I have always had a fascination for history, something I may have inherited from my grandfather, who was a teacher of history. I have often wondered if something like this could actually be inherited; I did not know my grandfather very well, I was about ten when he died, yet I find myself treading a path that was surely familiar to him.
When I was in school, I wondered what history could possibly teach us, but somewhere in the barren sand a seed sprouted and has kept growing. What history teaches us is that the problems men have faced have not changed much and the wider ones view the more the patterns make sense. In tracing our footprints in the sands of time we see patterns emerging, patterns that recur and in identifying some of these patterns in the present, we may well see our future.
A little short of a century since the Great October Revolution, the Tsar has returned to Russia. The title is no longer used but the system of government increasingly resembles Tsarist Russia.
This was suspected to be the case, when Putin stepped down in 2008. He left the Presidency but became the Prime Minister. His supposed successor turned out to have no real power and the announcement of Putin's candidacy for the Presidency next year confirms the identity of its real ruler. Strip away the democratic facade and one finds power in the hands of a tightly knit group, not a ruling family as in the old days, but a brotherhood of the KGB.
Putin should be able to serve until 2024, unless there is a change in the constitution, and, quite by coincidence, he can keep our Dear Leader company.
Our leader will serve until 2024; the second term expires in 2018 and he will certainly contest at least a third term before questions of primogeniture come into play.
Incumbency is a powerful thing and the recent constitutional changes have made it more powerful still. It worth noting that in thirty years no incumbent has ever been unseated, except by the term limit and once by assassination.
The first thirty years post independence saw parties changing at almost every election, in the second thirty years it happened only once and that too following an assassination.
The newspapers used to carry frequent references to seventeen years of UNP rule but these mysteriously dried up by end 2009, possibly because the PA has now ruled for seventeen years.
Plus ça change, plus c'est la même chose
Friday, September 30, 2011
Wednesday, September 28, 2011
New visa requirement for tourists
The current system of issuing a visa on arrival to tourists is to be suspended on the 30th of September. Tourists will be expected to apply for a visa in advance.
The issue visas on arrival will be restricted to countries that reciprocate, which means Singapore and the Maldives. Everyone else will need to apply for a visa. This plan was mooted about a year ago but its implementation was delayed due to protests by the tourist industry, justifiably so because slow processing of visas could hurt the industry.
The Government has announced that visa's will be issued on-line and to make things even simpler, could be sought by applicants themselves, a third party, a registered agent or a Sri Lankan embassy.
This sounds fine, except that the site does not seem to work. It returns the error:
It gave the same error when I checked yesterday. Perhaps it has not yet been uploaded?
Update
The issue visas on arrival will be restricted to countries that reciprocate, which means Singapore and the Maldives. Everyone else will need to apply for a visa. This plan was mooted about a year ago but its implementation was delayed due to protests by the tourist industry, justifiably so because slow processing of visas could hurt the industry.
The Government has announced that visa's will be issued on-line and to make things even simpler, could be sought by applicants themselves, a third party, a registered agent or a Sri Lankan embassy.
This sounds fine, except that the site does not seem to work. It returns the error:
Error 404--Not Found
From RFC 2068 Hypertext Transfer Protocol -- HTTP/1.1:
10.4.5 404 Not Found
The server has not found anything matching the Request-URI. No indication is given of whether the condition is temporary or permanent.
It gave the same error when I checked yesterday. Perhaps it has not yet been uploaded?
Update
N had commented on the confusion this has sown amongst potential visitors, something that I had missed. Just checked on Trip Advisor, some questions and comments should be read by people in the industry. A few are reproduced below:
Question
5. Re: Sri Lankan visa on arrival
Hi there
I am visting Sri Lanka later this month as a tourist and have seen conflicting reports about whether or not the visa-on-arrival facility is still operating. I am travelling on a New Zealand passport, so the visa-on-arrival option would apply in my case, if it is in fact still operating.
Can anyone confirm definitively whether it is operating? Otherwise, it's going to be a mad dash to get a visa next week before I leave for the Maldives next weekend.
Reply
Hi there.....
Visa BEFORE arrival still not in operation, was due around May time, but no confirmation yet.., so at this time, you will get your visa when you arrive..
Question
Hi,
This notice on Sri Lanka Immigration website (http://www.immigration.gov.lk/web/) has not been updated since early February:
"The on arrival visa facility (Visit Visa, Transit Visa) will remain unchanged until the internet based on-line visa service (Electronic Travel Authority) is established. The general public and the stakeholders will be duly notified when the ETA system is operationally ready."
Also no updates in local newspapers.
When I extended my visa 2 weeks ago I asked the controller at Immigration when the new system will be launched. He did not know.
With the 3 months pilot test that was announced in January I doubt the new system will be effective until August st the earliest.
Comment
Following a very recent difficult experience with the arrival visa stamped on the passport, I'd like to suggest that everyone check that the Immigration Officer has written the number of days [ normally 30] on the visa stamp and also initialled it as well. Usually you would assume that has been done - especially if you travel in and out very frequently - and just take your passport and hurry to baggage claim.
I'd suggest that those who were born in SL but travel on a different passport should be more careful about this. I'm just finding out that some unexpected hassles are being encountered on departure regarding this.
Monday, September 26, 2011
Colombo is Colombo: the need for a comprehensive development plan for the city
The Government has been doing quite a bit to make the capital city presentable; roads widened and resurfaced, new pavements, walls around old buildings broken down, the canals cleaned, some turf laid, some trees cut, some saplings planted.
There are bigger things that are hinted at; the reclamation of land from the sea, the clearing of slums and the construction of some infrastructure. So far, on the whole, the city is looking a lot better. I was distressed when the weeping willows on Independence Square were cut down but new trees (partly grown) have been planted and some turf has been laid, so its now looking rather nice, but there have been some disturbing reports on the clearing of slums.
What we do not know is the overall plan, if such a thing exists.
A comprehensive plan, drawn up with public consultation is essential to the success of such large-scale projects. There are many actors and issues that need examination. If embarrassing missteps are to be avoided public consultation is necessary. The process of consultation will also build confidence and bring in good publicity to the plan.
Such a thing has been in the works since the 1990's and Ranil Wickremesinghe, has written a good article on the its last edition. Its a little long, but it should be read by all who intend voting in the next Municipal election.
The plan for the development of the city needs to be placed with a wider policy framework, one that in my opinion should be based on a 'night watchman state' - ie one with limited involvement in business and confined largely to providing essential public goods.
A lower 'footprint' of the state would entail less expenditure, therefore less tax and enable a simple transparent tax code, all of which will stimulate business activity.
The opposition looks in disarray, the article above was buried on page 18 of the Sunday Times, not indicative of a good media campaign.
Addendum:
A letter from a former official on a public housing programme run in 2006/7 is quite interesting.
Although the letter is a bit garbled it tells a tale of a scheme opened with great fanfare only to fall apart after a promising start due to corruption. A mysterious Malaysian party is awarded a tender, even though they did not bid, an advance is paid and no more houses are constructed.
There are bigger things that are hinted at; the reclamation of land from the sea, the clearing of slums and the construction of some infrastructure. So far, on the whole, the city is looking a lot better. I was distressed when the weeping willows on Independence Square were cut down but new trees (partly grown) have been planted and some turf has been laid, so its now looking rather nice, but there have been some disturbing reports on the clearing of slums.
What we do not know is the overall plan, if such a thing exists.
A comprehensive plan, drawn up with public consultation is essential to the success of such large-scale projects. There are many actors and issues that need examination. If embarrassing missteps are to be avoided public consultation is necessary. The process of consultation will also build confidence and bring in good publicity to the plan.
Such a thing has been in the works since the 1990's and Ranil Wickremesinghe, has written a good article on the its last edition. Its a little long, but it should be read by all who intend voting in the next Municipal election.
The plan for the development of the city needs to be placed with a wider policy framework, one that in my opinion should be based on a 'night watchman state' - ie one with limited involvement in business and confined largely to providing essential public goods.
