Tuesday, April 21, 2015

Controlling Mervyn Silva; threewheelers and milk powder.

In an interview with the Sunday Leader, Mr Gotabhaya Rajapaksa said that he tried to control the notorious Mervyn Silva. This is entirely plausible, Mervyn Silva is a thoroughly bad hat and a public relations disaster. His maverick behaviour would certainly have been at odds with the orderly, controlled world of Mr Rajapaksa.

Yet he did not succeed, at least not entirely. Although the mind boggles at the thought, it is quite possible that without the controlling influence of Mr Rajapaksa Mervyn Silva's behaviour could have been far worse.

If the most powerful man in the country could not control him, we may conclude that Mervyn Silva was beyond any human control.

Yet something very strange has happened.

Since the beginning of this year that uncontrollable character, the man even the feared former  Defence Secretary could not control is as quiet as a mouse. He even filed a complaint exposing fraud and corruption, the act of a model citizen. Have the stars changed ? Or are unseen and inexplicable forces must at play? Otherwise what could have prompted such radical change?

Quite unrelated is the Government's attempt to curb another uncontrolled menace, the three wheelers. The Government says they must be regulated and are talking of amending the Motor Traffic Act and setting up a regulatory body.

Why do they need to look so far?

The first step is to start enforcing the Highway Code and root out the corruption in administering the driving test so that at the very least people getting licenses know the road rules. I never understood this business of cheating at the written exam of a driving test. The rules and signs are simple and things we have been taught from school, why does anyone need to cheat?

The retail price of milk powder is set by the Government, the Sunday Times wonders why prices have not fallen, despite a 43% decline in world market prices. What is interesting here is the level of tax: working from the figures quoted in the article Government taxes amount to at least 55% of the raw cost of milk. Apart from the tax, the article explains the reasons for the stickiness in prices:

"price-regulation that is wildly disproportionate to the highs and lows of the international market. “The prices are controlled by the Government in order to prevent excessive volatility affecting consumers,” said Deshal de Mel, economist".

“When prices increase significantly, the companies have to take a hit,” he explained. “On the flip side, when prices are dropping, you need to compensate the companies by allowing them to make some profit which, at such a time, would be at the expense of the consumer.”
This would be a good time to remove the price control on milk powder, there is probably room for prices to fall and if companies are certain that they will not be forced to sell at losses if prices rise they should be quite willing to cut prices.

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