Indian model Poonam Panday has promised to strip if India win the world cup.
As if India needed any further encouragement.
Realistically, I think the odds are on an Indian win. I thought that it was their batting that Sri Lanka would need to worry about, but their bowling yesterday was very impressive. Harbhajan Singh bowled some mesmerising deliveries, including the one that took Umar Akmal's wicket, while Nehra and Khan also looked dangerous.
Anyway, we now have just cause to celebrate if India wins.
Thursday, March 31, 2011
BC and AC
No, not AC/DC.
Historians use BC (before Christ) and AD (Anno Domini or the year of our lord) to refer to different eras of time.
Given the extent to which England's summer game has taken over life in Sri Lanka I think we should use AC and BC; After Cricket and Before Cricket. We can use it to measure the day, instead of AM and and PM.
BC is the few hours before noon when hangovers from the previous game are nursed and whatever shopping for drinks, snacks and other essentials for watching the next match takes place.
Offices may be visited, just to check if the boss is around before haring off to find a tout willing to sell a ticket to the match. In the event the boss is in, people will hang around impatiently, sneaking furtive glances at the clock until he leaves. Strangely, salesmen have many external meetings with clients these days so they have to be out in the field, the office staff have important meetings with bankers, auditors, the tax men and the municipal authorities. Everybody is really busy and can't even answer a phone call, although they are not in the office.
AC is when the streets are deserted and the power consumption zooms as a million television sets are switched on.
The fever has even infected even such resolutely anti-cricket creatures like myself.
Need to see if I can find a cheap ticket for the finals for a friend. Last I heard tickets were going at US$650. Does anyone know if its possible to get anything cheaper?
Historians use BC (before Christ) and AD (Anno Domini or the year of our lord) to refer to different eras of time.
Given the extent to which England's summer game has taken over life in Sri Lanka I think we should use AC and BC; After Cricket and Before Cricket. We can use it to measure the day, instead of AM and and PM.
BC is the few hours before noon when hangovers from the previous game are nursed and whatever shopping for drinks, snacks and other essentials for watching the next match takes place.
Offices may be visited, just to check if the boss is around before haring off to find a tout willing to sell a ticket to the match. In the event the boss is in, people will hang around impatiently, sneaking furtive glances at the clock until he leaves. Strangely, salesmen have many external meetings with clients these days so they have to be out in the field, the office staff have important meetings with bankers, auditors, the tax men and the municipal authorities. Everybody is really busy and can't even answer a phone call, although they are not in the office.
AC is when the streets are deserted and the power consumption zooms as a million television sets are switched on.
The fever has even infected even such resolutely anti-cricket creatures like myself.
Need to see if I can find a cheap ticket for the finals for a friend. Last I heard tickets were going at US$650. Does anyone know if its possible to get anything cheaper?
Tuesday, March 29, 2011
Friends in trouble
These are dark days, trouble has been brewing in the Near East and Maghreb for some time. The nation has many friends in the region and we are always quick to support our friends, yet we are constrained, we do not want to end up on the wrong side of history, or perhaps just the wrong side of whoever takes over. The region absorbs a lot of the migrant workers and tea exported by the nation.
Managing this balancing act is tricky. Given the rapidity with which the trouble has spread, many a ruler will sleep rather uneasily or, like Bahrain be prompted to pre-emptive action.
So what does Mother Lanka do? Banishing the topic to the back pages and making only passing reference to it in the television news works for a while but with cable television it is a little difficult to pretend all is well for long. Luckily the cricket is creating a considerable distraction.
As we cannot not show our hand openly, we must be careful and bide our time. However when that familiar villain, the bad old US of A makes and appearance on the scene we can safely move to the offensive, lo-and-behold, the press is now full of news and commentary on the evils of the US/NATO intervention. The favourite hobby horses of the columnists from double standards to on neo-colonialism and everything in-between can be dusted off and ridden in the Derby once more.
What preceded the intervention and the bigger issues can safely be ignored, while the favourite straw men can be demolished.
Managing this balancing act is tricky. Given the rapidity with which the trouble has spread, many a ruler will sleep rather uneasily or, like Bahrain be prompted to pre-emptive action.