A lower 'footprint' of the state would entail less expenditure, therefore less tax and enable a simple transparent tax code, all of which will stimulate business activity.
The opposition looks in disarray, the article above was buried on page 18 of the Sunday Times, not indicative of a good media campaign.
Addendum:
A letter from a former official on a public housing programme run in 2006/7 is quite interesting.
Although the letter is a bit garbled it tells a tale of a scheme opened with great fanfare only to fall apart after a promising start due to corruption. A mysterious Malaysian party is awarded a tender, even though they did not bid, an advance is paid and no more houses are constructed.
Why the driving on Sri Lankan roads is so bad
Just had a chat with someone who will be sitting for the driving test next month. I asked her if she had read the Highway Code. She said no, she had heard that it exists but no one told her to read it.
She has already sat the written paper where road signs and rules are tested. I asked how she studied for the paper, apparently the driving school provided the answers to the questions, which she memorised. The Department of Motor Traffic apparently has only three standard papers and answers were provided for all the papers.
The driving school charges Rs.15,000/- which includes a bribe of Rs.1,000/- to the examiners. What they seem to be teaching is control of the vehicle and whatever minimal knowledge (which side of the road to drive on etc) is necessary to get on the road.
I was wondering why the driving on Sri Lanka's roads was so bad, now I know why. I have noticed a spate of fatal accidents on outstation roads of late, one needs to be extra cautious when driving long distances, especially with long distance buses.
Perhaps we should use the train more frequently. Then again, perhaps not.
She has already sat the written paper where road signs and rules are tested. I asked how she studied for the paper, apparently the driving school provided the answers to the questions, which she memorised. The Department of Motor Traffic apparently has only three standard papers and answers were provided for all the papers.
The driving school charges Rs.15,000/- which includes a bribe of Rs.1,000/- to the examiners. What they seem to be teaching is control of the vehicle and whatever minimal knowledge (which side of the road to drive on etc) is necessary to get on the road.
I was wondering why the driving on Sri Lanka's roads was so bad, now I know why. I have noticed a spate of fatal accidents on outstation roads of late, one needs to be extra cautious when driving long distances, especially with long distance buses.
Perhaps we should use the train more frequently. Then again, perhaps not.
Friday, September 23, 2011
Mansoor Ali Khan, The Nawab of Pataudi (1941-2011)
We are supposed to be a cricket mad nation, yet the death of a famous cricketer barely merits a mention in the news. Even the press in Singapore, which is fair way off the mainstream of cricket carried a story.
He was of course a cricketer of a different, more gentlemanly, era; a time when cricket was still a game and one dominated by Australia, South Africa and England. Playing for Oxford and Sussex he may well have played for England, like his father before him. He was one of India's most successful captains, leading them to their first overseas series win.
Even in India, his son, the actor Saif Ali Khan is now more famous than his father. He lived quietly avoiding publicity except once when he was caught up in it, charged with poaching.
The Telegraph carries a nice obituary, The Australian has a more detailed tribute.
RIP
Addendum: The Guardian has a good obituary.
He was of course a cricketer of a different, more gentlemanly, era; a time when cricket was still a game and one dominated by Australia, South Africa and England. Playing for Oxford and Sussex he may well have played for England, like his father before him. He was one of India's most successful captains, leading them to their first overseas series win.
Even in India, his son, the actor Saif Ali Khan is now more famous than his father. He lived quietly avoiding publicity except once when he was caught up in it, charged with poaching.
The Telegraph carries a nice obituary, The Australian has a more detailed tribute.
RIP
Addendum: The Guardian has a good obituary.
Tuesday, September 20, 2011
The race for the mayoralty
I had not taken much interest in the municipal election, its not particularly important and I was quite disgusted with how things turned out the last time around.
To recollect what happened; the UNP could not gets its candidate approved in time and it then went on to ask voters to vote for a proxy party. The voters gave the proxy an overwhelming majority, but the proxy then proceeded to renege on the agreement with the UNP and we had the spectacle of a trishaw driver in the mayor's office. I had resolved not to vote this time around until I became aware of Milinda Moragoda's campaign.
I don't think Milinda Moragoda is a bad character, he is not thug and has reasonable ability, on his own he would be a good candidate for mayor. The question is, how far will he be allowed to follow his instincts? Will Moragoda end up playing the role that Medvadev plays in Moscow? The velvet glove on the mailed fist?
Tisaranee Gunasekara, whose analysis is usually prescient, seems to think so and Harsha De Silva, a UNP MP seems to have a similar opinion.
Would the voters be best served by voting for some opposition candidate? There is no guarantee that the office of the mayor will not be reduced a ceremonial one in the event that the opposition wins, especially if the plan for the Colombo Metropolitan City Corporation comes to pass. As it stands the UDA seems to be overriding much of the authority of the CMC.
Nevertheless it would seem better to vote for some opposition candidate, who may provide some trivial resistance, in the event that unpopular measures are being contemplated. Better that than a yes man.
Who do we have in the opposition? I don't even know, I have been told there are hundreds of candidates, someone shoved a few pictures under the door the other day, god only knows who he is. I'm still confused as to what to do; vote for an opposition which may be marginalised by the UDA and a CMCC or for a government candidate who will execute what he asked to do?
To recollect what happened; the UNP could not gets its candidate approved in time and it then went on to ask voters to vote for a proxy party. The voters gave the proxy an overwhelming majority, but the proxy then proceeded to renege on the agreement with the UNP and we had the spectacle of a trishaw driver in the mayor's office. I had resolved not to vote this time around until I became aware of Milinda Moragoda's campaign.
I don't think Milinda Moragoda is a bad character, he is not thug and has reasonable ability, on his own he would be a good candidate for mayor. The question is, how far will he be allowed to follow his instincts? Will Moragoda end up playing the role that Medvadev plays in Moscow? The velvet glove on the mailed fist?
Tisaranee Gunasekara, whose analysis is usually prescient, seems to think so and Harsha De Silva, a UNP MP seems to have a similar opinion.
Would the voters be best served by voting for some opposition candidate? There is no guarantee that the office of the mayor will not be reduced a ceremonial one in the event that the opposition wins, especially if the plan for the Colombo Metropolitan City Corporation comes to pass. As it stands the UDA seems to be overriding much of the authority of the CMC.
Nevertheless it would seem better to vote for some opposition candidate, who may provide some trivial resistance, in the event that unpopular measures are being contemplated. Better that than a yes man.
Who do we have in the opposition? I don't even know, I have been told there are hundreds of candidates, someone shoved a few pictures under the door the other day, god only knows who he is. I'm still confused as to what to do; vote for an opposition which may be marginalised by the UDA and a CMCC or for a government candidate who will execute what he asked to do?
Tuesday, September 13, 2011
The need for limits on power.
KAL's cartoon (from The Economist), a good illustration of the mentality that seems to prevail in the USA.
Power corrupts and absolute power corrupts, absolutely.
Nothing underlines this well-worn saying more than this shocking experience by an American citizen, in her own country.
Terrorism is a tactic that is used by the disaffected, solving the underlying problems is the key to a long term solution. Unless an equitable and just solution is found for Palestine, it will remain a festering sore and a lightning rod for anger against the US.
Sort out the root problem, don't deal with the symptoms.
See Also, King Abdullah's letter of 1947, to the American people As the Arabs see the Jews.
Saturday, September 10, 2011
Sri Lanka in great leap forward
Today's headline in the Daily News gave me a bit of a shock.
Given the country's fascination with all things Chinese I was wondering if Mao's Great leap Forward had inspired our policymakers.
Phew! Luckily it seemed that it had not, although we see a renewed interest in state directed economic production.
Interestingly enough those who sing the praises of China and praise its ancient society conveniently forget the violence of its recent past. Nor do they remember the aggressive attempt to erase its past. In fact China under Mao was a terrible place, violent and chaotic; such drama naturally inspires political commentators and analysts, especially those with a fascination for power. Rulers with similar passions will naturally identify with these.
