Ceylon Today Editorial

Entrepreneurship

21 October 2016

Two factors came out of Development Strategies and International Trade Minister Malik Samarawickrama's speech at the inauguration of the 37th National Conference of Chartered Accountants organized by the Chartered Accountants of Sri Lanka (CA SL), a body that comes under the President, which took place at the BMICH on Wednesday (19 October).

Speaking of his own foray into entrepreneurship, the minister said that what made it possible was the creation of an enabling environment and of having banks willing to take a risk. What, however, was unsaid was the availability of trade deals that allowed this to happen.

He said that the enabling environment was created after J.R. Jayewardene opened up the economy in 1977, transforming Sri Lanka's commercial landscape, previously run in a closed economy environment, to that which was open for business with the rest of the world.

Samarawickrama said that at that time he was employed at Shaw Wallace and Hedges. He said that with the open economy, he found that there was an opening for him to enter the garment manufacturing and export trade.

However, at that time he was bereft of capital to start his own business. He approached Edgar Gunatunga, a doyen of banking, who was then at Eastern Bank (now known as Commercial Bank) for a loan. Gunatunga asked him, what he could give as collateral. Samarawickrama in reply had said that his 100 cc motor-bike valued at Rs 7,000.

Rs 7,000; big money at that time, was yet, probably insufficient to start a garment business, concerning requirements such as land and building, machinery and equipment, raw material and last but certainly not the least, people, needed to run a business of this nature.

Gunatunga however said, "I will give you funds, but don't let me down." And there was no looking back for Samarawickrama, who has built a successful garment export business under the name 'Hoodvian Group', since. Needless to say, in the interim, Samarawickrama would have paid his loan in full and thereby wouldn't have let Gunatunga down.

Therefore, the 'enabling environment' and a banker willing to take risks, made it possible for Samarawickrama to transform himself from being a hired hand to that of a successful entrepreneur. What the minister however left unsaid in this episode was 'markets'.

One may have entrepreneurship skills, buttressed by an 'enabling environment' and banks willing to take that risk, but if there are no markets, all is in vain.

Prior to 1977, Sri Lanka was a plantation economy, led by tea, rubber and coconut. Among the transformations that took place after 1977 were the entry of new products and services, replacing plantations, as the driver of the economy. One of those new products was garments.

Garment manufacture at that time was dominated by the economies of South-East (SE) and East Asia (EA). Their markets were the West, led by the USA and European Economic Commission (EEC), the forerunner to the current European Union.

The SE and East Asian economies were then shifting from low cost garments to the manufacture of high value products. With labour becoming more expensive in those economies, the opening up of Sri Lanka to the world was a 'win-win' situation for both the buyer and the manufacturer.

With the economic changes taking place in SE Asia and EA, garment manufacturers shifted their facilities to Sri Lanka. And with the Jayewardene Government's strong relationship with the West, it was able to obtain garment exports to the West on a quota (since abolished) basis, which helped the likes of Samarawickrama's Hoodvian Group to enter those markets.

If there were no quotas to the West, that would have been the end of the minister's dream of end-up at least being a garment exporter, catering to the wide world outside.

If the East-West divide prevailing then was exploited successfully by Jayewardene to enter the markets of the West, after nearly 40 years that have passed since, Sri Lanka not only needs new trade deals and the regaining of lost deals such as GSP+ to once more rekindle the spirit of entrepreneurship among its peoples as well as exports, but also new products and services to offer to the rest of the world.

If the 'enabling environment' was created by Jayewardene for the garment industry to thrive, former Central Bank of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal, a previous CA SL President, also seemingly tried to create a similar environment during the Mahinda Rajapaksa regime. At Wednesday's function, CA SL feted its former presidents. However, a conspicuous absentee at this occasion was Cabraal, who said that he's unavailable.