So what does Mother Lanka do? Banishing the topic to the back pages and making only passing reference to it in the television news works for a while but with cable television it is a little difficult to pretend all is well for long. Luckily the cricket is creating a considerable distraction.
As we cannot not show our hand openly, we must be careful and bide our time. However when that familiar villain, the bad old US of A makes and appearance on the scene we can safely move to the offensive, lo-and-behold, the press is now full of news and commentary on the evils of the US/NATO intervention. The favourite hobby horses of the columnists from double standards to on neo-colonialism and everything in-between can be dusted off and ridden in the Derby once more.
What preceded the intervention and the bigger issues can safely be ignored, while the favourite straw men can be demolished.
Saturday, March 26, 2011
Rulers and resources
The rulers of a country would be expected to rule for the benefit of its people. Whether this happens or not is largely dependent on how far the rulers are held accountable.
The degree of accountability is dependent on the amount of information available to the public, the extent of the separation of powers (between legislature, executive and judiciary), the independence of its civil administration and the ability of the public to boot out bad rulers.
In a nutshell, how good a ruler is depends on how far he can be held in check, without proper control the ruler is likely to give into the temptation to enrich himself and his close associates rather than the population at large.
People used to think that wealth was dependent on resources. If one is lucky enough to be born in a resource rich nation, Australia for example, the original 'Lucky Country', then its people would prosper. Experience has taught us that unless a resource rich country has proper systems of governance its resources are likely to turn out to be a curse rather than a blessing; Nigeria, the Congo and Angola are examples of nations that have suffered the curse of natural resources.
All this is well known, but lets examine the plight of budding despot in a resource poor country. What is available for plunder?
The most obvious target is the treasury. Whatever taxes are collected from the people can be diverted to his own bank accounts. Even in poor countries this can amount to a fairly sizable sum, but this alone is unlikely to satisfy.
Looting funds received from aid agencies is possible but it is not easy because there is some attempt to assess the effectiveness of projects and nosy NGO workers asking too many questions are such a pain.
Far better then to borrow, either straightforward commercial loans or subsidised project finance, ostensibly for building infrastructure but divert the funds to the coffers of the ruler. With no particular obligation to account for the money other than repay it on time, this is an easier path to follow. Every so often debt default can be arranged, Argentina, Turkey and Russia have done so at various times which makes this even more lucrative in the long term. Ruling however is an expensive business and not even this will satiate appetites in the long term.
Once all these paths are exhausted the ruler is left with only one further option: land. Land has value and some poor countries have vast extents of it, but unlike other natural resources that can be exported to markets abroad land cannot be moved. Its value is dependent on what a developer can earn through its exploitation. Land can easily be expropriated and productive farmland or developed industrial land is a good place to start, but these will be quickly exhausted, which leaves only undeveloped land. This can also be exploited, but there is a catch.
Certain pieces of land, a location for a good harbour or airport, may derive a part of its value from its use to international trade but by and large it is the strength of the domestic economy or market that will determine the value of land, which is in turn dependent on the quality of governance. Also if the dictator has already expropriated farmland or industrial land, this is likely to give potential buyers pause for thought.
The colonial government in Hong Kong was able to balance its budget for years by selling off bits of bare land every so often to developers. Thanks to sound economic prospects, developers were quite willing to pay good prices for land. To an extent this happened in Singapore as well.
Therefore any ruler salivating at the prospect of getting rich through the sale of land would be advised to think again. The land will fetch some value but to command a premium, potential developers need to see some realistic prospect of recovering their investment, which is good news for its people, provided the despot understands the issue addresses the fundamental economic questions. Those who don't may well end up building another Burj Khalifa (Dubai, pictured above) a half mile high 'ghost' building, with many empty floors.
As for the ruled, its the governance, not the resources that count in the long run.
Friday, March 25, 2011
America's flawed democracy
I no longer spend any length of time attempting to analyse US policy. Not that there are no knotty issues: there are plenty from the high cost of healthcare, to gun control to Israel.
The issue is that it is impossible to hope for any kind of sensible action, the politicians being held hostage to various special interest groups. It is impossible to hope for proper reform of healthcare without reforming the tort laws, under which ridiculous levels of punitive damages are awarded. Medical malpractice is a favourite area, giving rise to the spectacle of ambulance chasers, lawyers who follow victims and persuade them to sue heavily in return for a share of the spoils.
