Kings, cabbages, et al!

President Gotabaya Rajapaksa

JVP Leader Anura Kumara Dissanayake

Former BOI Chairman Sanjaya Mohottala

We noted an ongoing fracas in the BOI, the institution that is created to monitor, promote and develop investments (FDI) in the country. The entire Board of Directors tendered resignations but we also heard that the resignations were not accepted. This sends out many adverse signals. For a country like ours struggling to attract foreign investments at a most needy time to come out of a critical state of the economy, the resignation threat of the BOI bosses signals a very bad notion to the prospective investors. They must be thinking ‘why the hell should we dump our funds in a country where, leave alone anything else, even the body corporate set up to promote investments is not stable?’

Many things in the air which people here are talking about. Some interesting revelations and others repetitions and clichés. I chose to deal with a few dealing with recent developments for the current write up.

Yugadanavi episode embroiled in a midnight episode scandal 

This reminds us of William Shakespeare’s ‘A Midsummer Night’s Dream’. A quick overview of the plot in ‘A Midsummer Night's Dream’ is as follows: “Egeus asks Duke Theseus to uphold an old law that says he can choose his daughter's husband. He chooses Demetrius to marry Hermia. Lysander and Hermia decide to run away together through the woods so that Hermia doesn't have to marry Demetrius.” That is the theme of the plot in the play. The reasoning behind is that the almighty Duke feels that his word should prevail as law.

Another analogue is the folk story behind ‘Pontha Nona’s’ right to do anything she wishes with her body. Nobody could stop her from using water mixed with chilli to wash her private parts! This story is well known among our villagers.

People who come to power with thumping majorities think there cannot be anything opposing their fancies. Hence the springing of the Yugadanavi agreement and the fiasco following it.

There are many facets to the dispute surrounding the Yugadanavi affair. Engineers of the CEB are up in arms on the line of Trade Union opposition, attributing national interest. Certainly trade unions are forerunners in instances of new policy enunciations. Their role in such regard falls within the scope of “unions are partners of social progress”. But in this instance their protest actions against the Yugadanavi devolve into other grievance areas such as the plan contemplated for restructuring the CEB administration. 

For those viewing the matter from outside it appears that the CEB has to invariably introduce some urgent measures to reorganise its operations run into havoc causing a huge debt as a liability to the State and thereby to the people. We may need to write several chapters to explain this state of affairs properly but it would suffice for the current purpose to state that the Treasury, State banks and the domestic debt position are all severely affected due to the operational maladies of the CEB over a long period of time. 

Therefore, the concerns of the CEB Engineers Union against the restructuring plan have to be more fully explained before they engage in any protest campaigns. Otherwise there can be misreckoning regarding their objectives and national interests. Because there are many experiences of unions vociferously opposing reorganisation plans because of their rights and privileges which they would like to safeguard at any cost to the nation or otherwise.

Then come our representatives in Parliament. Some are opposing anything and everything. Certain others who oppose something to secure their precarious standing to prevent the fall of the Sword of Damocles hanging over their head, because of the situation they are facing for something very bad that could happen to some of them without the favour of the Government. Easter Sunday fracas is still hot!

Then there are others who truly want to defy anything that happens bypassing them. This agreement, according to the news, has been brewed, manipulated and entered into disregarding the existence of many whom they presume as important pillars in the Government structure. They have chosen to oppose it knowing very well that it is as risky as for them for the Government to overlook them. It is also possible that they are a part of a power struggle inside, best known to them and so prompted.

There is also a group hell-bound to provoke the elimination of appendages of the Government by inciting them to oppose the agreement so that they will be stronger in the Government once the victims leave. 

The grand finale of the matter was the tabling of a copy of the agreement hitherto remaining behind closed doors by JVP Leader Anura Kumara Dissanayake in the Parliament during the Budget debate. 

But what transpired was not as dramatic as it was expected to be. Other than to pinpoint one major aspect relating to this agreement that there is a non-disclosure clause in that, he failed to highlight any adverse terms or conditions embodied in the agreement that is harmful to the nation or the national interest. 

This is not the first time that the Government has entered into agreements with international companies as investors on 49-51% sharing basis. There cannot be anything so detrimental in that. But what is important is if there are any conditions that are against the sovereign rights of the country or going against the broader public interest. The failure to highlight any of those leaves us with many questions unanswered.

There are many facets to the dispute surrounding the Yugadanavi affair. Engineers of the CEB are up in arms on the line of Trade Union opposition, attributing national interest. Certainly trade unions are forerunners in instances of new policy enunciations. Their role in such regard falls within the scope of “unions are partners of social progress”. But in this instance their protest actions against the Yugadanavi devolve into other grievance areas such as the plan contemplated for restructuring the CEB administration

Foreign exchange crisis and reserves position

Many critics from the Opposition kept on hitting at the fact that the country’s foreign reserves have reached an unprecedented low. But here again they failed or ignored to spell out their alternate options except to reiterate their ex-boss’s view of suggesting to seek solace in the IMF. 

Wickremesinghe, as is well known, will have no qualms about the matter because of his inclinations to the West, come what may. But there is no logic in trying that as the remedy of the last resort when we can effect or attempt to effect some measures with long-term benefits through possible inward domestic adjustments. If we can use our bilateral arrangements to sort out matters, no one can blame.

But the CBSL has to review the foreign remittances from those employed abroad by offering meaningful incentives to promote official inward remittances. An incentive will be effective and attractive only if it provides concessions out of the normal. There is no logic in pushing them to chase behind Rs. 8 or 10 more when the sharks outside are ever ready to offer about Rs. 30 to 40 per US$.