However, it is only after China started to shed its baggage of Mao and socialism did its people witness an improvement in their lives. So when China moves slowly Westwards, it does not make sense to go Eastwards. To be sure the path is the same, but the direction is opposite.
Given the country's fascination with all things Chinese I was wondering if Mao's Great leap Forward had inspired our policymakers.
Phew! Luckily it seemed that it had not, although we see a renewed interest in state directed economic production.
Interestingly enough those who sing the praises of China and praise its ancient society conveniently forget the violence of its recent past. Nor do they remember the aggressive attempt to erase its past. In fact China under Mao was a terrible place, violent and chaotic; such drama naturally inspires political commentators and analysts, especially those with a fascination for power. Rulers with similar passions will naturally identify with these.
However, it is only after China started to shed its baggage of Mao and socialism did its people witness an improvement in their lives. So when China moves slowly Westwards, it does not make sense to go Eastwards. To be sure the path is the same, but the direction is opposite.
Thursday, September 08, 2011
Studio Dharshi and the RMV - excellent service
I sold my vehicle (rather too cheaply it seems) and then went and bought another (paying too much because I liked it).
I went to the RMV to get the transfer forms and I expected a certain amount of hassle. Parking was not too difficult, I had to walk about a 100 yards but that was not too bad. The forms were issued from a window that opens on to the pavement so there was no need to go inside the building and there was no queue.
I was told that I needed two photographs (of myself) and a photocopy of my ID, both certified by a JP to transfer the car to my name. I spied a little studio (it was called Studio Dharshi or something similar) almost next to the RMV. They were doing the photographs, photocopies and as a bonus they had an in-house JP who would sign everything.
I walked in and they photocopied my ID, then went to the next room where a girl took my picture, downloaded it from the camera and printed it on a little Epson printer. While waiting I noticed that the girl was also doing the photographs for new vehicle registrations (these require a photo of the vehicle as well). She was downloading pictures of various kinds of cars from the internet and printing them out for the owners who had forgotten to bring a picture along.
Since the photographs were usable for visas and passports as well, I got an extra set printed. The charge is 250/- for four photos, my cost for eight pictures, a photocopy of my ID and the JP's signature on two photos plus the ID was 600/-.
The whole exercise would not have taken 20-25 minutes and Studio Dharshi provided an excellent service.
I went to the RMV to get the transfer forms and I expected a certain amount of hassle. Parking was not too difficult, I had to walk about a 100 yards but that was not too bad. The forms were issued from a window that opens on to the pavement so there was no need to go inside the building and there was no queue.
I was told that I needed two photographs (of myself) and a photocopy of my ID, both certified by a JP to transfer the car to my name. I spied a little studio (it was called Studio Dharshi or something similar) almost next to the RMV. They were doing the photographs, photocopies and as a bonus they had an in-house JP who would sign everything.
I walked in and they photocopied my ID, then went to the next room where a girl took my picture, downloaded it from the camera and printed it on a little Epson printer. While waiting I noticed that the girl was also doing the photographs for new vehicle registrations (these require a photo of the vehicle as well). She was downloading pictures of various kinds of cars from the internet and printing them out for the owners who had forgotten to bring a picture along.
Since the photographs were usable for visas and passports as well, I got an extra set printed. The charge is 250/- for four photos, my cost for eight pictures, a photocopy of my ID and the JP's signature on two photos plus the ID was 600/-.
The whole exercise would not have taken 20-25 minutes and Studio Dharshi provided an excellent service.
Tuesday, September 06, 2011
Lessons from India
I have taken to watching some of the discussion programmes aired on NDTV. I have been impressed by the quality of the panelists; the politicians, the public servants, the journalists and others who have participated.
Last night the Jammu and Kashmir Chief Minister Omar Abdullah talked about the controversy surrounding the unmarked graves all over the state. Watch it here.
Its rather refreshing to encounter a journalist willing to ask hard questions and a minister willing to give a proper answer.
Are we missing something here?
Addendum: See the debate on Truth and Reconciliation in Kashmir, here. Quite fascinating to see such seemingly familiar issues discussed with the advantage of distance.
Last night the Jammu and Kashmir Chief Minister Omar Abdullah talked about the controversy surrounding the unmarked graves all over the state. Watch it here.
Its rather refreshing to encounter a journalist willing to ask hard questions and a minister willing to give a proper answer.
Are we missing something here?
Addendum: See the debate on Truth and Reconciliation in Kashmir, here. Quite fascinating to see such seemingly familiar issues discussed with the advantage of distance.
Monday, September 05, 2011
The Portuguese influence?
The Portuguese controlled part of the shoreline of modern Sri Lanka from 1505 to 1658. The left their mark on the cuisine (most importantly by introducing the chilli to the local populace) religion and language.
The Portuguese and Spanish tongues are fairly closely related and when a Venezuelan newsreader referred to the editor of a newspaper as un hijo de puta (“a son of a whore”), a bell began to ring....
Thats all folks, now get back to work, its only Monday.
The Portuguese and Spanish tongues are fairly closely related and when a Venezuelan newsreader referred to the editor of a newspaper as un hijo de puta (“a son of a whore”), a bell began to ring....
Thats all folks, now get back to work, its only Monday.
Sunday, September 04, 2011
Pascucci café and restaurant
Another new coffee house has opened, on 95 McCarthy Road (Wijerama Mawatha).
Tried one of their coffee's it was excellent. I never knew whipped cream could taste so good and with nougat and a few other things thrown in, it was one of the tastiest drinks I've had.
I have been haunting coffee bars from the time they opened in Colombo, starting with The Commons (when it was on Turret Road), Dons Cafe, Delifrance, then Barista and finally Coffee Bean.I always went to these places to hang around, not for the coffee or the food, although the Commons had some very good deals in the early days.
Pascucci is the first place where I have really enjoyed a coffee and where I might even return to purely for the coffee. This is not a proper review, as its based on just one drink, but I think the place is worth checking out.
Tried one of their coffee's it was excellent. I never knew whipped cream could taste so good and with nougat and a few other things thrown in, it was one of the tastiest drinks I've had.
I have been haunting coffee bars from the time they opened in Colombo, starting with The Commons (when it was on Turret Road), Dons Cafe, Delifrance, then Barista and finally Coffee Bean.I always went to these places to hang around, not for the coffee or the food, although the Commons had some very good deals in the early days.
Pascucci is the first place where I have really enjoyed a coffee and where I might even return to purely for the coffee. This is not a proper review, as its based on just one drink, but I think the place is worth checking out.
Wednesday, August 31, 2011
Chinese building falls over
A friend sent me an email with pictures of a building in China that has keeled over and fallen. For a moment I thought it was joke until further research revealed that it was indeed true.
Hmmmm....
Given that the Chinese are constructing a highway, a harbour, a coal fired power plant and much else lets hope that they do a better job here than they do in China.
Hang on, hang on a minute. Didn't a bridge of the highway collapse already? That too with no traffic on it, it just collapsed under its own weight. There were also the mysterious fires in the coal power plant. The power plant seems to be operating below capacity and have a few other problems as well. It almost looks like the Chinese are trying to get a rather hot potato off their hands.
The harbour, although opened is not yet operational due to a few small technical hitches.
The collapsed building in China is a good illustration of the impact of corruption. Basic safety, building and planning regulations are not enforced because either
(a) the builders have paid off the officials who are supposed to do their job or;
(b) they have sufficient influence to bypass the regulations. ie The authorities are too afraid to enforce the rules because the officials concerned will be penalised if they do.
Corruption is not therefore just a matter of money; undue influence over public officials has (from the point of view of the ordinary citizen) exactly the same impact. What matters is that rules, principles and policies are bypassed; it is not how they are circumvented that matters.
The second important lesson is that corruption is not about someone making a little money on the side, it is also that it can pose a danger to the public. The controversy over substandard cement is a case in point.