My cousin is a doctor who practises in California. She pays a third of her salary as medical malpractice insurance, to ensure she is not driven bankrupt by an ambulance chaser. All doctors do this and the cost of the insurance eventually finds its way into the medical bills of patients by way of higher doctors fees.
This is just one aspect, there is a lot more but serves to illustrate the nature of the problem.
America's problems of terrorism and its alienation from the Muslim world are at least partly due to its support of Israel. Solving the problems in Palestine will go a long way easing the visceral dislike that the US tends to invoke amongst ordinary Muslims, which serves as a lightning rod for extremists. Can this ever be solved? No, as long as a minority, the Jewish lobby, controls the discussion, via influence wielded over the politicians.
The same sorry story is repeated ion the area of gun laws. The majority will support a tightening of laws but this is stymied by the power of the NRA, which is a minority.
Thus democracy in the US is not so much about the will of the people as the will of the lobby group, which often represent minority interests. The root of the rot is actually in money, the time honoured root of all evil. Special interest groups literally buy influence, by funding the election campaigns of politicians.
Therefore unless campaign funding is reformed we cannot hope for any sensible discussion. The type of reform needed is not transparency alone, what is needed to clean this Augean Stable is nothing less than a total ban on private campaign funding. Instead the State needs to allocate a fixed amount of funding to each candidate. Any overspending or raising private funding will be an automatic disqualification.
The taxpayers will need to pay for the campaign funding for each qualified candidate, but this will work out far cheaper in the long run than allowing the country to be held hostage to special interest groups.
If this ever happens the rest of the world will only applaud.
The issue is that it is impossible to hope for any kind of sensible action, the politicians being held hostage to various special interest groups. It is impossible to hope for proper reform of healthcare without reforming the tort laws, under which ridiculous levels of punitive damages are awarded. Medical malpractice is a favourite area, giving rise to the spectacle of ambulance chasers, lawyers who follow victims and persuade them to sue heavily in return for a share of the spoils.
My cousin is a doctor who practises in California. She pays a third of her salary as medical malpractice insurance, to ensure she is not driven bankrupt by an ambulance chaser. All doctors do this and the cost of the insurance eventually finds its way into the medical bills of patients by way of higher doctors fees.
This is just one aspect, there is a lot more but serves to illustrate the nature of the problem.
America's problems of terrorism and its alienation from the Muslim world are at least partly due to its support of Israel. Solving the problems in Palestine will go a long way easing the visceral dislike that the US tends to invoke amongst ordinary Muslims, which serves as a lightning rod for extremists. Can this ever be solved? No, as long as a minority, the Jewish lobby, controls the discussion, via influence wielded over the politicians.
The same sorry story is repeated ion the area of gun laws. The majority will support a tightening of laws but this is stymied by the power of the NRA, which is a minority.
Thus democracy in the US is not so much about the will of the people as the will of the lobby group, which often represent minority interests. The root of the rot is actually in money, the time honoured root of all evil. Special interest groups literally buy influence, by funding the election campaigns of politicians.
Therefore unless campaign funding is reformed we cannot hope for any sensible discussion. The type of reform needed is not transparency alone, what is needed to clean this Augean Stable is nothing less than a total ban on private campaign funding. Instead the State needs to allocate a fixed amount of funding to each candidate. Any overspending or raising private funding will be an automatic disqualification.
The taxpayers will need to pay for the campaign funding for each qualified candidate, but this will work out far cheaper in the long run than allowing the country to be held hostage to special interest groups.
If this ever happens the rest of the world will only applaud.
The consequences of America's gun and drug laws
An interesting comment in the Economist "As long as Latin American narco-lords find it easy to sell cocaine and buy guns in the United States, no government to south can eliminate them".
Are the real consequences of America's non-laws on gun ownership and a wrong headed drugs policy, the drug wars in Mexico?
I have argued before that the only sensible way to deal with drugs is legalise them. No drug cartel can ever hope to compete with a state that distributes the stuff free. Prohibition did not stop alcohol abuse in Chicago in the 1920's and spawned the Mafia.
