint chambers to be asked by the government for a short, medium and long term solution to the foreign exchange and energy crisis. The chambers would be willing to lend their expertise in this crisis.
Sipping my second mug of tea brought by Kussi Amma Sera, I was amused by a recent comment by an opposition legislator that very soon Sri Lankan motorists would be asked to pay in dollars at the fuel station – much like the Central Bank saying whoever has foreign cash can import
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