Interestingly enough, poor policy preceded the import of the substandard cement. The Government imposed price controls on cement, which lead to a shortage. The Government then triumphantly rode to the rescue with the import of cheap cement, which turned out to be substandard. Leave aside the question that someone made a buck dumping cement; who will answer if a building collapses and kills someone?
We now learn that there is also a danger from X-Ray machines that have obviously been imported bypassing standard regulations? The patients must now decide which hospitals are likely to be safe, as far as X-Rays are concerned. Hopefully someone in the private hospitals will take the responsibility to check that their equipment is in order, many may actually market their services on this basis. But what of the average man who has to visit the state run hospitals?
I know for a fact that the vast majority of the Chinese tableware in the market is lead contaminated. How do I know this? Because a friend who works in one of these companies was looking for cheap products to stock their showrooms with.
They imported some from China but is was rejected due to lead contamination. Desperate for stocks, they bought some stuff wholesale from Pettah, all from China and all of which turned out to be lead contaminated. They tried samples from many different vendors, all were bad. I think they are now sourcing from local manufacturers, all of who meet the standards.
The question is how did this get into the country? The customs performs tests for lead contamination at the harbour and rejects anything unsafe. Presumably they do the same with X-ray equipment.
No compensation has yet been paid, although many hundreds of motorists faced expensive repairs due to substandard fuel.
The bottom line is corruption is a menace and the public will ultimately pay its price; in terms of shoddy service, high costs or unsafe products.
The cure?
Restoring the independence of the public service (so that its officials can act without fear or favour), something that the 17th amendment to the constitution attempted to do but which was reversed by the 18th amendment. Improving transparency in public affairs is another measure. A lot can take place in murky backroom deals, shining daylight on these will make this a lot harder.
Naturally, like vampires, they hate bright sunshine which is why the Freedom of Information bill was defeated . The less people know the better. The less the media report, the better. These recent controversies should have been headline news, instead we get little bits and pieces, mostly new flashes or a few things on the internet. No one wants to investigate much or ask too many hard questions.
The public, as ever, wrapped up in their daily lives, pay little attention to seemingly minor items of news. Only when it affects them directly do they understand its gravity and by then the rot has gone too deep.
Hmmmm....
Given that the Chinese are constructing a highway, a harbour, a coal fired power plant and much else lets hope that they do a better job here than they do in China.
Hang on, hang on a minute. Didn't a bridge of the highway collapse already? That too with no traffic on it, it just collapsed under its own weight. There were also the mysterious fires in the coal power plant. The power plant seems to be operating below capacity and have a few other problems as well. It almost looks like the Chinese are trying to get a rather hot potato off their hands.
The harbour, although opened is not yet operational due to a few small technical hitches.
The collapsed building in China is a good illustration of the impact of corruption. Basic safety, building and planning regulations are not enforced because either
(a) the builders have paid off the officials who are supposed to do their job or;
(b) they have sufficient influence to bypass the regulations. ie The authorities are too afraid to enforce the rules because the officials concerned will be penalised if they do.
Corruption is not therefore just a matter of money; undue influence over public officials has (from the point of view of the ordinary citizen) exactly the same impact. What matters is that rules, principles and policies are bypassed; it is not how they are circumvented that matters.
The second important lesson is that corruption is not about someone making a little money on the side, it is also that it can pose a danger to the public. The controversy over substandard cement is a case in point.
Interestingly enough, poor policy preceded the import of the substandard cement. The Government imposed price controls on cement, which lead to a shortage. The Government then triumphantly rode to the rescue with the import of cheap cement, which turned out to be substandard. Leave aside the question that someone made a buck dumping cement; who will answer if a building collapses and kills someone?
We now learn that there is also a danger from X-Ray machines that have obviously been imported bypassing standard regulations? The patients must now decide which hospitals are likely to be safe, as far as X-Rays are concerned. Hopefully someone in the private hospitals will take the responsibility to check that their equipment is in order, many may actually market their services on this basis. But what of the average man who has to visit the state run hospitals?
I know for a fact that the vast majority of the Chinese tableware in the market is lead contaminated. How do I know this? Because a friend who works in one of these companies was looking for cheap products to stock their showrooms with.
They imported some from China but is was rejected due to lead contamination. Desperate for stocks, they bought some stuff wholesale from Pettah, all from China and all of which turned out to be lead contaminated. They tried samples from many different vendors, all were bad. I think they are now sourcing from local manufacturers, all of who meet the standards.
The question is how did this get into the country? The customs performs tests for lead contamination at the harbour and rejects anything unsafe. Presumably they do the same with X-ray equipment.
No compensation has yet been paid, although many hundreds of motorists faced expensive repairs due to substandard fuel.
The bottom line is corruption is a menace and the public will ultimately pay its price; in terms of shoddy service, high costs or unsafe products.
The cure?
Restoring the independence of the public service (so that its officials can act without fear or favour), something that the 17th amendment to the constitution attempted to do but which was reversed by the 18th amendment. Improving transparency in public affairs is another measure. A lot can take place in murky backroom deals, shining daylight on these will make this a lot harder.
Naturally, like vampires, they hate bright sunshine which is why the Freedom of Information bill was defeated . The less people know the better. The less the media report, the better. These recent controversies should have been headline news, instead we get little bits and pieces, mostly new flashes or a few things on the internet. No one wants to investigate much or ask too many hard questions.
The public, as ever, wrapped up in their daily lives, pay little attention to seemingly minor items of news. Only when it affects them directly do they understand its gravity and by then the rot has gone too deep.
Wednesday, August 24, 2011
Corruption and the Lokpal bill
Those who have been following the news in India would have heard of the Lokpal bill, an anti-corruption measure.
The bill proposes the setting up of an ombudsmen which will look into issues of corruption, a measure while welcome, only deals with the problem once manifest. Why wait this long? Far better to prevent than to cure, and the surest means to a cure is to eliminate the cause.
Corruption in public office, the type of corruption that is the most serious since it perverts public policy, becomes possible when an official enjoys the power to issue vital documents. The citizen needs these documents in order to go about his business, hence its importance, which creates for its issuer the ability to charge a rent. The more important the document, the higher the rent.
If the need for such documents were reduced, the ability to charge would disappear, therefore simplifying regulations, eliminating the need for pointless permits, would be the first step to rooting out the problem at source.
What the Government needs to do is revisit its laws and regulations and identify which ones are essential. India is notorious for being over regulated. All manner of antiquated rules dating from the time of the Raj are still in force, to which have been added a raft of others in the decades under socialism. Regulations are necessary, this is why we need to tolerate governments, but over regulation creates circumstances in which corruption thrives. India has been ranked as the most over regulated nation in Asia.
Improving transparency in public affairs and moving to electronic or web based means of issuing documents will also help. If officials are holding back, say building permits, publishing on a weekly basis, the number of permits received and the number approved will immediately highlight potential problem areas. Is the official concerned simply inefficient (a problem in itself), or is something else going on? The mere knowledge that the public at-large have a visible performance indicator will have a salutatory effect on both corruption and inefficiency.
Naturally, deregulation and transparency are not popular, vested interests will always rail against them, so what the Indian Government needs to do is quietly deregulate. It took an economic crisis in 1990 for the first wave of deregulation to take place, further deregulation, which will cut the ground from under the bureaucrats.
This will save administrative costs, reduce the hassle people have to through and also give India's economy a much needed boost.
The bill proposes the setting up of an ombudsmen which will look into issues of corruption, a measure while welcome, only deals with the problem once manifest. Why wait this long? Far better to prevent than to cure, and the surest means to a cure is to eliminate the cause.
Corruption in public office, the type of corruption that is the most serious since it perverts public policy, becomes possible when an official enjoys the power to issue vital documents. The citizen needs these documents in order to go about his business, hence its importance, which creates for its issuer the ability to charge a rent. The more important the document, the higher the rent.
If the need for such documents were reduced, the ability to charge would disappear, therefore simplifying regulations, eliminating the need for pointless permits, would be the first step to rooting out the problem at source.