Prohibition was apparently inspired by the 18th amendment to the US constitution which outlawed alcohol. Common sense eventually prevailed and the experiment was dropped in 1933. Time to revisit the second amendment?
Note: The second amendment protects the right of the people to keep and bear arms.
Are the real consequences of America's non-laws on gun ownership and a wrong headed drugs policy, the drug wars in Mexico?
I have argued before that the only sensible way to deal with drugs is legalise them. No drug cartel can ever hope to compete with a state that distributes the stuff free. Prohibition did not stop alcohol abuse in Chicago in the 1920's and spawned the Mafia.
Prohibition was apparently inspired by the 18th amendment to the US constitution which outlawed alcohol. Common sense eventually prevailed and the experiment was dropped in 1933. Time to revisit the second amendment?
Note: The second amendment protects the right of the people to keep and bear arms.
Thursday, March 24, 2011
Just a Gigolo
Delilah's post on work reminded me of an incident that was narrated by a friend some years ago.
This was a fairly long time back, maybe about eight or nine years ago. I had a friend who was working for a certain bank at a salary of Rs.11,000 a month. He was not very junior, an assistant manager, I think, it was just that he was underpaid. Today Rs.11,000 will not buy anything but even back then it was very poor pay and he never had any money to spare.
He was looking around for another job when he met a friend of his who used to work for the Negombo branch of the same bank. The friend seemed to be doing very well, driving a new Montero. Remember, that at the time the Montero had only just been introduced to the market and it was about the most expensive vehicle around.
The rich friend knew all about the underpaid job at the bank (he had held one himself) and he told his friend that he too could get him set up in the new business, it was quite easy and he had all the contacts. He could bring along some friends as well if he liked, he would set them up as well.
The secret of his success? The rich friend had shacked up with an old German woman, in her fifties, who was semi resident in the country. She treated him very well, getting him a house as well as the Montero and paying him a very decent sum for living expenses. She was also very liberal. She was resident for around six months of the year and while she was away the friend was allowed to have a local girlfriend.
All in all a very satisfactory arrangement. He tried quite hard to convince my friend to join him, he did not succeed, but my friend did give the matter some thought before dropping the idea.
A couple of trainers from gyms I have visited in the past are rumoured to have followed a similar path.
Maybe the government should actively promote this; it provides much needed employment and pays much higher prices than those commanded by housemaids whose labour is one of the principal exports of this country.
This was a fairly long time back, maybe about eight or nine years ago. I had a friend who was working for a certain bank at a salary of Rs.11,000 a month. He was not very junior, an assistant manager, I think, it was just that he was underpaid. Today Rs.11,000 will not buy anything but even back then it was very poor pay and he never had any money to spare.
He was looking around for another job when he met a friend of his who used to work for the Negombo branch of the same bank. The friend seemed to be doing very well, driving a new Montero. Remember, that at the time the Montero had only just been introduced to the market and it was about the most expensive vehicle around.
The rich friend knew all about the underpaid job at the bank (he had held one himself) and he told his friend that he too could get him set up in the new business, it was quite easy and he had all the contacts. He could bring along some friends as well if he liked, he would set them up as well.
The secret of his success? The rich friend had shacked up with an old German woman, in her fifties, who was semi resident in the country. She treated him very well, getting him a house as well as the Montero and paying him a very decent sum for living expenses. She was also very liberal. She was resident for around six months of the year and while she was away the friend was allowed to have a local girlfriend.
All in all a very satisfactory arrangement. He tried quite hard to convince my friend to join him, he did not succeed, but my friend did give the matter some thought before dropping the idea.
A couple of trainers from gyms I have visited in the past are rumoured to have followed a similar path.
Maybe the government should actively promote this; it provides much needed employment and pays much higher prices than those commanded by housemaids whose labour is one of the principal exports of this country.
Monday, March 21, 2011
Grass Roots development
According to the Sunday Times the government is to establish Jana Sabha's which will function under the Minister for Economic Development.
Provincial and local councils must seek approval for development work from the Jana Sabha's which will have powers to draw up their own budgets, development plans and seek financial allocations from the Central Government. This effectively renders all other bodies powerless.
We have just concluded the local government elections. If all provincial councils and local authorities need to seek the approval of the Jana Sabha before commencing any projects is there any point in these bodies?
