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Opinion

Dollar Crisis: What aggravated it

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by Eng. D. Godage

Total foreign currency reserves of the country were around seven billion dollars at the beginning of 2021 but it decreased to around 1.2 billion dollars towards the year end, even though the Central Bank announced that there was a reserve of three billion dollars. The net foreign assets of the total banking system are said to be a US$ 4.1 billion deficit by 2021 end. Everybody knows the suffering and difficulties the countrymen undergo as a result of the depletion of foreign currency or dollar reserves. Without elaborating on those effects, it is the intention of the writer to examine how foreign reserves depleted so fast.

Politicians, officials, public speakers very often tend to blame every government since independence over the past 70 years for ruining this country, but with regard to foreign debt, it is not applicable. Moreover, the effects of the COVID-19 pandemic were felt globally but other countries in this region did not suffer as much and face such crises like the ones faced by Sri Lanka, so it is no excuse. It is not essential to elaborate on this fact as it is common knowledge. Consequently, the writer makes an attempt to understand how and when it happened. The focus of this discussion is on infrastructure development, and not other debt instruments.

Debt burden since independence

The Oya project implemented around 1948 using local funds comes to mind. Moreover, from 1950 the major port development scheme of Colombo Harbour created the Colombo Port, one of the most modern ports at the time, by 1956 under the leadership of the Minister of Transport and Works, Sir John Kotelawala in the Dudley Senanayake Cabinet, utilising local funds amounting to 110 million rupees. While work was in progress, the ship ‘Gothic’, carrying Queen Elizabeth II, berthed alongside the newly constructed Customs Quay to christen it the Queen Elizabeth Quay (QEQ). Incidentally, the QEQ was buried in the privately developed SAGT or South Asia Gateway Terminals around year 2000.

The Mahaweli Development Project, a massive irrigation cum hydroelectric scheme originally planned for 30 years but telescoped into about six years, was undertaken by the J.R. Jayewardene government using concessionary loans as well as grants. Funds were provided based on a thorough feasibility study, with eminent engineer late Dr. A.N.S Kulasinghe and his team of engineers working as consultants. Resultant benefits are well known and they did not lead to any debt crisis in the country.

Road and railway infrastructure development has been carried out with locally raised funds. After the 2004 tsunami disaster, the Railway Department staff rehabilitated the destroyed line to recommence operations with the least possible delay. It is said that northern rail line improvements carried out later on loans under Uthuru Wasanthaya had spent two to three times the cost.

Since 1980 the country has seen another major development programme in the port sector. Studies had been conducted at a time of increasing demand for container traffic, confirming the urgent need to expand port facilities. The first phase of expansion, requiring US$ 32 million, was funded in the form of a Yen currency loan. The project progressed systematically aided by further loans, through a transparent bidding process. As a result, the Colombo Port was elevated from the global rank of 127 in 1981 to 21st in 1997. These loans were granted only after proper feasibility studies were carried out and confirmation of loan repayment capability, as affirmed by the lending Japanese Agency. Extensive borrowing for project infrastructure became the norm only after about 2000 and not since independence.

Newer debt accumulation

A Sunday English newspaper on March 9, 2014 and May 1, 2016 reported, with details from the External Resources Department, on 28 projects funded predominantly by China Exim Bank loans amounting to US$ 7,671 million, with five-year grace and 10-year repayment periods; their interest rates are not indicated but is supposed to be over six percent. All these projects are said to have been initiated through unsolicited tenders. The same newspaper published a report under the caption, “Normal tender procedure not possible for mega projects: PBJ”. This is a questionable statement. Further examination of the above list shows seven projects, all in Hambantota, totalling US$ 5,054 million, for airport, port, highway extension, railway extension and local road network. None of them seem capable of generating revenue to repay the massive loans even though they have been in operation for around 10 years by now. These loans alone require about US$1 billion per year as repayment, burdening the country, and using up its dollar reserves. During the previous regime the Hambantota Port was given out on a 99-year lease.

Did the Treasury officials who handled these borrowings not see the danger of the debt burden or debt trap and the country’s inability to repay them without adequate future revenue? One can cite the shifting global financial structure and unforeseen circumstances as the reason. But they should have been taken into consideration in any plan. High costs due to unsolicited proposals without a competitive bidding process are also an issue. As for costs, the Treasury Secretary has said that it is the engineers who determine costs. This is not an acceptable excuse.