What the Government needs to do is revisit its laws and regulations and identify which ones are essential. India is notorious for being over regulated. All manner of antiquated rules dating from the time of the Raj are still in force, to which have been added a raft of others in the decades under socialism. Regulations are necessary, this is why we need to tolerate governments, but over regulation creates circumstances in which corruption thrives. India has been ranked as the most over regulated nation in Asia.
Improving transparency in public affairs and moving to electronic or web based means of issuing documents will also help. If officials are holding back, say building permits, publishing on a weekly basis, the number of permits received and the number approved will immediately highlight potential problem areas. Is the official concerned simply inefficient (a problem in itself), or is something else going on? The mere knowledge that the public at-large have a visible performance indicator will have a salutatory effect on both corruption and inefficiency.
Naturally, deregulation and transparency are not popular, vested interests will always rail against them, so what the Indian Government needs to do is quietly deregulate. It took an economic crisis in 1990 for the first wave of deregulation to take place, further deregulation, which will cut the ground from under the bureaucrats.
This will save administrative costs, reduce the hassle people have to through and also give India's economy a much needed boost.
Wednesday, August 10, 2011
Frederic Bastiat and the Petition From the Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps etc
We have had a few visitors from overseas recently, who arrived carrying a number of books as presents. They know that I like reading but invariably bring books that I find uninteresting.
The current collection looked particularly unpromising, a fairly large number to start with (which presents a problem of disposal) and some which were rather old. A new book, freshly printed is always enticing. Aging books, even if they are in good condition lack the aroma of fresh ink and paper; add to that the dulled, unfashionable cover designs and the lack of excitement is palpable.
They have turned out to be extremely interesting. While working my way through The Worldly Philosophers, a very well written book on the lives and thoughts of economists, major and minor I encountered Frédéric Bastiat's sharp and witty observations which deserve a wide audience.
His candlestick makers petition is particularly brilliant and is reproduced in an edited form below:
Read the petition in full here.
Bastiat also had a number of memorable quotes on the predatory nature of the state. Restricting the powers of the state is foundation of liberty, an overpowerful state will invariably prey on its citizens.
To quote him again:
"Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone."
And:
"If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?"
The current collection looked particularly unpromising, a fairly large number to start with (which presents a problem of disposal) and some which were rather old. A new book, freshly printed is always enticing. Aging books, even if they are in good condition lack the aroma of fresh ink and paper; add to that the dulled, unfashionable cover designs and the lack of excitement is palpable.
They have turned out to be extremely interesting. While working my way through The Worldly Philosophers, a very well written book on the lives and thoughts of economists, major and minor I encountered Frédéric Bastiat's sharp and witty observations which deserve a wide audience.
His candlestick makers petition is particularly brilliant and is reproduced in an edited form below:
A PETITION From the Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.
To the Honourable Members of the Chamber of Deputies.
Gentlemen:
You are on the right track. You reject abstract theories and have little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.
.....We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.
We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull's-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.
Be good enough, honourable deputies, to take our request seriously, and do not reject it without at least hearing the reasons that we have to advance in its support.
First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged?
If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.
If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.
Our moors will be covered with resinous trees. Numerous swarms of bees will gather from our mountains the perfumed treasures that today waste their fragrance, like the flowers from which they emanate. Thus, there is not one branch of agriculture that would not undergo a great expansion.
The same holds true of shipping. Thousands of vessels will engage in whaling, and in a short time we shall have a fleet capable of upholding the honour of France and of gratifying the patriotic aspirations of the undersigned petitioners, chandlers, etc.
But what shall we say of the specialities of Parisian manufacture? Henceforth you will behold gilding, bronze, and crystal in candlesticks, in lamps, in chandeliers, in candelabra sparkling in spacious emporia compared with which those of today are but stalls.
......Will you tell us that, though we may gain by this protection, France will not gain at all, because the consumer will bear the expense?
We have our answer ready:
You no longer have the right to invoke the interests of the consumer. You have sacrificed him whenever you have found his interests opposed to those of the producer. You have done so in order to encourage industry and to increase employment. For the same reason you ought to do so this time too.
....The question, and we pose it formally, is whether what you desire for France is the benefit of consumption free of charge or the alleged advantages of onerous production. Make your choice, but be logical; for as long as you ban, as you do, foreign coal, iron, wheat, and textiles, in proportion as their price approaches zero, how inconsistent it would be to admit the light of the sun, whose price is zero all day long!
Read the petition in full here.
Bastiat also had a number of memorable quotes on the predatory nature of the state. Restricting the powers of the state is foundation of liberty, an overpowerful state will invariably prey on its citizens.
To quote him again:
"Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone."
And:
"If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?"
Tuesday, August 02, 2011
Growing lawlessness
A friend of mine told me what he witnessed at Union Place yesterday.
They were driving along Union Place and following a small Maruti car, a taxi. Without warning an old Peugeot 406, a government car, pulled out and rammed the Maruti on the side, denting the door.
What happened next was truly shocking.
Two thugs jumped out of the Peugeot and started beating up the driver of the Maruti. The Maruti was being driven by a young boy, a small made fellow who must have been a few years out of school, he stood no chance against the heavies. They slapped him and beat him around for a few minutes and then jumped into their car and drove off.
Mind you, the fault was entirely with the Peugeot, which pulled out without signalling or warning to the main road, so there was no justification whatsoever for finding fault with, let alone assaulting, the hapless taxi driver.
A friend of mine witnessed a similar incident a couple of years back when a Landrover without number plates ran a red light and crashed into a van coming from the opposite side. Again four heavies jumped out out, assaulted the van driver and drove off.
I had a less dangerous experience, again a couple of years back, with a police pickup truck which was overtaking a line of cars stopped at a red light and almost crashed into me (I was turning in on the left lane, but managed to stop in time). The policemen were glaring and mouthing inanities at me while they ran the red light. They were on the wrong side and running a red light, yet the fault was mine.
What does this tell us? No laws apply to the rulers, their families, henchmen or hangers-on and woe betide anyone who crosses their path, even by accident. In other words a breakdown of law and order.
The unfortunate taxi driver in the incident yesterday was trying to call the police but I'm willing to bet good money that the police will never take the entry. It has happened many times before when powerful people are involved.
Sri Lanka, paradise? More like Gangsters Paradise, where the rulers are all-powerful and the citizenry cowed and afraid.
They were driving along Union Place and following a small Maruti car, a taxi. Without warning an old Peugeot 406, a government car, pulled out and rammed the Maruti on the side, denting the door.
What happened next was truly shocking.
Two thugs jumped out of the Peugeot and started beating up the driver of the Maruti. The Maruti was being driven by a young boy, a small made fellow who must have been a few years out of school, he stood no chance against the heavies. They slapped him and beat him around for a few minutes and then jumped into their car and drove off.
Mind you, the fault was entirely with the Peugeot, which pulled out without signalling or warning to the main road, so there was no justification whatsoever for finding fault with, let alone assaulting, the hapless taxi driver.
A friend of mine witnessed a similar incident a couple of years back when a Landrover without number plates ran a red light and crashed into a van coming from the opposite side. Again four heavies jumped out out, assaulted the van driver and drove off.
I had a less dangerous experience, again a couple of years back, with a police pickup truck which was overtaking a line of cars stopped at a red light and almost crashed into me (I was turning in on the left lane, but managed to stop in time). The policemen were glaring and mouthing inanities at me while they ran the red light. They were on the wrong side and running a red light, yet the fault was mine.
What does this tell us? No laws apply to the rulers, their families, henchmen or hangers-on and woe betide anyone who crosses their path, even by accident. In other words a breakdown of law and order.
The unfortunate taxi driver in the incident yesterday was trying to call the police but I'm willing to bet good money that the police will never take the entry. It has happened many times before when powerful people are involved.
Sri Lanka, paradise? More like Gangsters Paradise, where the rulers are all-powerful and the citizenry cowed and afraid.