Why not abolish the Provincial Councils and other local authorities and leave the work to be carried on by the Jana Sabha's? If nothing else we will save the cost elections and administration.
Provincial and local councils must seek approval for development work from the Jana Sabha's which will have powers to draw up their own budgets, development plans and seek financial allocations from the Central Government. This effectively renders all other bodies powerless.
We have just concluded the local government elections. If all provincial councils and local authorities need to seek the approval of the Jana Sabha before commencing any projects is there any point in these bodies?
Why not abolish the Provincial Councils and other local authorities and leave the work to be carried on by the Jana Sabha's? If nothing else we will save the cost elections and administration.
Thursday, March 17, 2011
William Smith of Durham
Wedding season will be upon us shortly, so here is a suggestion for those looking for some beautiful responses to a church service.
William Smith was a 16th century organist and composer whose Preces and Responses have become well known and widely used in the United Kingdom. Their popularity is well deserved and may be included in a service, provided the choral director is willing. Listen to it here, its the second item (starts at 4'10" and end at 5'10"). Very lovely.
William Smith was a 16th century organist and composer whose Preces and Responses have become well known and widely used in the United Kingdom. Their popularity is well deserved and may be included in a service, provided the choral director is willing. Listen to it here, its the second item (starts at 4'10" and end at 5'10"). Very lovely.
Uncivil Society
Malinda Seneviratne raises an interesting question in his column in the Daily News. What exactly is civil society?
He goes on to say that the term has been hijacked by a narrow group of organisations, principally the National Peace Council, the Centre for Policy Alternatives and Transparency International who claim to represent civil society as a whole.
He is right that these are the most prominent of the organisations, they are certainly amongst the most vocal.
He implies that the organisations that should carry the mantle of civil society would be 'Dayaka Sabhava associated with a Buddhist temple, a maranaadhara samithiya (funeral donation society), or a community based organization such as the hundreds setup by Sarvodaya or the thousands by SANASA'.
While such organisations do fall into the broad definition of civil society, their aims and objectives are limited primarily to helping its constituents and as such tend to be inward looking. As their concerns are narrow and local, they work quietly and have little need to go to the media, which is probably why so little is heard of them.
Perhaps, like good children, civil society should be seen and not heard? And for those who are heard, Big Brother will be watching.
In a completely unrelated matter, the Minster for Public Relations and Public Affairs Mervyn Silva has discovered a plot by the Campaign for Free and Fair Elections (CaFFE) to undermine the UPFA victory at the upcoming local government polls.
“According to information received, a representative has been appointed to each of the Local Government body area and each of them are to be paid Rs 5,000 for the two days - March 17 and 18.”
The question of dubious funding of NGO has been raised time and again and the above only serves to underline the importance of this. Why do they need to pay such vast sums and to what end? Placing monitors is very suspicious and worse, they are planning on something more:
“This organization is planning to tarnish the Government through various international networks for which they are now holding discussions with several electronic media institutions and two newspapers."
Fortunately this has been caught in time and the Elections Commissioner has been asked to "act in this regard as this media conspiracy is to be launched under the pretext of election monitoring".
This however is not the end of the story. Mano Ratwatte, writing from the U.S. of A has uncovered yet more treachery. It appears that NGO's have received funding, large funding, which needs investigation and action on the lines of US authorities.
He says, in the US, the FBI will investigate any NGO with links to muslims or the Middle East and points out that there are 'Congressional hearings (akin to the McCarthy witch hunt against communists) on the "Radicalization of Muslims in America". A most interesting turn of phrase I must say, the government should apparently leave no stone unturned (or thrown) in its quest to eliminate such sorcery.
He highlights the brave American journalist Seymour Hersh to exposed the MyLai massacre. Hersh was labeled a traitor by many leading American politicians and harassed.
Does this ring any bells? Alarm or otherwise?
About the American motives, of course.
He goes on to say that the term has been hijacked by a narrow group of organisations, principally the National Peace Council, the Centre for Policy Alternatives and Transparency International who claim to represent civil society as a whole.
He is right that these are the most prominent of the organisations, they are certainly amongst the most vocal.