The Colombo Port South Harbour was found to be an urgent project, and proved viable after an extensive feasibility study by 2001. After producing detailed designs, cost estimates and all implementation requisites, it was not possible to proceed due to lack of funds. The Hambantota Port project was also given high priority by the same government though two feasibility studies failed to show the viability of the project. For the Colombo Port project, the Treasury Secretary advocated commercial borrowing claiming that the lending agency conditions were unacceptable.

In fact, only one lending agency came forward to offer approximately one third of the fund requirement. The Ports Authority managed to obtain very concessionary loan of US$ 300 million in 2006, to proceed with the project, albeit after a two-year delay. The new harbour was completed successfully within the stipulated time and cost while adhering to a transparent tender process. It is worthwhile to note that the lowest cost, approximately US$ 320 million, was quoted by the Korean contractor who successfully completed it, while the next bid was around US$ 570 million by a Chinese contractor. This project seems to be generating more revenue than budgeted.

In fact, the biggest container ship in the world ‘Ever Ace’, with a carrying capacity of 24,000 TEU, berthed in the Colombo South Harbour in October 2021 as it is the only port in the region that could accommodate a ship of that scale, bringing great honour and promoting the Colombo Port.

Most Chinese funded projects that commenced during the past two decades seem now complete and in operation, spread among power and energy, transportation, airport and aviation, ports, irrigation and water sectors. Debt distribution is US$ 1,553 million in power and energy, US$ 3.99 billion in transportation, US$ 232 million in airport and aviation, US$ 1,336 million in ports and US$ 101 million in irrigation. This includes projects indicated by the aforementioned 2016 news item, and subsequent major projects like the Central Highway are not included.

Expensive ventures like the Norochcholai coal power plant costing US$ 1,346 million have helped to meet the country’s energy demands and there has to be a post project evaluation to ascertain its financial gains and loan repayment capacity. Highway projects undertaken on expensive loans do not seem to generate enough revenue to meet dollar loan repayments. Although some benefits accrue, the post project economic and financial evaluations are not satisfactory. The highest revenue on a peak day on the Southern Highway has been 38 million rupees a day. Considering the average annual turnover minus the operation and maintenance costs it could take 100 years to repay loans. Authorities should perform a post project evaluation for the benefit of future planners.

Lessons to learn

This is history but should not be discarded, for the valuable information and data therein demonstrate the actual scenario and resultant repercussions. Decision makers and economic advisors to the government, especially of the Treasury and any other relevant officials could review them.

The debt burden has aggravated the dollar crisis during the past two decades. The COVID-19 pandemic during the past two years is not an excuse as other countries in the region too have faced the same but are performing better. The negative economic growth in 2020 and the considerable dollar debt burden, with the country’s reserves collapsing have not occurred suddenly. Severe import restrictions have made day to day life of the people inconvenient and led to the collapse of some domestic industries.

The worst is yet to come, as warned by the Secretary to the President, delivering a speech in Colombo, as reported by a Sunday English newspaper on 28 Nov. 2021. He was the Treasury Secretary during the past two decades, when China Exim Bank loans were signed to the tune of billions of dollars mostly for white elephant projects, The massive dollar debt seems the root cause of most problems faced today.



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Opinion

Child food poverty: A prowling menace

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by Dr B.J.C.Perera 
MBBS(Cey), DCH(Cey), DCH(Eng), MD(Paed), MRCP(UK), FRCP(Edin),
FRCP(Lon), FRCPCH(UK), FSLCPaed, FCCP, Hony FRCPCH(UK), Hony. FCGP(SL) 
Specialist Consultant Paediatrician and Honorary Senior Fellow,
Postgraduate Institute of Medicine, University of Colombo, Sri Lanka.
Joint Editor, Sri Lanka Journal of Child Health

In an age of unprecedented global development, technological advancements, universal connectivity, and improvements in living standards in many areas of the world, it is a very dark irony that child food poverty remains a pressing issue. UNICEF defines child food poverty as children’s inability to access and consume a nutritious and diverse diet in early childhood. Despite the planet Earth’s undisputed capacity to produce enough food to nourish everyone, millions of children still go hungry each day. We desperately need to explore the multifaceted deleterious effects of child food poverty, on physical health, cognitive development, emotional well-being, and societal impacts and then try to formulate a road map to alleviate its deleterious effects.