Thursday, July 21, 2011
Politics in the blogosphere
After a very long sojourn, politics seems to have returned to the local blogosphere. What is more interesting is that it has sparked some reasonable debate, something that has been missing for a long time.
Cerno was rather irritated by the fact that some lucky people seem to have enormous amounts of time to spend on web, so apologies for starting yet another post on the topic.
Reading the Drummers post, I cam across an interesting comment from David Blacker, on the role of the LTTE in dragging the country back to war.
I think the conduct of the Tigers since 2005 has been despicable and their actions have worsened the plight of the Tamils immeasurably.
To start with, the Tigers organised the boycott of the election that ensured that Ranil Wickremesinghe, architect of the CFA would be defeated. Many speculated that the boycott was organised in concert with the opposition candidate, DBS Jeyaraj certainly seems to think so. RW lost the election by a shade over 180,000 votes, the Jaffna vote alone could have carried him to victory.
The Tigers thus ditched the man responsible for the CFA and elected someone who campaigned on a platform discrediting it. They next went a step further and provoked a conflict by deliberately cutting off the water supply to farmers. It is true that MR campaigned on an anti-CFA platform, but that was just a ploy to get elected, no one seriously contemplated abandoning the CFA. They even had a round or two of talks with the LTTE, after being elected.
It seems rather strange, given the amount of mud that has been thrown on the CFA to recall that the regime actually held talks with the Tigers and to find that the leader of the government delegation "reiterated the government's commitment to peace talks".
In this context it is worth noting that it took the Government a full three years before they finally decided to abrogate the CFA in 2008, so clearly it was far from useless or harmful. If it was, they certainly took their time about deciding on it.
Having restarted the war, the Tigers then turned it into a personal conflict by the bomb attack on the Defence Secretary and a key lieutenant, Sarath Fonseka. Until then it was just another battle, once these two people were attacked there would be no turning back.
The last great blunder of the LTTE was in creating the human shield. When they started losing territory in the west of the country they retreated, but took the civilians with them, who they intended to use as a shield. Had they left them behind they would have been able to look after what little they had. In abandoning their property they were to be left far worse off.
To begin with they could not take everything, they took as much as they could, but whatever was left behind was likely to fall prey to thieves. In abandoning crops, the fields would fall fallow and would be need to be reworked to bring them back to production.
Worse, in the constant moving necessitated by the ever retreating Tigers the people lost what little they carried. One survivor claimed he left with two tractor loads of goods but had only two shopping bags left by the end. They lost their tools and equipment, meaning there was no way to work the land, even if they were to return to it, they lost their personal belongings,their savings, their self respect. In fact, everything.
They were exposed to severe hardship and were traumatised by the fighting and god knows what else. The bulk of the displaced were created by the LTTE, holding them in camps after the fighting ended was only the final insult.
The actions of the LTTE have done the worst damage to the Tamil people and especially so since 2005 when they condemned the entire nation to the most brutal war it has seen its history.
The Tamils and the LTTE are intertwined but the Tamil diaspora need to see the LTTE for what it was - the most damaging thing to the Tamils. There are serious and legitimate questions that need to be posed to the Sri Lankan Government, but there needs to be a clean break from the LTTE.
The Tigers, their flag, emblem and ideology have no place in any discussion on humanitarian concerns, except to be condemned utterly and completely.
Cerno was rather irritated by the fact that some lucky people seem to have enormous amounts of time to spend on web, so apologies for starting yet another post on the topic.
Reading the Drummers post, I cam across an interesting comment from David Blacker, on the role of the LTTE in dragging the country back to war.
I think the conduct of the Tigers since 2005 has been despicable and their actions have worsened the plight of the Tamils immeasurably.
To start with, the Tigers organised the boycott of the election that ensured that Ranil Wickremesinghe, architect of the CFA would be defeated. Many speculated that the boycott was organised in concert with the opposition candidate, DBS Jeyaraj certainly seems to think so. RW lost the election by a shade over 180,000 votes, the Jaffna vote alone could have carried him to victory.
The Tigers thus ditched the man responsible for the CFA and elected someone who campaigned on a platform discrediting it. They next went a step further and provoked a conflict by deliberately cutting off the water supply to farmers. It is true that MR campaigned on an anti-CFA platform, but that was just a ploy to get elected, no one seriously contemplated abandoning the CFA. They even had a round or two of talks with the LTTE, after being elected.
It seems rather strange, given the amount of mud that has been thrown on the CFA to recall that the regime actually held talks with the Tigers and to find that the leader of the government delegation "reiterated the government's commitment to peace talks".
In this context it is worth noting that it took the Government a full three years before they finally decided to abrogate the CFA in 2008, so clearly it was far from useless or harmful. If it was, they certainly took their time about deciding on it.
Having restarted the war, the Tigers then turned it into a personal conflict by the bomb attack on the Defence Secretary and a key lieutenant, Sarath Fonseka. Until then it was just another battle, once these two people were attacked there would be no turning back.
The last great blunder of the LTTE was in creating the human shield. When they started losing territory in the west of the country they retreated, but took the civilians with them, who they intended to use as a shield. Had they left them behind they would have been able to look after what little they had. In abandoning their property they were to be left far worse off.
To begin with they could not take everything, they took as much as they could, but whatever was left behind was likely to fall prey to thieves. In abandoning crops, the fields would fall fallow and would be need to be reworked to bring them back to production.
Worse, in the constant moving necessitated by the ever retreating Tigers the people lost what little they carried. One survivor claimed he left with two tractor loads of goods but had only two shopping bags left by the end. They lost their tools and equipment, meaning there was no way to work the land, even if they were to return to it, they lost their personal belongings,their savings, their self respect. In fact, everything.
They were exposed to severe hardship and were traumatised by the fighting and god knows what else. The bulk of the displaced were created by the LTTE, holding them in camps after the fighting ended was only the final insult.
The actions of the LTTE have done the worst damage to the Tamil people and especially so since 2005 when they condemned the entire nation to the most brutal war it has seen its history.
The Tamils and the LTTE are intertwined but the Tamil diaspora need to see the LTTE for what it was - the most damaging thing to the Tamils. There are serious and legitimate questions that need to be posed to the Sri Lankan Government, but there needs to be a clean break from the LTTE.
The Tigers, their flag, emblem and ideology have no place in any discussion on humanitarian concerns, except to be condemned utterly and completely.
Wednesday, July 20, 2011
Another sovereign bond issue
Sri Lanka has launched another $1,000m bond, the fourth international bond since 2007.
The issue is being managed by Bank of America, Merrill Lynch, Barclays Capital, HSBC, and Royal Bank of Scotland. Some of the banks: Bank of America, Barclays and Merril Lynch are new entrants to Sri Lankan bonds, the weaker market conditions overseas probably necessitating the larger number of players.
What is interesting is the absence of China.
China is the government's lender of choice, politicians are constantly touting the virtues of easy credit from China which goes hand-in-hand with political support at tricky international forums. The Chinese lend freely and ask no questions, a borrowers delight.
Yet, when it comes to raising bonds, the government turns to the hated West. Western banks are used and the bonds expected to be sold in the US, followed by Asia and Europe. True, they have not included the banks involved in the oil hedging deal (Citi, Deutsche and Standard Chartered), but these banks (except Citi) never bid to manage the sovereign bond issue anyway.
So, why turn to the West? Expertise? Certainly, these banks are used to structuring and marketing these products but why pay fat fees to banks and incur all the costs of international roadshows when we could simply issue bonds direct to our friend China?
Could it be that China is not particularly interested in these bonds?
China is now this country's main creditor, but the bulk of the lending is project based - for infrastructure, highways, ports, power plants and the like.
The Chinese loans are tied, meaning that the projects need to use Chinese raw materials, (steel, cement etc) and even a fair component of Chinese labour. The proportion of local value addition in these projects is a great deal less than in projects involving international lending agencies.
