Kath Noble

On the not so natural rise in electricity prices

Posted in The Island by kathnoble on April 24, 2013

How the Government is making the masses pay

Handing over Presidential Taxation Commission reportOne of the many conspiracy theories that has emerged with regard to the anti-Muslim campaign of the Bodu Bala Sena and others is that it is an attempt by the Government to distract people from other concerns, primarily the state of the economy.

If so, it isn’t working. Last week’s increase in electricity tariffs hasn’t been overlooked by anybody in Sri Lanka.

However, the Government has succeeded in convincing a fair share of the electorate that it isn’t really its fault. Keheliya Rambukwella summed up its argument at the regular media briefing on Thursday. He explained that the tariff increase was unfortunate but unavoidable, since ‘no administration can subsidise utilities forever’.

This sounds reasonable, but it isn’t actually true.

The concept of ‘breaking even’ doesn’t make sense when discussing a public enterprise. The CEB is not a company. We have come to talk of its ‘losses’, but this is to accept the neo-liberal logic that the Government claims to reject. The Ministries of Health and Education also spend more than they earn, but we don’t consider them to be ‘indebted’.

In that sense, the Opposition is right in pointing out that the Government is neo-liberal, as its economic affairs spokesman Harsha de Silva did in response to the hike. Of course he should have said ‘also neo-liberal’, since the credentials of the UNP as the vanguard of neo-liberalism in Sri Lanka are unquestionable, thanks to Ranil Wickremasinghe. Unfortunately, he combined that accurate observation with a totally misguided suggestion as to what to do about it, saying that if the economy is in so much trouble, what is needed is austerity.

Even the IMF is having second thoughts about ‘cuts’ as a response to a downturn, as its advice to the UK just days ago shows, with that country on the verge of an unprecedented ‘triple dip recession’.

Austerity isn’t the same as tackling waste and corruption. There is a difference between ensuring that expenditure is productive and targeting an overall reduction in expenditure.

In the same way, there is a difference between targeting subsidies so that the right people benefit and reducing the level of subsidies.

This is not to suggest that there is no problem with the amount that the Government spends on the CEB. It comes to 0.8% of GDP, which is an awful lot in comparison with the 1.9% that it allocates for education and the 1.3% that it gives to health.

Efforts should certainly be made to reduce this amount.

In terms of costs, Tilak Siyambalapitiya has produced a very succinct analysis (‘Talk sense about electricity costs and prices’, The Island, March 6th). He says that the approved cost of Rs. 2.56 for distributing a unit of electricity, which includes the cost of investment and maintenance of the distribution network and the supply of electricity, including metering and billing, is comparable with international norms, but could be brought down by 1% per year in real terms. A similar conclusion is reached for the transmission of a unit of electricity, with an approved cost of Rs. 0.73. He makes the same assumption as Keheliya Rambukwella that expenditure should be met by income to conclude that a unit of electricity has to be generated for Rs. 10.74, taking into account 12% losses and a total income of Rs. 15.50 per unit (10.74 = 0.88 x [15.50 – 2.56 – 0.73]), which is the case only for the CEB owned hydro and coal power stations.

An equally helpful discussion of prices is needed. The Rs. 15.50 per unit charged by the CEB is an average, and the way in which the burden should be shared is not obvious.

In response to the hike, everybody from bakers to the manufacturers of bathroom tiles have said that they will have to increase the prices of their products to compensate. This has to be taken into account in deciding who should pay how much.

Unfortunately, this is not going to happen by itself.

The Government carefully avoids debate of ‘zero-sum games’. It doesn’t want to admit that it makes choices between different groups in society, since that would mean alienating somebody. It prefers us to believe that all situations are ‘win-win’ or at least ‘lose-lose’.

This is equally true of taxation, and we should remember that the 0.8% of GDP that the Government spends on the CEB is only a problem because the share of taxation is so low and falling.

We may assume that the reason the Government has still not published the report of its Presidential Commission on Taxation, submitted to Mahinda Rajapaksa way back in 2010, is that it doesn’t want to upset people who really ought to be paying more. It thinks that it can get away with collecting almost everything from taxes on goods and services, rather than taxes on incomes, which is very bad news for people with low or no incomes.