Every day, right across the world, millions of parents and families are struggling to provide nutritious and diverse foods that young children desperately need to reach their full potential. Growing inequities, conflict, and climate crises, combined with rising food prices, the overabundance of unhealthy foods, harmful food marketing strategies and poor child-feeding practices, are condemning millions of children to child food poverty.

In a communique dated 06th June 2024, UNICEF reports that globally, 1 in 4 children; approximately 181 million under the age of five, live in severe child food poverty, defined as consuming at most, two of eight food groups in early childhood. These children are up to 50 per cent more likely to suffer from life-threatening malnutrition. Child Food Poverty: Nutrition Deprivation in Early Childhood – the third issue of UNICEF’s flagship Child Nutrition Report – highlights that millions of young children are unable to access and consume the nutritious and diverse diets that are essential for their growth and development in early childhood and beyond.

It is highlighted in the report that four out of five children experiencing severe child food poverty are fed only breastmilk or just some other milk and/or a starchy staple, such as maize, rice or wheat. Less than 10 per cent of these children are fed fruits and vegetables and less than 5 per cent are fed nutrient-dense foods such as eggs, fish, poultry, or meat. These are horrendous statistics that should pull at the heartstrings of the discerning populace of this world.

The report also identifies the drivers of child food poverty. Strikingly, though 46 per cent of all cases of severe child food poverty are among poor households where income poverty is likely to be a major driver, 54 per cent live in relatively wealthier households, among whom poor food environments and feeding practices are the main drivers of food poverty in early childhood.

One of the most immediate and visible effects of child food poverty is its detrimental impact on physical health. Malnutrition, which can result from both insufficient calorie intake and lack of essential nutrients, is a prevalent consequence. Chronic undernourishment during formative years leads to stunted growth, weakened immune systems, and increased susceptibility to infections and diseases. Children who do not receive adequate nutrition are more likely to suffer from conditions such as anaemia, rickets, and developmental delays.

Moreover, the lack of proper nutrition can have long-term health consequences. Malnourished children are at a higher risk of developing chronic illnesses such as heart disease, diabetes, and obesity later in life. The paradox of child food poverty is that it can lead to both undernutrition and overnutrition, with children in food-insecure households often consuming calorie-dense but nutrient-poor foods due to economic constraints. This dietary pattern increases the risk of obesity, creating a vicious cycle of poor health outcomes.

The impacts of child food poverty extend beyond physical health, severely affecting cognitive development and educational attainment. Adequate nutrition is crucial for brain development, particularly in the early years of life. Malnutrition can impair cognitive functions such as attention, memory, and problem-solving skills. Studies have consistently shown that malnourished children perform worse academically compared to their well-nourished peers. Inadequate nutrition during early childhood can lead to reduced school readiness and lower IQ scores. These children often struggle to concentrate in school, miss more days due to illness, and have lower overall academic performance. This educational disadvantage perpetuates the cycle of poverty, as lower educational attainment reduces future employment opportunities and earning potential.

The emotional and psychological effects of child food poverty are profound and are often overlooked. Food insecurity creates a constant state of stress and anxiety for both children and their families. The uncertainty of not knowing when or where the next meal will come from can lead to feelings of helplessness and despair. Children in food-insecure households are more likely to experience behavioural problems, including hyperactivity, aggression, and withdrawal. The stigma associated with poverty and hunger can further exacerbate these emotional challenges. Children who experience food poverty may feel shame and embarrassment, leading to social isolation and reduced self-esteem. This psychological toll can have lasting effects, contributing to mental health issues such as depression and anxiety in adolescence and adulthood.