He implies that the organisations that should carry the mantle of civil society would be 'Dayaka Sabhava associated with a Buddhist temple, a maranaadhara samithiya (funeral donation society), or a community based organization such as the hundreds setup by Sarvodaya or the thousands by SANASA'.
While such organisations do fall into the broad definition of civil society, their aims and objectives are limited primarily to helping its constituents and as such tend to be inward looking. As their concerns are narrow and local, they work quietly and have little need to go to the media, which is probably why so little is heard of them.
Perhaps, like good children, civil society should be seen and not heard? And for those who are heard, Big Brother will be watching.
In a completely unrelated matter, the Minster for Public Relations and Public Affairs Mervyn Silva has discovered a plot by the Campaign for Free and Fair Elections (CaFFE) to undermine the UPFA victory at the upcoming local government polls.
“According to information received, a representative has been appointed to each of the Local Government body area and each of them are to be paid Rs 5,000 for the two days - March 17 and 18.”
The question of dubious funding of NGO has been raised time and again and the above only serves to underline the importance of this. Why do they need to pay such vast sums and to what end? Placing monitors is very suspicious and worse, they are planning on something more:
“This organization is planning to tarnish the Government through various international networks for which they are now holding discussions with several electronic media institutions and two newspapers."
Fortunately this has been caught in time and the Elections Commissioner has been asked to "act in this regard as this media conspiracy is to be launched under the pretext of election monitoring".
This however is not the end of the story. Mano Ratwatte, writing from the U.S. of A has uncovered yet more treachery. It appears that NGO's have received funding, large funding, which needs investigation and action on the lines of US authorities.
He says, in the US, the FBI will investigate any NGO with links to muslims or the Middle East and points out that there are 'Congressional hearings (akin to the McCarthy witch hunt against communists) on the "Radicalization of Muslims in America". A most interesting turn of phrase I must say, the government should apparently leave no stone unturned (or thrown) in its quest to eliminate such sorcery.
He highlights the brave American journalist Seymour Hersh to exposed the MyLai massacre. Hersh was labeled a traitor by many leading American politicians and harassed.
Does this ring any bells? Alarm or otherwise?
About the American motives, of course.
Friday, March 11, 2011
Superbrands: is the novelty fading?
I notice that companies don't use the 'Superbrands' logo/tag in their advertisements as widely as they used to. When the concept was launched it was everywhere and I was quite confused, thinking that a company called Superbrands had bought over a few local companies.
I don't watch a lot of television or listen to the radio so I'm not sure if the advertising has migrated to the electronic media, but in the printed press the use of the term seems to have diminished. The only one that I can recall recently is the 'No Limit' board in Dehiwala.
Has the novelty faded ?
The Superbrands Sri Lanka page has the list of brands up to 2009 but nothing after that. The media page carry lists of events in 2009 but nothing thereafter.
I have been a critic of the concept of Superbrands and it would be interesting to see what benefits it has brought to those who were awarded the status of Superbrand.
Note that I have no problems with brands per se, a well established concept that has evolved from the Victorian age. I do agree that brands have value and an open ranking of brands is a worthwhile exercise.
Any comments from the marketing folk out there?
I don't watch a lot of television or listen to the radio so I'm not sure if the advertising has migrated to the electronic media, but in the printed press the use of the term seems to have diminished. The only one that I can recall recently is the 'No Limit' board in Dehiwala.
Has the novelty faded ?
The Superbrands Sri Lanka page has the list of brands up to 2009 but nothing after that. The media page carry lists of events in 2009 but nothing thereafter.
I have been a critic of the concept of Superbrands and it would be interesting to see what benefits it has brought to those who were awarded the status of Superbrand.
Note that I have no problems with brands per se, a well established concept that has evolved from the Victorian age. I do agree that brands have value and an open ranking of brands is a worthwhile exercise.
Any comments from the marketing folk out there?
Thursday, March 10, 2011
Regulating bankers bonuses and the Hilton case
I received an SMS alert a little while ago which indicated that the Central Bank was thinking of regulating the bonuses of bankers. This morning, we woke up to the fact that the Government has tightened its ownership of the Colombo Hilton.
Does this indicate that the state getting rather too large?