Thus China earns a return on its loans both in the form of interest (at commercial rates, unlike the subsidised rates offered by lending agencies) and profits on the raw material sold to the project. These projects are therefore a lot more profitable than subscribing to a straightforward bond. It may also be more secure - I do not know if the project assets are mortgaged to the Exim bank (the main lending arm the Chinese) but it is a possibility. Apart from return and security there is another reason why they may not wish to subscribe.
The Government has to have a 'story' to sell a bond and merry tales of reconstruction and infrastructure can be spun. The story only has to be believable to in order to sell, no one really monitors if the money is spent in that manner. What actually happens is that the much of the funds are used to pay interest, roll over existing debt and pay for salaries and other day-to-day expenses.
In terms of an ordinary household, the country is not borrowing to repair the roof, extend the house or buy a labour saving device like a washing machine. We are borrowing in order to buy our food and pay our living expenses, not to invest.
Perhaps the Chinese are willing to finance our infrastructure, at a price, but they may be less willing to finance our consumption, leaving that task to the international banks and bondholders.
As long as the debt is serviced, ultimately from taxes raised from the populace, the banks and bondholders will have no problem but the first sign of trouble will see them flee to the exit, probably sending the rupee to free-fall.
Update: The bond was sold at 6.25%, compared to US treasuries which are currently at 2.96%, full story here.
The issue is being managed by Bank of America, Merrill Lynch, Barclays Capital, HSBC, and Royal Bank of Scotland. Some of the banks: Bank of America, Barclays and Merril Lynch are new entrants to Sri Lankan bonds, the weaker market conditions overseas probably necessitating the larger number of players.
What is interesting is the absence of China.
China is the government's lender of choice, politicians are constantly touting the virtues of easy credit from China which goes hand-in-hand with political support at tricky international forums. The Chinese lend freely and ask no questions, a borrowers delight.
Yet, when it comes to raising bonds, the government turns to the hated West. Western banks are used and the bonds expected to be sold in the US, followed by Asia and Europe. True, they have not included the banks involved in the oil hedging deal (Citi, Deutsche and Standard Chartered), but these banks (except Citi) never bid to manage the sovereign bond issue anyway.
So, why turn to the West? Expertise? Certainly, these banks are used to structuring and marketing these products but why pay fat fees to banks and incur all the costs of international roadshows when we could simply issue bonds direct to our friend China?
Could it be that China is not particularly interested in these bonds?
China is now this country's main creditor, but the bulk of the lending is project based - for infrastructure, highways, ports, power plants and the like.
The Chinese loans are tied, meaning that the projects need to use Chinese raw materials, (steel, cement etc) and even a fair component of Chinese labour. The proportion of local value addition in these projects is a great deal less than in projects involving international lending agencies.
Thus China earns a return on its loans both in the form of interest (at commercial rates, unlike the subsidised rates offered by lending agencies) and profits on the raw material sold to the project. These projects are therefore a lot more profitable than subscribing to a straightforward bond. It may also be more secure - I do not know if the project assets are mortgaged to the Exim bank (the main lending arm the Chinese) but it is a possibility. Apart from return and security there is another reason why they may not wish to subscribe.
The Government has to have a 'story' to sell a bond and merry tales of reconstruction and infrastructure can be spun. The story only has to be believable to in order to sell, no one really monitors if the money is spent in that manner. What actually happens is that the much of the funds are used to pay interest, roll over existing debt and pay for salaries and other day-to-day expenses.
In terms of an ordinary household, the country is not borrowing to repair the roof, extend the house or buy a labour saving device like a washing machine. We are borrowing in order to buy our food and pay our living expenses, not to invest.
Perhaps the Chinese are willing to finance our infrastructure, at a price, but they may be less willing to finance our consumption, leaving that task to the international banks and bondholders.
As long as the debt is serviced, ultimately from taxes raised from the populace, the banks and bondholders will have no problem but the first sign of trouble will see them flee to the exit, probably sending the rupee to free-fall.
Update: The bond was sold at 6.25%, compared to US treasuries which are currently at 2.96%, full story here.
Sunday, July 10, 2011
Victorian morals, Victorian ethics
Keen observers of Sri Lankan society may have noted a new emphasis on morality; a morality of a rather pious, preachy kind that is supposedly based on 'traditional' values. There has been a crackdown of 'obscene' content on television, film and some worthy even a proposed a ban on miniskirts.
Viewers of television have to put up with pixellated images each time someone lights up a cigarette, pours a drink or plants a kiss.
Never mind that the so-called traditional values are far from traditional but are based largely on the morality of Victorian England, something brought by the evil conquerors, together with a sprinkling of elements from Islamic and Hindu fundamentalists.
It is a pity that we should wrap ourselves in what is a fairly disagreeable aspect of colonialism while ignoring its far more worthy aspect, Victorian ethics.
As Charles Allen puts it, as far the military and civil administration was concerned, it was 'service, service, service, every time'. To quote:
This attitude was strongest in the civil administration, in the business community, contemptuously referred to as box-wallahs, the moral code was "something akin to that which existed in England at the time of Pitt. It was not considered immoral to have a cut in every contract". Not everyone in business succumbed: .."there were always the established companies, well stocked with public school boys, where it was virtually unknown".
The attitude towards duty was mirrored in the Ceylon Civil Service (CCS), the counterpart to Indian Civil Service (ICS). Talking to the father of a friend, lets call him James, a retired man from the CCS, he was telling me of the high standards that were expected in the service. He said that since the service was fairly small (the annual intake to the CCS was 2-6 cadets a year, the entire ICS never numbered more than 1,300) word of the slightest impropriety quickly got around and a man who had a black mark found that no department would be willing to accept him, he would thus be transferred to the 'pool', a fate worse than death and would quickly resign.
James was in the service when they were first allowed to use their official cars for private work, provided they paid for the fuel. Previously officials who had no private cars would use their cars for their official work but rely on public transport for the private affairs. To do otherwise would be simply inconceivable.
V. L. Wirasinha, in his book on life in the CCS narrates a story where one officer, Ananda-Raja Hallock, was dismissed over allegation of incorrect expense claims. He had claimed the cost of bearers to carry his baggage when moving to a new station, which he was entitled to, but had claimed it at the rate of Rs.1 per mile rather than Rs.1 per bearer. Someone had got to know of this and complained. After an inquiry he was dismissed from the service.
I assumed that given its prestige, the CCS officers were very well paid. James said that this was not the case; had he worked for Lever Brothers he could have earned twice the salary, he preferred the CCS because he felt he would rather not spend the rest of his life selling toothpaste. Again, that attitude towards service.
Interestingly enough, one of the principles of administration: access to the humblest petitioner, was inherited by the British in the Mughal administration that preceded it.
This attitude may be viewed as paternalistic, it probably is but from the point of view of people subject to it, not a bad thing. The underlying principle in democracy is a series of institutional checks on the power of the rulers, to ensure that they act for the greater benefit of its citizens. If the rulers are fired with an ethic of service towards their subjects, then this will go at least partway towards achieving the substance of democracy, even if its forms are absent.
Is it time for us to tell our rulers to discard Victorian morals and embrace Victorian ethics instead?
Viewers of television have to put up with pixellated images each time someone lights up a cigarette, pours a drink or plants a kiss.
Never mind that the so-called traditional values are far from traditional but are based largely on the morality of Victorian England, something brought by the evil conquerors, together with a sprinkling of elements from Islamic and Hindu fundamentalists.
It is a pity that we should wrap ourselves in what is a fairly disagreeable aspect of colonialism while ignoring its far more worthy aspect, Victorian ethics.
As Charles Allen puts it, as far the military and civil administration was concerned, it was 'service, service, service, every time'. To quote:
The prestige of the Raj enhanced the status of the British in India...but it demanded a conscious sense of responsibility towards those under you.
...Victorian ethics of 'honour, decency, truthfulness and running a good show' persisted in India to a quite remarkable degree. ....'I would have no hesitation in saying that during the years I was in India , bribery and corruption were unknown among the British in India' asserts John Morris, one of the fiercest critics of the moral codes of the Raj.
