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Happy New Year

Dec 24, 2010 2:15:03 PM - thesundayleader.lk

The consumer will have to bear the brunt of a possible wave of price increases in the new year, just a few days away, with electricity prices billed to go up by 8%, followed by gas and milk food price hikes as well, coupled with the cascading effects of such increases on the rest of the island’s economy.
Milk is essential for the growth of infants and children and gas and electricity may no longer be termed as luxuries, those are also essentials for a modern day society in the 21st century. In fact the Government has launched a campaign to provide “electricity for all,” whilst simultaneously emphasizing the importance of environmental protection and cleaner energy.
LPG or cooking gas is “more” environmentally friendly than the common firewood that is used for cooking here, though cooking or LP gas is fast catching up in the city and in the suburbs.
But with consumer spending power fast dissipating due to the rise in the cost of living (CoL), any increase in LPG prices without a commensurate hike in people’s incomes, will not encourage them to switch over to the more environmentally friendly cooking gas.
The onerous task before the Government is to facilitate and open up avenues to provide food, clothing and shelter at a reasonable price to its people, to throw up employment opportunities and to alleviate the masses from the ever rising CoL.
With shrinking consumer spend due to the high CoL, whatever the Government’s spin doctors, like the state run Department of Census and Statistics, by crafting Shangri-Las with their “trimmings and fillings and so called substitutes” to please and to curry favour with the powers that be, by trying not to show the true picture, the reality however may be quite the opposite and the masses certainly will not bite that lie.
Politicians and the leaders of this country, like the Emperor’s New Clothes, may be fooled by the “lies, damn lies and statistics” thrown up by their sycophants and hangers on, but not so the masses.
When they see their buying power diminishing by the day and not being able to afford to have three square meals, when they see their children go hungry, without milk and without bread, when they find avenues of employment being shutdown one by one due to the economy not taking off and when they see the fewer avenues of employment that had been available forced to closedown, caused for example by the Government’s mishandling of the GSP + issue (exports may have had grown year by year, but last year was a lower base due to the recession. However when considering with 2008, growth has been flat), then it might not be wrong to surmise that the island may be dangerously tilting ever closer to that era that prevailed prior to the outbreak of the insurgency of April 1971 that robbed the island of 13,000 of its youth.
Some of those increases, in fairness to the Government, like the possible hike in gas prices, may be unavoidable due to a rise in the prices of such commodities in the international market. With no oil or gas reserves discovered thus far in Sri Lanka and offshore, that places the island to be totally dependent on gas imports to meet its cooking gas requirements.
Other proposed tariff hikes however, such as the increase in electricity prices, as announced by President Mahinda Rajapaksa in his Budget 2011 speech in Parliament last month, begs the answer whether such an increase is justifiable.
If Mahaweli was the jewel in the crown of the Government of 1977, then tourism may be the one for this Government.
Mahaweli may be referred to as the jewel in the crown of that Government because it’s their hydro- electric power reservoirs that still help to keep electricity costs “down,” despite the inefficiency, waste, corruption and lopsided decisions taken by the Ceylon Electricity Board (CEB), for which successive governments, officialdom and CEB engineers allegedly have to be blamed.
While there may be several necklaces, like the Colombo Port development, free trade zones, all of which bring this country much needed foreign revenue, the development and exploitation of the Middle East job market, also begun during the tenure of that regime, however maybe looked at with a myopic eye, despite remittances being the “life blood” of this country, because of sociological problems associated with that sector.
It’s a well known secret that Rajapaksa and his Government have been arm twisted by the IMF to see that the loss running state run CEB and the Ceylon Petroleum Corporation (CPC) break even by next year.
This may well be the reason for Rajapaksa to have had announced the proposed electricity tariff hike, with CEB being dependent on CPC imported fossil oils to run its oil powered electricity generating plants.
As it’s Sri Lanka has one of the highest electricity tariffs in the region, confirmed by no lesser persons than Power and Energy Minister Patali Champika Ranawaka and CEB Chairman Vidya Amarapala at various fora.
Waste, inefficiency and corruption are unforgivable sins. Rajapaksa and his Government therefore must double their efforts, if such efforts are indeed being made, to eliminate those sins, so that savings thus accrued, could, at least in part be used, to cover CEB’s and CPC’s losses, without having to bow down and make unrealistic electricity tariff increases due to their subservience to IMF money. Rajapaksa, being the political creature that he is, should show his savviness, by doing a volte- face and be prepared to even go against his electoral pledges by considering the privatizations of CPC and CEB as options, in order to give a better deal to the country and to its people. After all he has apparently softened his previous hardline stance on the UN’s need to inquire into alleged war crimes committed during the latter days of the Eelam war? Likewise cannot he relent on his stance against privatization, if such a move leads to a better life for the masses who voted him to power?