There have been calls for the regulation of bankers bonuses in Europe and America but this follows a banking collapse and the revelation of the sheer size of bonuses - in my limited experience the sales staff at investment banks used to take home bonuses that were measured in terms of several years of pay.
The argument for regulation is that:
a) they provided the wrong incentives, tempting traders to take very risky bets at shareholders expense (traders get a mega bonus if it works, shareholders take the loss if it fails);
b) since a number of the banks have now been bailed out by the various governments, the profits being earned are effectively subsidised by the Government (an implicit state guarantee allows for cheap borrowing, while some banks enjoyed a direct infusion of cheap/free state funds).
There is definitely a problem with bankers bonuses in Europe and America. As Roger Moffat, a former derivatives trader wrote in a letter to the Economist, "Trading isn’t hard. Computers do much of the work, and unless we break the culture of paying ridiculous bonuses for being “lucky”, the banks will continue to laugh in the face of politicians and regulators. Japanese housewife traders have led the way in showing us that frankly, it isn’t rocket science."
The question is whether this problem is prevalent in Sri Lanka. Sri Lanka has not suffered a banking crisis (although we have suffered a Finance Company crisis)and no banks were bailed out. I don't think bankers here receive huge payouts either, certainly not in terms of years of salary.
I'm told that some of the treasury bonuses are large and since at least one local bank suffered a major loss as a result of a poorly designed foreign exchange traded product, there may be a case for investigating whether the incentive scheme was at the root of the problem. However I have not seen any investigation into this (I may be wrong here) and certainly very little publicity about the incident, which, in true Sri Lankan style has been carefully covered up.
Is there a real problem with bankers bonuses? Or does this look like a case of over-regulation?
In the case of the Hilton, the owning company is supposed to have defaulted on payments of the lease and that as a result the land has been acquired by the Government. Strangely enough, according to the news report the company is controlled by the Government anyway, so why they did not push for the payment of the lease in the first place is a question.
It is also unclear as to what process was followed prior to the re-acquisition: was it as per clauses specified in the lease agreement? Was due notice given? If so why was it that the company, a listed entity did not make an announcement to the stock exchange? The news broke after Minister of Economics Development Basil Rajapaksa informed parliament that the Hilton Hotel Colombo had been taken over by the government last week.
In a society that is supposed to be governed by laws there is always a process that needs to be followed so that everyone concerned knows how things work. When the process is unclear it creates uncertainty and uncertainty is another name for risk. Investors are conditioned to expect B to follow A and C to follow B. If events suddenly arrive at E straight from A and no one knows what went on in between, then the investor will be lost.
The Hilton is a relatively well known name and a sudden change in its status will be picked up in the news and give the jitters to potential investors.
Does this indicate that the state getting rather too large?
There have been calls for the regulation of bankers bonuses in Europe and America but this follows a banking collapse and the revelation of the sheer size of bonuses - in my limited experience the sales staff at investment banks used to take home bonuses that were measured in terms of several years of pay.
The argument for regulation is that:
a) they provided the wrong incentives, tempting traders to take very risky bets at shareholders expense (traders get a mega bonus if it works, shareholders take the loss if it fails);
b) since a number of the banks have now been bailed out by the various governments, the profits being earned are effectively subsidised by the Government (an implicit state guarantee allows for cheap borrowing, while some banks enjoyed a direct infusion of cheap/free state funds).
There is definitely a problem with bankers bonuses in Europe and America. As Roger Moffat, a former derivatives trader wrote in a letter to the Economist, "Trading isn’t hard. Computers do much of the work, and unless we break the culture of paying ridiculous bonuses for being “lucky”, the banks will continue to laugh in the face of politicians and regulators. Japanese housewife traders have led the way in showing us that frankly, it isn’t rocket science."
The question is whether this problem is prevalent in Sri Lanka. Sri Lanka has not suffered a banking crisis (although we have suffered a Finance Company crisis)and no banks were bailed out. I don't think bankers here receive huge payouts either, certainly not in terms of years of salary.
I'm told that some of the treasury bonuses are large and since at least one local bank suffered a major loss as a result of a poorly designed foreign exchange traded product, there may be a case for investigating whether the incentive scheme was at the root of the problem. However I have not seen any investigation into this (I may be wrong here) and certainly very little publicity about the incident, which, in true Sri Lankan style has been carefully covered up.