Daily News Editorial

Bandula exposed

21 October 2016

It is the norm in Sri Lankan politics that the government and the Opposition which go for each others’ jugular in and out of parliament close ranks when it comes to the little matter of pay hikes and privileges for their members. The recent move for salary increases to members is a case in point. Even the rathu sahodarayas who howl from the roof tops about waste and profligacy of the government only made feeble attempts at protestation. Only the intervention of VAT forced the government to shelve the proposal.

The same scenario was reenacted by the Joint Opposition with regard to the transfer of duty free vehicle permits by members. JO firebrand Bandula Gunawardena who once famously stated that a family of three can subsist with an income of Rs 2,500 a month, nevertheless felt the lavish salary plus perks he receives as an MP was hardly sufficient to make ends meet. He therefore saw nothing wrong in MPs bartering away their duty free vehicle permits, which some 20 odd MPs were exposed to have done just that recently each pocketing a cool Rs. 25 million. The excuse Gunawardena trots out is that MPs in the present day run into additional expenditure unlike in the past, what with the PR system and all that. He said there was nothing illegal in transferring one’s duty free vehicle permit which had been the practice since JRJ first introduced the measure.

True, the Old Fox did indeed contend that the best way to keep MPs out of corruption’s way is to keep them well heeled and shower them with huge salaries and perks and make them qualify for a pension after only serving five years as parliamentarians. What he did not know or chose to ignore was that salary increases to MPs alone would not keep them out of temptation’s way and there were commissions, kick backs, tenders, liquor licenses and a whole gamut of avenues to keep our erstwhile people’s representatives on the gravy train.

Be that as it may, the comment made by Gunawardena sheds light to another aspect; that is, the cavalier attitude shown by MPs to the squandering of public funds. His argument that MPs need extra money to cover a whole district under the PR system holds no water, given that many MPs who entered parliament through the National List too have transferred their duty free permits, going by the list put out by a former Customs official. Besides, Gunawardena’s JO colleague Kumara Welgama was more forthcoming when he said sometime ago that all MPs “sell” their duty free vehicle permits and he too had done the same. He (Welgama) was candid enough not to take cover behind PR, or any other ruse.

One can only imagine the level of corruption that is indulged in by our parliamentarians in this single effort to justify a swindle by the likes of Gunawardena and when considering that these are our lawmakers, is it any wonder that the cancer of corruption had seeped down to all levels of government nay, society? Gunawardena is after all an Opposition MP and one shudders to think that if a member representing the Opposition can speak in this cavalier fashion about what is after all an act of corruption to what levels would a government MP descend to justify all acts of corruption, not forgetting that Gunawardena is one those always in the media spotlight highlighting real or perceived acts of corruption in the government. Here, we have an extraordinary situation where, when the primary duty of the Opposition is to speak out against excesses of the government and expose acts of corruption, an Opposition MP, who is also a recipient of largess, justifying such a move. Which begs the question, does parliament need an Opposition?

The entire country is aware that our MPs are a pampered lot. In addition to the lavish salaries, perks, luxury vehicles, accommodation, foreign junkets etc. they also partake of gourmet fare in parliament free of charge, the tab picked up by general public. We have never heard of our MPs taking a pay cut during times of natural disasters or other calamities in the country to empathize with the victims, as they do in other countries. On the contrary what the public see are the familiar antics of our MPs in parliament that even make schoolchildren in the Public Gallery run for cover.

It is time our peoples’ representatives act with circumspection and justify their keep at the expense of the public purse. No one will begrudge their privileges and opulent lifestyles, if only they act with responsibility and a sense of duty. Pocketing millions, by the transfer of duty free vehicle permits, is hardly the exemplary conduct one expects from a member of parliament, whatever the justification. It is not only a breach of trust, but a daylight robbery, protestations of its legitimacy notwithstanding. And, when a member of the Opposition, especially one disporting himself as a spokesman against financial impropriety of the government, justifies such an act, tantamount to larceny, it is not difficult to fathom what is wrong in the State of Denmark, read Mother Lanka.