High income earners not only pay relatively little in taxes on goods and services, they also pay relatively little for electricity.

The JVP raised another important point with regard to the electricity tariff hike. Its spokesman asked why the Public Utilities Commission bothered to hold a ‘consultation’ when it paid absolutely no attention to the opinions of anybody who participated.

Its report makes amusing reading. An unfortunate employee clearly wasted a very long time summarising the suggestions of the 275 people who either sent a written submission or made a presentation at the public hearing. Every single one of them is marked ‘no’ or ‘no comment’. Even proposals to ‘reduce corruption in the CEB’ are ruled out.

Given that the public has to pay for the opportunity to express their ideas, this is more than a little disappointing.

However, it is hardly surprising.

The Public Utilities Commission was established by the administration of Ranil Wickremasinghe, as part of its effort to privatise the CEB.

By now, everybody knows that this is a policy that has failed in many countries.

Even the Government has accepted that the private sector cannot help with electricity. At the media briefing, Keheliya Rambukwella also confirmed that it would be progressively reducing its purchases from the private sector, in favour of CEB owned power stations. If only it had worked this out earlier!

Also, it doesn’t seem to have understood why, since it is cheerfully pursuing exactly the same policy of privatisation in even less appropriate sectors of the economy.

Most extraordinarily, last week it was reported that the Government is to sign agreements with companies interested in investing in medical equipment such as MRI and CT scanners to be installed in public hospitals. The Secretary to the Ministry of Health was careful to explain that these services would continue to be free at the point of use – the Government will pay the owners of the machines according to the number of patients treated. How on earth they can’t see that this will end up in the Government spending more than if it had bought the machines itself is a mystery.

It may not be long before the Government thinks that the country’s health needs can just as well be met in private hospitals, in much the same way as it is so eager to have private universities cater to its education needs.

A little more attention to the state of the economy is therefore most certainly needed.

That doesn’t mean that the Bodu Bala Sena and others can be neglected, since they present a very serious immediate danger to society. However, what could very easily be ignored are the rest of the conspiracy theories that surround the anti-Muslim campaign. Far more likely than it being the work of Norway or Israel or India or the United States or any other country is that Sri Lankans have created this problem all by themselves. In any case, nobody else is going to solve it.

This article was published in The Island on 24th April 2013. The internet version may be accessed here.

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Calling in the marines

Posted in The Island by kathnoble on January 30, 2013

Why struggles for justice and the independence of the judiciary cannot be outsourced to the international community

20130130_Calling in the marinesAs I said last week, it is easy to become disheartened with the way that things are moving in Sri Lanka. One disappointment follows another, and each is more extraordinary than the last.

The impeachment of the Chief Justice was particularly disturbing. It demonstrated just how little space there is for dissent. Even the mild disturbance created by Shirani Bandaranayake when she ruled that the Divi Neguma bill had to be referred to the provincial councils or passed with a two thirds majority was intolerable to the administration. She had to go. It didn’t matter that there was no evidence of actual wrongdoing on her part. She was removed on the grounds that she might try to cover up the corruption of her husband, which is what Mahinda Rajapaksa claims to have done himself!

Since very few of us are willing to agree with everything that the Government says all of the time, it was appalling to see the lengths to which it is ready to go to impose its will.

No doubt that was the objective of the exercise.

Our distress was compounded by the failure of the Opposition under Ranil Wickremasinghe, who appeared to be far too busy plotting his next move against Sajith Premadasa to bother with something as mundane as the independence of the judiciary. Having successfully ousted his rival from the deputy leadership of the party – whether temporarily or permanently remains to be seen – he finally managed to pen an article on the impeachment for the Sunday Times this week, but readers may not have had the stamina to get past the rather laborious exposition of his knowledge of the history of English country houses and meetings of the Commonwealth to locate his point.

Once again, the widespread information campaign that was so badly needed to counter the propaganda put about by the Government has been left to others.

Worse, by focusing our attention on the Commonwealth and the sanctions that it may impose on Sri Lanka as a result of the impeachment, the UNP leader is pushing us into the same old trap of ‘internationalising’ what must be a national struggle.

