Government united to kick start economy | Sunday Observer

Government united to kick start economy

President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe at a high level meeting to discuss on Meetotamulla issue in  Colombo last week.
President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe at a high level meeting to discuss on Meetotamulla issue in Colombo last week.

The IMF appears to be quite optimistic over the economic performance in Sri Lanka if the country makes necessary adjustments to project a sound economic outlook in the forthcoming years. The IMF Chief's willingness to visit Sri Lanka shows that the country is on the path to recovery from an abysmal past.

The President, addressing media heads last week said, he along with Prime Minister Ranil Wickremesinghe is pushing the country back to the path of economic recovery. The President said, we have foreign reserves amounting to US$ 5 billion and it will grow further with the enviable task undertaken by the government. Although Foreign Direct Investments are few and far between, the government is making a commendable effort in floating projects with Private Public Partnership which would yield results in time to come. The Central Bank Governor who has taken a deep look at the country’s economic performance and how Sri Lanka should shape its economy, asserts that the Hambantota Port project is a must for economic recovery given the debt trap the country is facing owing to the unplanned foreign borrowings by the previous regime. The political machinery should make things happen fast as time is running out at a rapid pace where people may lose confidence which they pinned on the unity government.

While it's a sigh of relief for the government as far as the economy is concerned, the Meethotamulla catastrophe spelt yet another blow to the government which compelled the authorities to take more assertive action for the benefit of the people. The gazette notification issued by the President to bar the obstructers who had been incited by political mavericks to indulge in anti-social activity is yet another good measure devised by the government to streamline its activity and expedite what is essential for the populace. Though inordinately late, the government has now realized that the Meethotamulla tragedy is a result of the tug-o-war between political powers that had vested interests in the matter. The catastrophe could have been avoided if timely action had been taken to move the garbage dump to another location where human habitation is minimal.

The majority of the people in this country is of the view that the tug-o-war between the political power and the officials concerned over the garbage issue should come to an end, at least at this juncture – as measures should be taken immediately to address the garbage issue. The President and the Prime Minister have made a promise that the MM dump will be taken away soon.

Garbage is no longer an issue confined to the key towns in the country; urbanization has taken its toll and areas beyond main urban sector are getting congested and cluttered, leaving no room for garbage disposing by individuals, as our ancestors used to do. Therefore, the authorities will have to look at the garbage issue seriously, looking at long-term solutions. Some urban councils have established successful waste management solutions; for instance, the Balangoda Municipal Council has developed a solution which has even won international accolades.

The solutions that the country is looking at should be practical and sustainable initiatives, instead of shifting the Meethotamulla dump to another area, the authorities should look at solutions where trash can be transformed into cash; i.e.to produce energy, fertiliser and also find ways to reduce the amount of waste diverted to landfills by educating the people.

Meanwhile, the Ministry of Megapolis and Western Development recently announced that Fairway Waste Management (Pvt) Ltd and K C H T Lanka Jang (Pvt) Ltd had been selected to carry out the task of converting municipal waste into energy in two locations - Karadiyana and Muthurajawela. But it will take about three years to show results, according to solid waste management experts.

The Meethotamulla issue is not over yet; President Sirisena told the media that a retired judge would be appointed to investigate into the matter in a deeper manner and a report submitted within a month.

While the government was busy finding practical solutions to the Meethotamulla residents in the aftermath of the tragedy, the corporate circles were discussing another proposal announced by President Sirisena at the meeting he had with the editors.

On the topic of SAITM, market analysts were enthusiastic about the government’s proposal to broad base the controversial private medical college, South Asian Institute of Technology and Medicine (SAITM), which is now under a single ownership. SAITM will then be listed on the Colombo Stock Exchange and be governed by a council of professional administrators.

The decision to broad base SIATM and thereby expand the university education system, especially, the medical education system in Sri Lanka is a good suggestion, but the government has to be cautious, not discourage such large individual investments. Therefore, the original investor had to be compensated adequately not only for the money he spent but for the ideas he invested through SAITM. Will this action discourage potential investors is a question to think over, while stock market analysts bear a different opinion on this.

They look at this proposal in a positive way. “It is heartening to note that the President is now enlightened on the long-term benefits of broad basing ownership, and has proposed listing it in the CSE as one solution to the SAITM issue,” a senior stock market analyst said.

Meanwhile, the Indian sources have confirmed Prime Minister Ranil Wickremsinghe’s visit to India this week. During Wickremesinghe’s visit to India from April 25 to 29 he is scheduled to attend a wedding in Rajasthan, and will spend April 26 in Delhi for official meetings.

Indian media quoted a spokesperson of the Indian Ministry of External Affairs as saying that PM Wickremesinghe will visit India ‘to set the agenda for Prime Minister Narendra Modi’s trip to Colombo in May’.

“The visit of the PM of Sri Lanka to India from April 25 is part of our continuing engagement with the Government of Sri Lanka at the highest level,” an MEA spokesperson has said, announcing the visit.

Officials said an MoU to develop the Trincomalee port’s prospects through operating a major oil-storage facility, LNG plant and piped-gas projects and developing it as a key transit point with major expressways and industrial zones in the region is in the final stages of negotiations. Modi will host a lunch for him, the Hindu reported.

The two sides will also hold discussions on the Economic and Technology Cooperation Agreement (ETCA) and which will be taken forward during Modi’s visit to Colombo on May 12 to join in the religious celebrations to mark International Vesak Day.

External Affairs Minister Sushma Swaraj, Home Minister Rajnath Singh and Road Transport Minister Nitin Gadkari will call on PM Wickremesinghe during his stay in India, the officials said.