Is there a real problem with bankers bonuses? Or does this look like a case of over-regulation?
In the case of the Hilton, the owning company is supposed to have defaulted on payments of the lease and that as a result the land has been acquired by the Government. Strangely enough, according to the news report the company is controlled by the Government anyway, so why they did not push for the payment of the lease in the first place is a question.
It is also unclear as to what process was followed prior to the re-acquisition: was it as per clauses specified in the lease agreement? Was due notice given? If so why was it that the company, a listed entity did not make an announcement to the stock exchange? The news broke after Minister of Economics Development Basil Rajapaksa informed parliament that the Hilton Hotel Colombo had been taken over by the government last week.
In a society that is supposed to be governed by laws there is always a process that needs to be followed so that everyone concerned knows how things work. When the process is unclear it creates uncertainty and uncertainty is another name for risk. Investors are conditioned to expect B to follow A and C to follow B. If events suddenly arrive at E straight from A and no one knows what went on in between, then the investor will be lost.
The Hilton is a relatively well known name and a sudden change in its status will be picked up in the news and give the jitters to potential investors.
Wednesday, March 09, 2011
Kottu over, time for Spaghetti?
There was a time when the Kottu Blogroll was really useful, with virtually every interesting blog being listed and some pretty radical ideas being discussed. Then the nutters, the stalkers and other assorted undesirables appeared, blog wars erupted and identities were exposed.
Many bloggers left Kottu, others gave up altogether leaving very little for the conscientious reader like myself. I was always more of a reader of blogs than a writer and it was that cocktail ideas that I found stimulating. The advantage with the aggregator is that one can read interesting posts from blogs that one does not normally follow.
I have discovered that there are still a few good blogs around, but the problem is in finding them. I've also lost track of a number of blogs that I used to read. We need another aggregator, but one that filters the participants, any takers for starting one?
Many bloggers left Kottu, others gave up altogether leaving very little for the conscientious reader like myself. I was always more of a reader of blogs than a writer and it was that cocktail ideas that I found stimulating. The advantage with the aggregator is that one can read interesting posts from blogs that one does not normally follow.
I have discovered that there are still a few good blogs around, but the problem is in finding them. I've also lost track of a number of blogs that I used to read. We need another aggregator, but one that filters the participants, any takers for starting one?
Saturday, March 05, 2011
I Shall Not Hate: A Gaza Doctor’s Journey on the Road to Peace and Human Dignity
I just came across a review of this book , although I have not read the book the story is too good not to share.
Dr Izzeldin Abuelaish is a Palestinian doctor, a man who dedicated his life to peace and medicine. He lost three daughters in the Israeli attack on Gaza in January 2009. An Israeli tank opened fire on their house, claiming that gun shots came from their building or nearby. A frantic phone call made by the doctor to a friend in Israel, Shlomi Eldar, a journalist who relayed the conversation on live television, took the story to the world. The anchor called on the Israeli Defense Forces to allow ambulances to get to the doctor’s family.
No ambulances ever reached Dr. Abuelaish’s home, which was surrounded by Israeli tanks. He and the surviving members of his family walked a quarter of a mile carrying the dead and wounded through the streets.
Amazingly, though shaken, this did not alter his philosophy. He now lives in Canada and travels widely, speaking to promote his vision.
An interview with Dr Abuelaish is available here, more on the story here.
Dr Izzeldin Abuelaish is a Palestinian doctor, a man who dedicated his life to peace and medicine. He lost three daughters in the Israeli attack on Gaza in January 2009. An Israeli tank opened fire on their house, claiming that gun shots came from their building or nearby. A frantic phone call made by the doctor to a friend in Israel, Shlomi Eldar, a journalist who relayed the conversation on live television, took the story to the world. The anchor called on the Israeli Defense Forces to allow ambulances to get to the doctor’s family.
No ambulances ever reached Dr. Abuelaish’s home, which was surrounded by Israeli tanks. He and the surviving members of his family walked a quarter of a mile carrying the dead and wounded through the streets.
Amazingly, though shaken, this did not alter his philosophy. He now lives in Canada and travels widely, speaking to promote his vision.
An interview with Dr Abuelaish is available here, more on the story here.
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