Honestly, who cares about the Commonwealth?

If Ranil Wickremasinghe tries very hard, it may decide to move the 2013 Commonwealth Heads of Government Meeting away from Sri Lanka. But what use is that? I don’t believe that Mahinda Rajapaksa would be in the slightest bit upset.

Quite the reverse, he is at his most comfortable when under fire from abroad.

No doubt the Government is totally hypocritical when it calls people traitors for taking their problems to international fora. We all know that Mahinda Rajapaksa did the same thing in the late 1980s, when the UNP administration was butchering Sinhalese youth.

It is also wrong. There is nothing traitorous in informing the world about what is happening in Sri Lanka.

It can even be useful in some circumstances.

I don’t believe that it had any impact on the anti-JVP campaign. The architects were either convinced that Sri Lankans would never prosecute them for their excesses or too desperate to care about what might happen once it was all over. On the whole, they were right – not morally but factually. If they were punished, it was almost exclusively by extra-judicial means.

Even today, as the JVP calls for an inquiry into the discovery of a mass grave from that era in Matale, there is little chance of it being granted and no chance whatsoever of that resulting in jail time for the politicians who ordered such activities.

The JVP will not push on the issue, for to do so would be to remind people of its own role in the slaughter.

But imagine what would happen if it did. Imagine it calling on the international community to investigate, as many people are doing today with regard to the deaths of Tamils in the Government’s war against the LTTE. Would justice be done?

No.

Even after the passage of more than twenty years, and with an SLFP-led coalition in power, there is nothing the international community could do about it.

Why? Because the international community doesn’t get to vote in elections in Sri Lanka.

It is the opinions of Sri Lankans that matter to Mahinda Rajapaksa. So long as they aren’t bothered about the mass grave in Matale, he won’t be either. Likewise, so long as they don’t want an investigation into the anti-LTTE campaign, even Ranil Wickremasinghe wouldn’t do it.

The international community has zero moral authority, as everybody in Sri Lanka is very well aware.

We know that other countries have dirty wars of their own. Indeed, if we needed reminding that some things remain the same even after the replacement of George Bush by Nobel Peace Prize winning Barack Obama at the top of the world’s greatest democracy, Dirty Wars is the name of a documentary that premièred at the Sundance Festival in Utah last week.

Sri Lankans love to blame the Western media for focusing on abuses in this country while remaining silent about what their own governments get up to, but this is rather myopic. Everything we know about the crimes of Western nations has been brought to our attention by Western journalists.

According to an interview with the producers, the documentary looks at how the War on Terror, which started overtly in Afghanistan and Iraq, has now become covert. We know everything there is to know about the night raid that killed Osama bin Laden, which has even been made into a rather captivating Hollywood film, but there were 30,000 other night raids in Afghanistan that year. Nobody talks about them. The documentary recounts the story of one in which an elite squad of American soldiers killed a senior policeman and his family while they were in the middle of a birthday party, and tried to cover it up. While the survivors watched, they dug the bullets out of the bodies, then announced to the world that they had stumbled onto the aftermath of an honour killing.

How very honourable!

The American ‘kill list’, which had only seven names on it after 9/11, now includes thousands. That is thousands of people that Barack Obama has said that it is perfectly acceptable to murder, never mind whether they are holding up white flags.

It also talks of the American drone programme, which allows them to do so without getting close enough to see a white flag. Indeed, George Bush established a policy, which Barack Obama has endorsed, of dropping bombs on people even when they aren’t on the ‘kill list’. In certain areas of Pakistan and Yemen – countries with which the United States is not at war – all young men are assumed to be terrorists and can be killed as and when convenient.

This is also top secret. Barack Obama personally intervened to stop the Yemeni government releasing a local journalist who photographed the remnants of American cruise missiles that he says regularly kill civilians.

American funded warlords in Somalia are shown on camera saying in a completely matter-of-fact manner that they execute foreign prisoners on the battlefield.

The War on Terror goes on in another equally repugnant form.

