Tag Archives: sri lanka

Sri Lanka: a nation suffering from ‘Enforced’ Poverty

It is now 66 years since we gained independence, and what do we have to show for it?  Nothing much, really.  In part, this is due to a bloody war that lasted for 27 years and brought development to a standstill. No one in their right mind would invest in this country.  Those days are now behind us and we are on the path of development with foreign investments tricking in.  But, I opine that we could do much, much better as a Nation.

What is Enforced Poverty?  It is a phrase that I coined whereby the masses of the country have been indoctrinated by those in power into believing that the life they lead is unchangeable and that their younger generation will have a greener, more luxurious, brighter future.  They will strive on, firmly entrenched in poverty or the borderlines of it and will not challenge the status-quo.

Let us take as an example the typical family.  The father is a teacher or a government servant.  The mother is a housewife.  They have a son and a daughter who are both schooling.  Let us say one is studying for the ordinary level exam, and the other for the advanced level exam.  Let’s estimate the monthly household income to be Rs. 40,000.

With the cost of living as it is, rent and electricity would be at least 10,000 for someone in a suburban area. Monthly bill for essential groceries would be at least 7,500. Milk powder alone is now 386 for a 400 gram packet.  Fees for extra classes for the kids would be another 5,000 and transport for the kids and the parents via bus and the occasional three wheeled taxi would be another 4,000 maybe?  Father would probably have a mobile phone for emergencies and would cost him at least 500 a month.  A gas cylinder for the kitchen would be 2,500 every two months, and the miscellaneous expenses would also add up such as clothing and shoes, medical bills, and etc.

Buying a motor cycle let alone a car for this family is all but a dream. An average motor cycle is 150,000 and the cheapest car would be the Tata Nano, and it costs 1,400,000 here in this country.

Now we get to my point about enforced poverty.  Even if this family earns just 40,000 does that mean that they cannot have a reasonable quality of life? Poverty is enforced on them simply because of our notion of the greater good. More on that later.

Let’s see if we can get this family to buy a Tata Nano.  The cost is 1,400,000. Assume the upfront payment is 200,000 and that the balance 1,200,000 goes on a lease.  Car leases are on average 2250 per 100,000 borrowed over 5 years, which comes to 27,000 per month.  Insurance would be 20,000 per year, and we would have to add on the cost of fuel and maintenance as well.  As you can see, our teacher cannot afford this, due to enforced poverty, due to government policy.

A brand new Tata Nano 2014 model costs 234,000 in India. At an exchange rate of 2.08 that comes to 486,720 locally.  A Maruti 800 costs 238,000 in India, which is 495,040 locally.  A Fiat Punto is 500,000 and a Fiat Linea is 600,000.

Tata Nano, Starting at 100,000 when launched

Tata Nano, Starting at 100,000 when launched

Fiat Linea, Starting at 599,000 INR

Fiat Linea, Starting at 599,000 INR

If the Indian price were to be taken for the calculation above, the Tata Nano could be bought for a 100,000 down payment and the balance as 8720 in 60 months.  Wouldn’t that enhance the quality of life, and also lead to a happier nation? Now for what I said about the “greater good”.  There would be those that counter my argument by saying reduced taxes and duties resulting in lower prices for vehicles will mean more congestion on the roads and more pollution.  Maybe.  But where’s the alternative in that case? Has adequate planning and funding gone into our public transport system? Going in the morning and coming in the evening via the bus is a circus act and a battle with death, when we see the people packed in and also hanging from the foot-boards and doorways of the buses.  Do the buses run on time and as scheduled? Let’s not even talk about the mess with private and public buses operating on the same roads therefore resulting in deadly races.

If vehicle prices are being kept at these extraordinarily high levels for the sake of reducing pollution and congestion as suggested by some, then why is it that Vehicle Permits are issued to politicians, ministry secretaries, doctors, etc?  Why should they receive a benefit that the common citizen does not?  Don’t they work as hard? Don’t they pay their taxes too? Isn’t that considered to be discrimination and a violation of their fundamental rights?