The Island Editorial

It’s curtain-up

21 October 2016

 

The hurly-burly is not done. The battle is yet to be lost and won. Enter Sirisena with Dilrukshi’s scalp in one hand and a toledo in the other, strutting about with stylised steps and looking around triumphantly. On an escritoire richly ornamented with carvings yonder over lies a docket with the acronym, COPE, embossed thereon. Mahendran, drenched in sweat and shivering, is hiding behind an arras. One may have thus described the beginning of the Yahapalana play proper preceded by a number of insipid curtain raisers.

President Maithripala Sirisena has accepted Director General of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) Dilrukshi Wickremasinghe’s resignation letter. The UNP may have sought to land the President in an embarrassing position and make him soften his stand by getting its civil society cronies to condemn his recent swipes at the CIABOC, the CID and the Financial Crimes Investigation Division (FCID) and by causing Dilrukshi to tender her resignation in protest. But, he has proved he is made of sterner stuff.

Those who claimed to have been instrumental in engineering last year’s regime change let out a howl of protest against President Sirisena’s remarks. They condemned what they called a surreptitious move to derail the ongoing investigations into corruption under the previous government. They may have thought the President would buckle under pressure. Cabinet Spokesman Rajitha Senaratne kept on saying until Wednesday afternoon that no decision on the CIABOC DG’s resignation would be taken until Prime Minister Ranil Wickremesinghe returned from Brussels. Senaratune cut a pathetic figure a couple of hours later when it was announced that Dilrukshi was gone.

President Sirisena is being raked over the coals in some quarters for asserting himself at the expense of the interests of the UNP, which he is indebted to for his successful presidential bid. Yes, but for the UNP, which threw in its lot with him, Sirisena would have stood the same chance as a cat in hell in the presidential race. However, it is equally true that the UNP would never have been able to topple President Mahinda Rajapaksa without Sirisena’s help.

Having inveighed against the CIABOC, the President was left with no alternative but to accept its DG’s resignation letter. If he had chosen to do otherwise he would have had to eat his own words as regards his criticism of that institution. A similar situation occurred anent the government moves, a few moons ago, to reappoint Central Bank Governor Arjuna Mahendran under a cloud; the President’s declaration in the run-up to the last general election that he had sought to drum out Mahendran when the first bond scam came to light, effectively foreclosed the latter’s reappointment.

Going by how assertive an otherwise mild-mannered Sirisena has become as the Executive President, what the situation would have been if the UNP’s efforts to enable former war winning, battle-hardened Army Commander Field Marshal Sarath Fonseka to secure the presidency had reached fruition in 2010 is not difficult to imagine. It may be recalled that the UNP also lost control over a tuk-tuk driver representing an independent group it got elected as the Colombo Mayor at the 2006 local government polls following the rejection of its nomination list. Having realised his mayoral dream, thanks to the UNP votes, he refused to toe the UNP’s line and, worse, subsequently, switched his allegiance to the then President Mahinda Rajapaksa.

President Sirisena has said the government would complete its full term and those who expect it to fall before that are only daydreaming. That may be so. The Joint Opposition grandees are licking their chops and the rouges of the former regime are now crawling out of the woodwork. But, all signs are that the architects of last year’s regime change will be able to shore up the ruling coalition. But, the question is whether a government afflicted with the political autoimmune disease, as it were, which causes it to attack itself is capable of carrying out duties and functions expected of it. The SLFP and the UNP in the ‘national unity government’ will have to face another game of chicken when they are required to act on the Committee on Public Enterprises (COPE) findings on the Central Bank bond scams.

Immediately after forming a joint administration last year with President Sirisena, Prime Minister Wickremesinghe likened thier political journey to an expressway ride. We warned in this space that the smooth drive was bound to end and the government had to brace itself for a bumpy ride thereafter. Having hit the rumble strip, it is now heading for a tortuous road full of bumps, dents and potholes.