Given this well known background, if the international community tried to use its economic or other power to force prosecutions in Sri Lanka, the public would rally behind the Government, and Mahinda Rajapaksa is very good at encouraging such a response.

There really is no short cut.

To succeed in the pursuit of justice, it is the minds of Sri Lankans that have to be changed. If they start to want prosecutions, it will happen.

It is a national struggle, and trying to involve the international community can only make it harder.

Likewise, ‘internationalising’ the effort to restore the independence of the judiciary is also going to create more problems than it solves.

Mahinda Rajapaksa showed how uninterested he is in the opinion of the international community by announcing the impeachment of the Chief Justice just days before Sri Lanka faced its Universal Periodic Review at the United Nations Human Rights Council in Geneva.

Deceiving ourselves may make us feel better, at least for a while, but it isn’t going to result in any actual change.

This article was published in the Midweek Review on 30th January 2013. The internet version may be accessed here.

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The one and only family

Posted in The Island by kathnoble on August 29, 2012

How Mahinda Rajapaksa is promoting his relatives to consolidate his power

The rise of Basil Rajapaksa has been rapid to say the least. Having spent years out of the country pursuing other interests, his return to support his brother’s presidential campaign was unexpected. Even more surprising was the popular backing he managed to acquire within a very short period in an unfamiliar district – he recorded the highest number of preferences in Gampaha in the 2010 parliamentary election, about as many as the next three candidates combined.

He is projected as a man who gets things done. The idea is that he will do for the economy what Gotabhaya did in terms of security, with Mahinda Rajapaksa being the figurehead who holds it all together.

The family brand is now so strong that people either love them or hate them.

It is perhaps understandable that Mahinda Rajapaksa is so obsessed with his family. Politicians adore power and want to hang onto it for as long as possible, and in this region in particular one means of extending their period of influence is to promote their relatives, lining them up for eventual succession.

Some months ago, Namal Rajapaksa gave a most amusing speech in Delhi at a forum on ‘political dynasties’ in which he claimed that the only real advantage of being the President’s son was that it had been slightly easier to get a nomination to contest elections. He argued that it was then up to the public to decide. This must be one of the most ridiculous statements of 2012. Yes, they have to collect votes, but even if they do so honestly on the basis of their image and not through the abuse of state resources that we all know is rampant in Sri Lanka, their image is only partly reflective of their capabilities. It is far more dependent on the opportunities they are given.

And both Namal and Basil have had a lot of help.

Why does Sri Lanka even have a Ministry of Economic Development? Because after the 2010 parliamentary election, Basil wanted a portfolio that would enable him to get involved in everything that might help to increase the family vote bank while making him responsible for nothing that could jeopardise it.

The Economic Development Ministry undertakes programmes that involve distributing freebies, money and jobs, especially focusing on young people in rural areas. Divi Neguma is an excellent example. Launched in 2011, its first phase involved the creation of one million home gardens. A lot of people were recruited to go around handing out seeds and equipment, or the money to buy them, and the whole exercise was given a lot of publicity. Never mind the impact of an increase in household production on farmers, since their marketing problems are the responsibility of the Minister of Agriculture.

Or is it the Minister of Agrarian Services and Wildlife? Livestock and Rural Community Development? Rural Affairs? Could Divi Neguma be run by the Minister of Food Security?

Does anybody actually remember who is responsible for these subjects?

Mahinda Rajapaksa believes in the centralisation of all useful power in the hands of his family, and the distribution of all useless responsibilities among as many other people as possible, so as to reduce the likelihood of any challenges to his authority from both inside and outside his governing coalition. He is constantly on the lookout for Parliamentarians he can induce to join the Government. Crossovers weaken the Opposition, but they also dilute the influence of each Cabinet Minister – instead of being one of about 20, they are now one of 60.

The resulting confusion obviously creates tremendous wastage and inefficiencies, which people ‘tut tut’ about from time to time.

But wastage and inefficiencies are only really actively opposed in Sri Lanka when they are sins committed by provincial councils. People are ever ready to find reasons to get rid of provincial councils, and their consumption of resources without producing much in the way of improvements to well-being is the issue cited most often as justification.