Let’s take another example.  In the beginning of February we saw the price of Dhal coming down due to the reduction of import duty of Rs. 15 per kilo.  Few days later, import duty on Potatoes were increased by Rs 15 per kilo.  Powdered milk was in short supply in January as the importers were saying that the duties are too high and that they cannot sell and make a profit.  The Government is refusing to reduce the taxes and duties and allowed the prices to be hiked up.  The justification given by the Minister of Consumer Affairs was that the duties are kept at a high level to protect the local milk farmers.  But, do we have an effective mechanism to distribute fresh milk in this country?  Can’t we be self sufficient in milk without having to import from New Zealand?

Here’s another example.  The leader of the JVP, Anura Dissanayake was recently giving an example and stating that construction of the Mattala Airport took 25000 Million Sri Lankan Rupees, which is 25 billion Rupees, or 209 million USD.  The cost to maintain our world record setting battalion of Ministers is 27 billion Rupees per year!  There are 67 Cabinet Ministers and 37 Deputy Ministers which is a total of 104 for a population of 22 million.

India with a population of 1.1 billion people has got a cabinet of just 35 ministers.  China with a population of 1.3 billion has just 20 ministries.

Just imagine the type of development that could take place in Sri Lanka each year if we cut the number of ministers by half.

I’m not a professor of economics, nor do I pretend to know everything there is to know in finance, but I do believe that there is a lot of room for improvement in our country and in our quality of life.  Meanwhile, the teacher in my story and his family are destined for a life of hardship.  The mother and father will accept their standard of living and strive to give a better education to their children with the hope that they will have a better life than them.

Why Sri Lanka will not be a Developed Nation even by 2030

Sri Lanka has ambitious plans for development and we see many infrastructure projects either completed or nearing completion or planned for the near future.

So why do I say that we will not be a developed nation in the 1st world?  Simply because it is not only the infrastructure that makes a country and her people developed, but the attitudes and actions of them as well.

Let’s examine the factors against us.

Road Use

We have well constructed roads for the most part when you consider the major highways, but the way we use them leaves a lot to be desired.

Even the first expressway to be opened has seen more than a 1000 accidents since it opened little more than a year ago, and many have died.  Most are due to use of non-roadworthy vehicles and also excessive speeding.  Only a few travel at the stipulated speed of 100 KPH, and most go at 120 to 150.

On the highways, we don’t stick to the lanes, we regularly run the red lights when the cops are not watching, the infernal three wheelers and other slow movers are always on the right lane or on the middle of both lanes and will unhappily move out of your way and give you a dirty glare after we blast our horns.  Most of these three wheelers do not have working lamps at the rear and even if they did, they do not use the turn signals.  Motorcyclists also do not believe in lighting at the rear, and they don’t believe in helmets for their passengers either.  Mom and Dad are often seen with helmets but their kids have nothing.  Can this be explained in any sensible way?  Safety of your loved ones should be the supreme requirement.  Then we have the private buses that go on their races.  Horns blaring, swerving from side to side, cutting into traffic all of a sudden, or suddenly stopping in the middle of the road when they see a passenger.

India also has a public and private transport mechanism which has lead to very unsafe roads.  Countries like Singapore and Malaysia on the other hand, do not have this.  Having private bus operators creates unnecessary competition which ultimately results in unsafe conditions.  Lease the buses from their owners and take them into state control.  This will definitely improve the standards and the people’s confidence in them as well.

The non-roadworthy three wheelers should also be removed from the roads and shipped off to Africa where there is still a heavy demand for them.  They can be replaced with small cars which are equally economical.

Use of the roads should then be policed according to the law.  An article I wrote previously would be applicable here, and the Police department could have a good revenue generation as well.

Rule of Law

A pick-pocket or drug dealer or other criminal that is caught is swiftly taken in to custody and swiftly prosecuted with the heavy hand of the Law thrown at them and they either pay fines or land in jail, or both. Those with connections either avoid arrest all together, or end up in the hospital without going to Jail.  There are several notable incidents that most will remember.

What about the drug lords that supply the dealers?  Why can’t we go after them, the big killer whales rather than going after the small-fry?  What about all of the corruption that we see all around us?  Public Money being wasted on unnecessary and frivolous things which could have been used in a much more productive manner?  Why does this happen? Simply because we do not have accountability and they enjoy immunity and selective prosecution.