The Indian media highlighted Wickremesinghe’s Delhi visit which happens only a few weeks before his trip to Beijing to attend the Belt and Road Summit that Sri Lanka has joined.

While Chinese companies have already clinched many important infrastructure projects in Sri Lanka, including the Hambantota and Colombo port development projects, India is hopeful of more projects in the North and the East of the island.

Apart from the economic agenda, Wickremsinghe is expected to discuss the ongoing dispute over fishing rights in the Palk Strait with Swaraj.

It was only 14 months ago that Swaraj visited Colombo to push India’s economic agenda utilizing the ‘transformational change’ in Sri Lanka brought by the January 8 and August 17, 2015 elections, and the government’s friendly disposition towards India.

Last week, soon after Wimal Weerawansa was released on bail from remand custody, LankaCnews.com, owned and operated by Wimal Weerawansa carried a very interesting story. It covered the visit made by Prime Minister Ranil Wickremesinghe and Minister Sagala Ratnayaka to Meethotamulla. And, instead of the usual vituperative language this particular website normally uses, it praised the humane side of Prime Minister Wickremesinghe and Minister Ratnayaka.

Political commentators were quick to spot this totally strange change of “editorial policy” and wondered if this was the first step towards Weerawansa’s next political high jump.

While Weerawansa has been planning his next political agenda on his own, the JO members were getting ready to hold their next May Day rally.

The members gathered at Basil Rajapaksa’s house in Battaramulla last week and coordinated the seating arrangements. JO stalwarts promised to bring in 3,000 odd buses to Galle Face and were jockeying to get seats near their leader. However, it is a five billion dollar question whether or not Mahinda Rajapaksa will in fact attend the rally.

In the meantime, JVP Leader Anura Kumara Dissanayake says, the JO has nothing to offer the people and the JO’s May Day rally is the only opportunity left behind for them to show their strength, which is rather doubtful.

Political commentators also abust with the possibility of President Sirisena luring at least four leading members of the joint opposition to join the SLFP’s May Day rally to be held in Kandy. “If this is to happen, the JO members will come to the Kandy stage armed with appropriate cabinet portfolios.” Given that the time frame is too short for this change to happen, commentators say there is a possibility of the already promised cabinet reshuffle to happen tomorrow.


Proposal on broadbasing SAITM

SAITM issue can be easily resolved by selling the strategic stake though the Colombo Stock Exchange (CSE) to an accredited world class medical university such as the Monash University of Australia which also has a campus in Malaysia, Director/CEO of Candor Group of Companies and President of the Colombo Stock Brokers' Association (CSBA), Ravi Abeysuriya said.

In a brief interview with the Sunday Observer, he said, the government’s decision to broad base SAITM will bring in long-term benefits and it is certainly one good solution to the SAITM issue.

Excerpts:

1. As a key figure in the industry how do you look at this proposal?

Broadbasing ownership of any State-Owned Enterprise (SOE) or a Private Enterprise has several advantages:

a. Raises governance standards

b. Performance improvements through market discipline

c. Improve efficiency and transparency

d. Improve reputation and standing

e. Obtaining finance at more attractive terms to the enterprise

f. Capital market development /Strengthen Colombo Stock Exchange

We have been continually encouraging successive governments to broadbase the ownership of enterprises by listing them in the Colombo Stock Exchange (CSE). Unfortunately, most politicians do not have the political will to do what’s right for the country in the long term due to the fear of losing short term popularity. It is heartening to note that the President is now enlightened on the long-term benefits of broadbasing ownership and has proposed listing it in the CSE as one solution to the SAITM issue.

2. If SAITM is to be listed on the CSE, what is the best method you would recommend?

Listing can be done by the recently proposed “All or Nothing” (AON) method by The Securities and Exchange Commission of Sri Lanka (SEC). The AON method allows bidders who are pre-qualified based on how they will add substantial value to the enterprise being listed and to the country, to exclusively bid for all or nothing of the strategic stake being offered. The primary benefit of the AON method is that the strategic parcel will go to the most suitable pre-qualified buyer (or a consortium) at an optimum price determined by price discovery, which will be a competitive and transparent market bidding mechanism over 3 market days. Thus, the AON method addresses the public outcry against state owned assets being sold to political henchman at a substantially undervalued price that occurred during successive governments.

3. What sort of long-term benefits would it create for the education sector, especially, the medical education sector in the country?

High standards in medical education, particularly, in the examination process and clinical training of doctors after passing out is imperative to Sri Lanka. Maintaining such high standards should be the responsibility of the Government through the University Grants Commission and the Sri Lanka Medical Council. All state owned and privately owned degree awarding universities should be internationally accredited and meet the identical standard. The SAITM issue can be easily resolved by selling the strategic stake though CSE to an accredited world class medical university such as, the Monash University of Australia which also has a campus in Malaysia.

Such a solution will not only stem the enormous amounts of foreign exchange flowing out of the country for medical education by Sri Lankan students but also attract foreign students to come here for their medical education providing a valuable source of foreign exchange to the country. If Sri Lanka adopts global standards of medical education, we would be able to compete with countries such as Australia, Malaysia and United Kingdom to attract foreign students, and Sri Lanka could become a destination for medical tourism where international patients come for their medical treatment and elective surgeries to Sri Lanka like they do to several other countries. (http://medicaltourism.com/Forms/Destination.aspx)

Of course, for all this to come through we need the “Political Will”to do what’s right for the country in the long term without fearing those who are shortsighted or try to protect their turf! 

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