...'Such attitudes created an administration that was 'probably the most incorruptible ever known'.
This attitude was strongest in the civil administration, in the business community, contemptuously referred to as box-wallahs, the moral code was "something akin to that which existed in England at the time of Pitt. It was not considered immoral to have a cut in every contract". Not everyone in business succumbed: .."there were always the established companies, well stocked with public school boys, where it was virtually unknown".
The attitude towards duty was mirrored in the Ceylon Civil Service (CCS), the counterpart to Indian Civil Service (ICS). Talking to the father of a friend, lets call him James, a retired man from the CCS, he was telling me of the high standards that were expected in the service. He said that since the service was fairly small (the annual intake to the CCS was 2-6 cadets a year, the entire ICS never numbered more than 1,300) word of the slightest impropriety quickly got around and a man who had a black mark found that no department would be willing to accept him, he would thus be transferred to the 'pool', a fate worse than death and would quickly resign.
James was in the service when they were first allowed to use their official cars for private work, provided they paid for the fuel. Previously officials who had no private cars would use their cars for their official work but rely on public transport for the private affairs. To do otherwise would be simply inconceivable.
V. L. Wirasinha, in his book on life in the CCS narrates a story where one officer, Ananda-Raja Hallock, was dismissed over allegation of incorrect expense claims. He had claimed the cost of bearers to carry his baggage when moving to a new station, which he was entitled to, but had claimed it at the rate of Rs.1 per mile rather than Rs.1 per bearer. Someone had got to know of this and complained. After an inquiry he was dismissed from the service.
I assumed that given its prestige, the CCS officers were very well paid. James said that this was not the case; had he worked for Lever Brothers he could have earned twice the salary, he preferred the CCS because he felt he would rather not spend the rest of his life selling toothpaste. Again, that attitude towards service.
Interestingly enough, one of the principles of administration: access to the humblest petitioner, was inherited by the British in the Mughal administration that preceded it.
This attitude may be viewed as paternalistic, it probably is but from the point of view of people subject to it, not a bad thing. The underlying principle in democracy is a series of institutional checks on the power of the rulers, to ensure that they act for the greater benefit of its citizens. If the rulers are fired with an ethic of service towards their subjects, then this will go at least partway towards achieving the substance of democracy, even if its forms are absent.
Is it time for us to tell our rulers to discard Victorian morals and embrace Victorian ethics instead?
Wednesday, July 06, 2011
A State in denial?
I opened the Daily News this morning to learn that the Ministry of Power and Energy was denying that power cuts were taking place. The pro-Government Island newspaper has however reported that power cuts in the Biyagama industrial zone were causing a lot of disruption.
What on earth is going on?
When checking around, one person in the office had experienced a power outage from 7pm to 8pm last night. When he had inquired from the Electricity Board they had confirmed that it was a power cut, another person in Ratmalana experienced a power outage from 7-8.30pm last night, although he did not bother to check with the electricity board as to the reason why.
A friend in Battaramulla told me that they were without power all day from 9am-5pm last Saturday, the Electricity Board had said it was for "major repairs" but had not specified what the repair was. Apparently in the past the CEB used to inform them of the nature of the repair so it is a bit suspicious that they were so vague this time around and adding to this is the fact that it came on sharp at 5pm, the time they said it was likely to come back on.
It seems obvious that power cuts are indeed taking place, what is intriguing is the attitude of the Government: to deny that the problem exists. This is not the first time this has happened, the contaminated petrol fiasco saw exactly the same reaction. Persistent denial, until it became impossible to deny, then attempted to blame the users or the petrol pump owners.
It seems that they have cottoned on to a whole new strategy for dealing with problems; deny, deny and deny. With the media tamed, not a lot get reported anyway so people are in the dark. It is only through personal experience, which may be bitter; as in the case of the contaminated petrol or merely uncomfortable; as in the case of a power cut, do people learn the truth.
Perhaps the Government has been spending too much time with PR firms, or perhaps the 18th amendment, in giving new life to the government has infused it with fresh confidence, but it seems that the methods of dealing with critics in the West are now being applied to voters at home.
Quite apart from the moral aspect, the denial of a problem points to a bigger issue: the unwillingness to take responsibility for a problem or to be accountable to the electorate.
It is true that people are easily fooled and politicians all over the world spend some of their time trying to make things look better than they are but if this is taken too far and the only effort spent is on painting some fantastic or Utopian picture then the consequences can be grave.
The country has just adopted a new inflation index, with a reduced weightage on food (39%, v about 45% in the old index). Given that food price inflation is high the new index will probably report a lower figure, so everybody will be happy, while the reality is ignored.
Policy needs to be shaped by a proper understanding of problems, pretending that the problem does not exist is the last thing one needs.
And why do we have power cuts? Because the electricity board is running at losses and huge amounts of power are lost in transmission. We don't know exactly how much is lost or how badly it is run because there is no information. Any possibility of getting information was killed off with the defeat of the Right To Information bill. The price of inefficiency and waste must eventually be paid and the public do pay, in terms of an erratic and uncertain power supply.
There is one little solution that will ease the problems of the CEB and cause no disruption to the public. Put the clock forward by half and hour, a simple painless solution that was working fine that was unwound: to please the astrologers.
What on earth is going on?
When checking around, one person in the office had experienced a power outage from 7pm to 8pm last night. When he had inquired from the Electricity Board they had confirmed that it was a power cut, another person in Ratmalana experienced a power outage from 7-8.30pm last night, although he did not bother to check with the electricity board as to the reason why.
A friend in Battaramulla told me that they were without power all day from 9am-5pm last Saturday, the Electricity Board had said it was for "major repairs" but had not specified what the repair was. Apparently in the past the CEB used to inform them of the nature of the repair so it is a bit suspicious that they were so vague this time around and adding to this is the fact that it came on sharp at 5pm, the time they said it was likely to come back on.
It seems obvious that power cuts are indeed taking place, what is intriguing is the attitude of the Government: to deny that the problem exists. This is not the first time this has happened, the contaminated petrol fiasco saw exactly the same reaction. Persistent denial, until it became impossible to deny, then attempted to blame the users or the petrol pump owners.
It seems that they have cottoned on to a whole new strategy for dealing with problems; deny, deny and deny. With the media tamed, not a lot get reported anyway so people are in the dark. It is only through personal experience, which may be bitter; as in the case of the contaminated petrol or merely uncomfortable; as in the case of a power cut, do people learn the truth.
Perhaps the Government has been spending too much time with PR firms, or perhaps the 18th amendment, in giving new life to the government has infused it with fresh confidence, but it seems that the methods of dealing with critics in the West are now being applied to voters at home.
Quite apart from the moral aspect, the denial of a problem points to a bigger issue: the unwillingness to take responsibility for a problem or to be accountable to the electorate.
It is true that people are easily fooled and politicians all over the world spend some of their time trying to make things look better than they are but if this is taken too far and the only effort spent is on painting some fantastic or Utopian picture then the consequences can be grave.
The country has just adopted a new inflation index, with a reduced weightage on food (39%, v about 45% in the old index). Given that food price inflation is high the new index will probably report a lower figure, so everybody will be happy, while the reality is ignored.
Policy needs to be shaped by a proper understanding of problems, pretending that the problem does not exist is the last thing one needs.
And why do we have power cuts? Because the electricity board is running at losses and huge amounts of power are lost in transmission. We don't know exactly how much is lost or how badly it is run because there is no information. Any possibility of getting information was killed off with the defeat of the Right To Information bill. The price of inefficiency and waste must eventually be paid and the public do pay, in terms of an erratic and uncertain power supply.
There is one little solution that will ease the problems of the CEB and cause no disruption to the public. Put the clock forward by half and hour, a simple painless solution that was working fine that was unwound: to please the astrologers.
Subscribe to:
Posts (Atom)