Politics & Accountability

The political system we have here is a right royal farce which gives us some entertaining moments but sadly at what cost?  Each party that comes into power plays the blame game for all the problems, and takes the credit for all the achievements.  Notable countries have minimum requirements for politicians such as a basic Graduate qualification and Post-graduate qualifications in your specialisation area.  I’ve heard, but not verified, that most of our politicians are just O/L or A/L qualified.

In the UK, some MP’s travel via the bus and train and walk among the common man.  They have the finger on the pulse.  In our country, how easy is it for you to meet your local political representative?  In the UK, the Government appoints the Ministers, and the Opposition appoints Shadow Ministers.  The Shadow Minister’s job is to monitor all the activities of the Minister and report and point out via parliament if there are any issues.  If any serious issues are uncovered, the Minister takes responsibility and resigns.  If not, the oversight committee of the parliament will impeach you.

In the UK Parliament, they still boo and jeer once in a while but everyone talks with respect. When answering a question, they refer to each other as “As my Right Honourable Member of Parliament pointed out, …” whereas here in Sri Lanka we avoid answering the question and say something else and make sure to call the other person MODAYA (Fool), GONA / HARAKA (Bull, Cow), THAKATHEERUWA (Imbecile), and other colourful words not uttered by civilised people.  If you don’t believe me, go to YouTube and search for “Sri Lanka Parliament”.

Over Taxation & Waste

Government coffers are supplemented with taxation on pretty much everything, and the people have a massive burden on them.  Basic commodities are also taxed heavily resulting in a high cost of living.  Vehicles are taxed anywhere from 100% to 300% on their value making a vehicle just a dream for many.  A basic Toyota Corolla starts at $12,500 in the US which is approx 1.6 million rupees.  The selling price in Sri Lanka is over 7 million due to taxation, which is more than $50,000 – for that price I could buy a pretty good Mercedes or BMW or Audi.  The cheapest car in the world is the Tata Nano which is approx $1000 or 125,000 Indian Rupees.  It costs 1.2 Million here (more than $9000).

Doesn’t the average Sri Lankan family deserve the opportunity to have a better quality of life rather than risking life and limb trying to balance a family of four on a motor cycle, simply because that is all you can afford?  The high taxation is justified by the people that control it, saying that it helps curb the outflow of foreign currency, and reduces the stress on the roads due to congestion.  In that case, why give Permits to government officials to import these vehicles at a lower cost?  Why should government officials travel in better and safer vehicles whilst the common man is condemned to hardship?  Our mindset is also manipulated by calling the classier vehicles as “Super Luxury” whereas in Europe even the taxis and police cars are Mercedes E Class and BMW 5 series.

Mihin Air has been a financial disaster from day one, and the time is right to admit we made a mistake.  It should be scrapped and merged with SriLankan.  If the requirement is to offer budget air travel to the average Sri Lankan traveler, they could be given subsidised tickets on the national carrier.  It could be a CSR project of SriLankan Airlines and it would still not cost as much as having another airline.  Tickets to pilgrims could be allocated on a quota basis much like the Islamic pilgrimage to Mecca which is based on quotas.

Religious Tension

A point that is unfortunately exploited when attention needs to be diverted away from more pressing issues, much like the Grease Yaka which appeared when necessary and then disappeared with a simple explanation when not required anymore.  People of Sri Lanka have lived as a mix of religions for generations and although we have had a few hiccups along the way, in general we live peacefully.  Unfortunately, we have some “buttons” that are masterfully pressed by a few.  Unverified statements are enough for us to go on a rampage and destroy everything.  We hire people for picketing campaigns and agitations by paying a daily fee and giving food and drink, and they know not what they are shouting for.

Now for the factors in our favour.

Literacy and Skills

Sri Lanka has enjoyed a high literacy rate over the years and our labour force has the ability to learn and adapt quickly.  However, we should minimise focus on domestic workers and machine operators, and instead focus on knowledge based workers who are capable of generating greater inflows of cash.  We cannot and should not stop the other fields, but we should throttle it down.  Sri Lanka should not be known as a nation of servants and maids.

Perseverance

Sri Lankans are a strong nation with the capability to bear a lot of hurt and discomfort and persevere.  Surely we can use this to our advantage and shift the direction and speed of our country’s development.