Child food poverty also perpetuates cycles of poverty and inequality. Children who grow up in food-insecure households are more likely to remain in poverty as adults, continuing the intergenerational transmission of disadvantage. This cycle of poverty exacerbates social disparities, contributing to increased crime rates, reduced social cohesion, and greater reliance on social welfare programmes. The repercussions of child food poverty ripple through society, creating economic and social challenges that affect everyone. The healthcare costs associated with treating malnutrition-related illnesses and chronic diseases are substantial. Additionally, the educational deficits linked to child food poverty result in a less skilled workforce, which hampers economic growth and productivity.

Addressing child food poverty requires a multi-faceted approach that tackles both immediate needs and underlying causes. Policy interventions are crucial in ensuring that all children have access to adequate nutrition. This can include expanding social safety nets, such as food assistance programmes and school meal initiatives, as well as targeted manoeuvres to reach more vulnerable families. Ensuring that these programmes are adequately funded and effectively implemented is essential for their success.

In addition to direct food assistance, broader economic and social policies are needed to address the root causes of poverty. This includes efforts to increase household incomes through living wage policies, job training programs, and economic development initiatives. Supporting families with affordable childcare, healthcare, and housing can also alleviate some of the financial pressures that contribute to food insecurity.

Community-based initiatives play a vital role in combating child food poverty. Local food banks, community gardens, and nutrition education programmes can help provide immediate relief and promote long-term food security. Collaborative efforts between government, non-profits, and the private sector are necessary to create sustainable solutions.

Child food poverty is a profound and inescapable issue with far-reaching consequences. Its deleterious effects on physical health, cognitive development, emotional well-being, and societal stability underscore the urgent need for comprehensive action. As we strive for a more equitable and just world, addressing child food poverty must be a priority. By ensuring that all children have access to adequate nutrition, we can lay the foundation for a healthier, more prosperous future for individuals and society as a whole. The fight against child food poverty is not just a moral imperative but an investment in our collective future. Healthy, well-nourished children are more likely to grow into productive, contributing members of society. The benefits of addressing this issue extend beyond individual well-being, enhancing economic stability and social harmony. It is incumbent upon us all to recognize and act upon the understanding that every child deserves the right to adequate nutrition and the opportunity to thrive.

Despite all of these existent challenges, it is very definitely possible to end child food poverty. The world needs targeted interventions to transform food, health, and social protection systems, and also take steps to strengthen data systems to track progress in reducing child food poverty. All these manoeuvres must comprise a concerted effort towards making nutritious and diverse diets accessible and affordable to all. We need to call for child food poverty reduction to be recognized as a metric of success towards achieving global and national nutrition and development goals.

Material from UNICEF reports and AI assistance are acknowledged.

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Opinion

Do opinion polls matter?

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By Dr Upul Wijayawardhana

The colossal failure of not a single opinion poll predicting accurately the result of the Indian parliamentary election, the greatest exercise in democracy in the world, raises the question whether the importance of opinion polls is vastly exaggerated. During elections two types of opinion polls are conducted; one based on intentions to vote, published during or before the campaign, often being not very accurate as these are subject to many variables but exit polls, done after the voting where a sample tally of how the voters actually voted, are mostly accurate. However, of the 15 exit polls published soon after all the votes were cast in the massive Indian election, 13 vastly overpredicted the number of seats Modi’s BJP led coalition NDA would obtain, some giving a figure as high as 400, the number Modi claimed he is aiming for. The other two polls grossly underestimated predicting a hung parliament. The actual result is that NDA passed the threshold of 272 comfortably, there being no landslide. BJP by itself was not able to cross the threshold, a significant setback for an overconfident Mody! Whether this would result in less excesses on the part of Modi, like Muslim-bashing, remains to be seen. Anyway, the statement issued by BJP that they would be investigating the reasons for failure rather than blaming the process speaks very highly of the maturity of the democratic process in India.

I was intrigued by this failure of opinion polls as this differs dramatically from opinion polls in the UK. I never failed to watch ‘Election night specials’ on BBC; as the Big Ben strikes ‘ten’ (In the UK polls close at 10pm} the anchor comes out with “Exit polls predict that …” and the actual outcome is often almost as predicted. However, many a time opinion polls conducted during the campaign have got the predictions wrong. There are many explanations for this.