However, this problem too is created by the Government. Provincial councils don’t get a lot done because the Government doesn’t want them to do a lot.

The Government implements whatever projects it likes, wherever it likes, never mind whether their subjects fall within its purview or within that of the provincial councils. Cabinet Ministers may be given a chance to get involved to stop them feeling too bad about their increasingly powerless situation, but the really important stuff is bound to be given to a member of the Rajapaksa family. Why else would Basil have been put in charge of reawakening the East and bringing spring to the North – as far away from his constituency as one can get while remaining within Sri Lanka’s borders?

It is obviously nonsense to suggest that there are no capable people in the Northern and Eastern Provinces, or that the Chief Ministers couldn’t have done the job with appropriate support from Parliamentarians representing those areas.

There is not even the explanation generally put forward as regards Gotabhaya, that Mahinda Rajapaksa really needed somebody he could trust due to the sensitivity and urgency of the situation during the war.

There was no justification for giving the responsibility to Basil.

I have made the same argument about the recent expansion of the Ministry of Defence to include street cleaning and landscape gardening as surely the world’s only Ministry of Defence and Urban Development (‘The Army’s No-War Games’, The Island, June 20th). Gotabhaya is apparently now spearheading the Rajapaksa family’s popularity drive among the middle class in Colombo.

Mahinda Rajapaksa doesn’t want devolution on anything other than a highly selective basis to people who won’t be in a position to use the power they are given meaningfully.

Divi Neguma is his ideal model. The key actors in the programme are community-based organisations, which operate in just one Grama Niladhari division or indeed in only part of one Grama Niladhari division. This is supposed to be empowering. Indeed it might be if there was a mechanism to enable these community-based organisations to have a say on policy – if the process were actually democratic, in other words. However, this is clearly not what is intended. They are given every opportunity to discuss amongst themselves, in a whole range of different forums at the local and even national level, no doubt involving plenty of wastage and inefficiencies that people won’t mind in the slightest, but all important decisions are taken by somebody else – Basil and officials under the control of Basil.

Provincial councils, which could reasonably expect to be in charge of work to promote home gardens, and more importantly to decide whether promoting home gardens is really the best option to make people in their areas better off, aren’t given the chance. They are not the ones with the money.

Why discuss this now? Because the Government is in the process of further extending and formalising this way of operating by means of a bill that transforms what was once merely a programme into a permanent structure of the Government – the Department of Divi Neguma Development, to be established within the Economic Development Ministry – which will also take over the work of regionally-focused development bodies such as the Udarata Development Authority and the Southern Development Authority, plus the work of the Samurdhi Authority.

The move is being challenged in the Supreme Court this week by a range of different groups, including the JVP.

A particular concern is that money deposited in Samurdhi Banks could be used by the Ministry of Economic Development without oversight, while the bill says that officials will be required to maintain absolute secrecy about their work, which is rather unusual.

However, it is the implications for the coordination of the development process that are most disturbing. Is Sri Lanka really best served by a system in which everything is decided by one, two or at best three people in Colombo?

Even if passage of the bill is blocked as a result of this legal action, it is clear that the real work will still remain to be done – the growth of Basil’s empire will be only slightly affected.

Mahinda Rajapaksa will pay no attention, certainly. He will continue to promote his relatives, in the expectation that being the President’s father will bring plenty of benefits in his dotage, and the space for others to contribute will continue to be closed down.

People may not feel very inclined to care about the fate of politicians, such is the frustration that has built up. The fact that internal democracy is as much of a problem in the SLFP as it is in the UNP doesn’t seem very important. However, it is through political parties that change has to come. The impact of their internal problems is being amply demonstrated by Ranil Wickremasinghe, who is preventing the Opposition from mounting a serious challenge to the Government by refusing to give up the UNP leadership. What Mahinda Rajapaksa is doing to the SLFP should be equally obvious.

Reforms are needed, and soon.

Basil Rajapaksa’s admirers shouldn’t get agitated by this suggestion – if he is as competent as they believe, he can manage without so much assistance from his brother.

This article was published in the Midweek Review on 29th August 2012. The internet version can be accessed here.

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