Strategic Location

Sri Lanka is ideally situated a midst major shipping lines and the new Harbour and Airport should help convert us into a major trans-shipment hub in the future.  Expanding the Colombo port to be able to cater for Class E Ships was a major step in the right direction, and hats off to the government for having got that implemented.

Practice has shown us that simply having the new ports does not work and there needs to be better policy and fiscal management to attract major players.  Emirates is a major player in the airline industry and we should try and get them to setup a base of operations at Mattala. They have A380 aircraft that could use this facility.  If they are unwilling, due to the bad experience they had with the SriLankan (Air Lanka) partnership, we could invite Lufthansa which is the largest airline in Europe.  They recently placed the largest single order for new aircraft and said that their emphasis is to break into more of the long haul Asian routes.  Air Asia is one of the best budget airlines in the world and operates from Malaysia.  Mattala in Sri Lanka could be a regional hub for them as well.

Tourism Hub

One thing that the Government has properly identified is that Tourism is a key income earner for Sri Lanka.  More will come, but we have to ensure that we encourage the proper type of visitor to come.  Most of our numbers are now Indian and Chinese, but these are not the big spenders.  They come mostly for business, and a few come as tourists.  Then there are those westerners who come and stay in small joints at Negombo and Hikkaduwa.  They are also not spenders.  What we need are high spending tourists.  They have certain requirements that we need to fulfill.

  1. They require daytime activities such as sightseeing and shopping.  There are plenty of sights to see, but the shopping centres need improvement.  More shops and more choices and less prices are needed.  Theme parks such as Disney World, Universal Studio, and etc are required.  Just putting a park will not attract customers.  The big brands have the ability to draw visitors.  Set it up outside of Colombo on cheap land and setup a high speed rail network to link it to the major cities, like Sentosa in Singapore or Genting in Malaysia
  2. They require nightlife activities such as Casinos and Clubs, which should be regulated and safely maintained.
  3. Transport – Have a monorail network in and around Colombo which can act as a sightseeing tour by itself, or which lets the people access the main places of interest and shopping areas.  A subway is too costly and time consuming to construct.  A monorail suspended above the roads would be attractive and efficient.  Again, we can learn and borrow technology from Singapore and Malaysia.

A Friendly Nation

We are known world over as a hospitable nation with a friendly personality.  If someone comes to your home we always offer a drink and a bite to eat.  if you come during a meal time, we would offer you lunch or dinner, even if we have only a little for ourselves.

We will go out of our way to help someone, you ask us about a place, we might take you there.  You stop us on the road and ask for money or food, and we will oblige.  If you ask us something and we don’t know, we will ask someone else and tell you.

Can we develop as a nation? – I see the potential. Do you?

Sri Lankan Firsts

Although I have not verified this information, I believe it is of an interesting nature.  Therefore, my inaugural post shall be inspired by it.

  1. First country in the world to have established a dedicated hospital (Mihintale, 4th century BC)
  2. The world’s first recorded wildlife sanctuary was at Mihintale. It was established by King Devanampiyatissa in the 3rd century BC.
  3. Oldest country in the World within its present borders (the island of Sri Lanka existed as a independent sovereign country as far back as the 4th century BC)
  4. First female monarch in an Asian country, Queen Anula (47-42 BC)
  5. First country in the World to have a female prime minister (Sirimavo Bandaranaike, July 21, 1960)
  6. Longest period of continuous multi-party democracy by a non-western country (1931-present)
  7. World’s leading exporter of tea; Ceylon tea is famed to be one of the best teas in the world.
  8. World’s leading exporter of cinnamon; exported to Egypt as early as 1400 BC
  9. First country in South Asia to start radio broadcasting with Radio Ceylon – celebrated 80 years in Broadcasting on December 16, 2005
  10. First country in Asia to fly the Airbus A340

Sri Lanka is a country with a rich and colourful heritage.  We have survived as a nation because of the rich culture that we have.  Especially at times like these, please think twice or maybe even trice before taking any action.  Do not let your emotions control you, and do not become puppets in the agendas of others.  Sri Lanka is a multi religious multi ethnic country.  That doesn’t mean that you should bow down and let things happen, but there is a right way and a wrong way to get things done.  Use the right way, and things will be all right.