An opinion poll is defined as a research survey of public opinion from a particular sample, the origin of which can be traced back to the 1824 US presidential election, when two local newspapers in North Carolina and Delaware predicted the victory of Andrew Jackson but the sample was local. First national survey was done in 1916 by the magazine, Literary Digest, partly for circulation-raising, by mailing millions of postcards and counting the returns. Of course, this was not very scientific though it accurately predicted the election of Woodrow Wilson.

Since then, opinion polls have grown in extent and complexity with scientific methodology improving the outcome of predictions not only in elections but also in market research. As a result, some of these organisations have become big businesses. For instance, YouGov, an internet-based organisation co-founded by the Iraqi-born British politician Nadim Zahawi, based in London had a revenue of 258 million GBP in 2023.

In Sri Lanka, opinion polls seem to be conducted by only one organisation which, by itself, is a disadvantage, as pooled data from surveys conducted by many are more likely to reflect the true situation. Irrespective of the degree of accuracy, politicians seem to be dependent on the available data which lend explanations to the behaviour of some.

The Institute for Health Policy’s (IHP) Sri Lanka Opinion Tracker Survey has been tracking the voting intentions for the likely candidates for the Presidential election. At one stage the NPP/JVP leader AKD was getting a figure over 50%. This together with some degree of international acceptance made the JVP behave as if they are already in power, leading to some incidents where their true colour was showing.

The comments made by a prominent member of the JVP who claimed that the JVP killed only the riff-raff, raised many questions, in addition to being a total insult to many innocents killed by them including my uncle. Do they have the authority to do so? Do extra-judicial killings continue to be JVP policy? Do they consider anyone who disagrees with them riff-raff? Will they kill them simply because they do not comply like one of my admired teachers, Dr Gladys Jayawardena who was considered riff-raff because she, as the Chairman of the State Pharmaceutical Corporation, arranged to buy drugs cheaper from India? Is it not the height of hypocrisy that AKD is now boasting of his ties to India?

Another big-wig comes with the grand idea of devolving law and order to village level. As stated very strongly, in the editorial “Pledges and reality” (The Island, 20 May) is this what they intend to do: Have JVP kangaroo-courts!

Perhaps, as a result of these incidents AKD’s ratings has dropped to 39%, according to the IHP survey done in April, and Sajith Premadasa’s ratings have increased gradually to match that. Whilst they are level pegging Ranil is far behind at 13%. Is this the reason why Ranil is getting his acolytes to propagate the idea that the best for the country is to extend his tenure by a referendum? He forced the postponement of Local Governments elections by refusing to release funds but he cannot do so for the presidential election for constitutional reasons. He is now looking for loopholes. Has he considered the distinct possibility that the referendum to extend the life of the presidency and the parliament if lost, would double the expenditure?

Unfortunately, this has been an exercise in futility and it would not be surprising if the next survey shows Ranil’s chances dropping even further! Perhaps, the best option available to Ranil is to retire gracefully, taking credit for steadying the economy and saving the country from an anarchic invasion of the parliament, rather than to leave politics in disgrace by coming third in the presidential election. Unless, of course, he is convinced that opinion polls do not matter and what matters is the ballots in the box!

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Opinion

Thoughtfulness or mindfulness?

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By Prof. Kirthi Tennakone
ktenna@yahoo.co.uk

Thoughtfulness is the quality of being conscious of issues that arise and considering action while seeking explanations. It facilitates finding solutions to problems and judging experiences.

Almost all human accomplishments are consequences of thoughtfulness.

Can you perform day-to-day work efficiently and effectively without being thoughtful? Obviously, no. Are there any major advancements attained without thought and contemplation? Not a single example!

Science and technology, art, music and literary compositions and religion stand conspicuously as products of thought.

Thought could have sinister motives and the only way to eliminate them is through thought itself. Thought could distinguish right from wrong.

Empathy, love, amusement, and expression of sorrow are reflections of thought.

Thought relieves worries by understanding or taking decisive action.