Laws and restrictions play a secondary role; as we are aware, orderliness has to be in place before everything else. In this modern world with digital operations people have many avenues if they do care about how they should transact or deal with their hard-earned earnings. It was a welcome move by the Governor to explain the current requirement of converting foreign exchange balances in the accounts of local banks which the commercial banks have been mishandling. The need to convert the balances applies only to export earnings and investment funds. Even in the case of export earnings there is leeway for the exporters to utilise the monies for their raw materials, etc. for future productions.

We remember the time Dr. N.M. Perera as the Minister of Finance introduced the Convertible Rupee Account system. If you bring in 100 net you are entitled to use 25 without any restrictions at your wish. This was a good scheme because it provided some relief to genuine foreign exchange earners.

Our public service is one of the most poorly paid sectors. It is also ipso facto a most poorly performing sector. If the country has to move forward what is required is not to fatten this white elephant any more but to make full use of it looking after their welfare as well as improving their performance. I for one hail and appreciate the concerns expressed by the Finance Minister about this need and look forward to immediate drastic action in this regard. I trust that the Government will seriously address the National Wage Policy issue and bring some uniformity in the salary structures of all public sector bodies without any distinction of whether they make profits or not

Government service

In this country any reference to certain areas, however justified or in whatever context, cause or are made to be controversial statements. The recent reference to the public sector employees by the Finance Minister is such an example. 

There was a big furore following his reference. Some said it is a belittling of the public sector employees. This is real balderdash. The public sector of this country is badly in need of a complete revamping. Few dare to touch this or even talk about it. I am personally aware that the topmost authorities are well aware of this but are scared to initiate any action. Let us follow Newton’s 3rd Law in this regard: “Every action has an equal and opposite reaction.” Similarly for any thesis there will be an anti-thesis.

I once met a President and told him there is a big need for a National Wage Policy because of certain serious irregularities in the wages and salaries structures in the country. I mentioned a few places where the wages and salaries were extremely disproportionate with the rest of the State sector although they too were SOEs (highly loss-making). To my extreme delight and surprise this President complemented my view by mentioning a few other places that he knew to have this aberration. I requested him to initiate some action during his tenure. But, alas, what was happening happened.

Our public service is one of the most poorly paid sectors. It is also ipso facto a most poorly performing sector. If the country has to move forward what is required is not to fatten this white elephant any more but to make full use of it looking after their welfare as well as improving their performance. I for one hail and appreciate the concerns expressed by the Finance Minister about this need and look forward to immediate drastic action in this regard. 

I trust that the Government will seriously address the National Wage Policy issue and bring some uniformity in the salary structures of all public sector bodies without any distinction of whether they make profits or not. 

We have a Land Reform Commission owning tens of thousands of acres of land idling for several decades, the exact locations of which are not clear even to some of the officials. It is a national treasure which cannot be valued. If developed we need not import any agricultural products into this country. The actual plight is investors will have to go round or go through a broker who will find land for them. BOI was deaf and blind about these ground realities. Problem with them was they are not sensible and practical people having their feet on the ground. Recruiting specialists paid millions will have hardly any effect. You can never develop this country without addressing the resource base specially our invaluable wealth in land

Investments and BOI

We noted an ongoing fracas in the BOI, the institution that is created to monitor, promote and develop investments (FDI) in the country. The entire Board of Directors tendered resignations but we also heard that the resignations were not accepted.

This sends out many adverse signals. For a country like ours struggling to attract foreign investments at a most needy time to come out of a critical state of the economy, the resignation threat of the BOI bosses signals a very bad notion to the prospective investors. They must be thinking ‘why the hell should we dump our funds in a country where, leave alone anything else, even the body corporate set up to promote investments is not stable?’

Secondly, the refusal to accept their resignations and requesting them to continue in their posts indicates that from the Government’s point of view their performance is okay but from the point of view of the BOI bosses the Government is not reciprocating to what they want.

We do not know why the Government wants them to continue but the public view and the performance record available to the country is far from satisfactory. The BOI is one place which has miserably failed in the basics to revamp the country’s economy. Its failure became obvious and visible during the period of the pandemic. The agricultural produce, the transport systems and distribution mechanisms, non- availability of large-scale well-organised agricultural products and producers caused havoc and continuing to affect the livelihood, inflationary trends and basically the food security of the country. 

There is a wide spectrum and a multifaceted scope which the BOI never addressed looking at the future of the country. I have witnessed many times investors being sent away or discouraged due to the want of land for development. Despite repeated requests being made in this regard the BOI has failed to date to provide a Land Bank data base that is available for development.

Once at a meeting several years ago when I heard a prospective foreign investor being told that the BOI was unable to provide his land requirement, I had to jump in and challenge the sitting authorities, “Give me one week, I will give you thousands of acres of land suitable for development activities within a radius of 50 miles from Colombo.”

We have a Land Reform Commission owning tens of thousands of acres of land idling for several decades, the exact locations of which are not clear even to some of the officials. It is a national treasure which cannot be valued. If developed we need not import any agricultural products into this country. 

The actual plight is investors will have to go round or go through a broker who will find land for them. BOI was deaf and blind about these ground realities. Problem with them was they are not sensible and practical people having their feet on the ground. Recruiting specialists paid millions will have hardly any effect. You can never develop this country without addressing the resource base specially our invaluable wealth in land.

Instead of focusing only on the highly-sophisticated areas, let there be new thinking and a new approach to study, examine and implement development programs in keeping with our culture, environment and future human trends.

To make a long story short, the President’s announcement of looking into the prospects of harnessing and developing the higher education system with private sector investments is a welcome move to address many of our present day as well as future needs. But he will need the services of some who are living with a common touch to successfully implement such a program. Otherwise the same fate that befell the fertiliser issue will be repeated.