Despite the universal virtue of thoughtfulness, some advocate an idea termed mindfulness, claiming the benefits of nurturing this quality to shape mental wellbeing. The concept is defined as focusing attention to the present moment without judgment. A way of forgetting the worries and calming the mind – a form of meditation. A definition coined in the West to decouple the concept from religion. The attitude could have a temporary advantage as a method of softening negative feelings such as sorrow and anger. However, no man or woman can afford to be non-judgmental all the time. It is incompatible with indispensable thoughtfulness! What is the advantage of diverting attention to one thing without discernment during a few tens of minute’s meditation? The instructors of mindfulness meditation tell you to focus attention on trivial things. Whereas in thoughtfulness, you concentrate the mind on challenging issues. Sometimes arriving at groundbreaking scientific discoveries, solution of mathematical problems or the creation of masterpieces in engineering, art, or literature.

The concept of meditation and mindfulness originated in ancient India around 1000 BCE. Vedic ascetics believed the practice would lead to supernatural powers enabling disclosure of the truth. Failing to meet the said aspiration, notwithstanding so many stories in scripture, is discernable. Otherwise, the world would have been awakened to advancement by ancient Indians before the Greeks. The latter culture emphasized thoughtfulness!

In India, Buddha was the first to deviate from the Vedic philosophy. His teachers, Alara Kalama and Uddaka Ramaputra, were adherents of meditation. Unconvinced of their approach, Buddha concluded a thoughtful analysis of the actualities of life should be the path to realisation. However, in an environment dominated by Vedic tradition, meditation residually persisted when Buddha’s teachings transformed into a religion.

In the early 1970s, a few in the West picked up meditation and mindfulness. We Easterners, who criticize Western ideas all the time, got exalted after seeing something Eastern accepted in the Western circles. Thereafter, Easterners took up the subject more seriously, in the spirit of its definition in the West.

Today, mindfulness has become a marketable commodity – a thriving business spreading worldwide, fueled largely by advertising. There are practice centres, lessons onsite and online, and apps for purchase. Articles written by gurus of the field appear on the web.

What attracts people to mindfulness programmes? Many assume them being stressed and depressed needs to improve their mental capacity. In most instances, these are minor complaints and for understandable reasons, they do not seek mainstream medical interventions but go for exaggeratedly advertised alternatives. Mainstream medical treatments are based on rigorous science and spell out both the pros and cons of the procedure, avoiding overstatement. Whereas the alternative sector makes unsubstantiated claims about the efficacy and effectiveness of the treatment.

Advocates of mindfulness claim the benefits of their prescriptions have been proven scientifically. There are reports (mostly in open-access journals which charge a fee for publication) indicating that authors have found positive aspects of mindfulness or identified reasons correlating the efficacy of such activities. However, they rarely meet standards normally required for unequivocal acceptance. The gold standard of scientific scrutiny is the statistically significant reproducibility of claims.

If a mindfulness guru claims his prescription of meditation cures hypertension, he must record the blood pressure of participants before and after completion of the activity and show the blood pressure of a large percentage has stably dropped and repeat the experiment with different clients. He must also conduct sessions where he adopts another prescription (a placebo) under the same conditions and compares the results. This is not enough, he must request someone else to conduct sessions following his prescription, to rule out the influence of the personality of the instructor.

The laity unaware of the above rigid requirements, accede to purported claims of mindfulness proponents.

A few years ago, an article published and widely cited stated that the practice of mindfulness increases the gray matter density of the brain. A more recent study found there is no such correlation. Popular expositions on the subject do not refer to the latter report. Most mindfulness research published seems to have been conducted intending to prove the benefits of the practice. The hard science demands doing the opposite as well-experiments carried out intending to disprove the claims. You need to be skeptical until things are firmly established.

Despite many efforts diverted to disprove Einstein’s General Theory of Relativity, no contradictions have been found in vain to date, strengthening the validity of the theory. Regarding mindfulness, as it stands, benefits can neither be proved nor disproved, to the gold standard of scientific scrutiny.

Some schools in foreign lands have accommodated mindfulness training programs hoping to develop the mental facility of students and Sri Lanka plans to follow. However, studies also reveal these exercises are ineffective or do more harm than good. Have we investigated this issue before imitation?

Should we force our children to focus attention on one single goal without judgment, even for a moment?

Why not allow young minds to roam wild in their deepest imagination and build castles in the air and encourage them to turn these fantasies into realities by nurturing their thoughtfulness?

Be more thoughtful than mindful?

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