Saturday 25th November, 2023

The exploitation of Sri Lankans continues unabated. The private sector stands accused of maniacally pursuing profit maximisation at the expense of the public, but sadly the public enterprises are no better, the worst culprits being the lending outfits and the state monopolies, especially in the power and energy sectors.

Debt, or the accumulation thereof, to be exact, is the bane of Sri Lanka, which has become bankrupt mainly due to its chronic indebtedness, which worsened under successive governments and spun out of control during the early stages of present dispensation. Equally serious is the exploitation by various lending agencies, both state and private, of the public with impunity. The hapless victims have been left without anyone to turn to.

Much is being spoken about debt traps these days. The West would have the world believe that Sri Lanka finds itself in a Chinese debt trap, but China has vehemently denied this allegation as part of a sinister western propaganda campaign against it. But there is a debt trap, which is real and affects millions of ordinary Sri Lankans who borrow from microfinance outfits.

Laws have been introduced to regulate the microfinance industry, which is believed to date back to the early 20th Century, when the Thrift and Credit Cooperative Societies were formed under the British government. Most microfinance entities have become loan sharks worse than village moneylenders, and Microfinance Act No 06 of 2016 was introduced to safeguard the interests of the public, but the debtors’ lot has not improved at all.

Online loan schemes have become the order of the day globally, and most borrowers find themselves in trouble. In July 2023, an Indian couple committed suicide as they came under pressure from a loan app company to pay back a loan. The JVP has revealed the magnitude of this problem in Sri Lanka. Some of these companies grant loans online at 365% interest, former JVP MP Wasantha Samarasinghe has told the media. It is well-nigh impossible for the ordinary public to obtain loans from the mainstream banks because they cannot put up collaterals, and the number of people who borrow from microfinance companies and loan app outfits is on the rise, and they are invariably fleeced and unlawful methods are employed to deal with defaulters.

The incumbent SLPP-UNP government has been equally greedy and ruthlessly exploitative. Former Minister of Power and Energy Udaya Gammanpila told Parliament yesterday that the Ceylon Electricity Board (CEB) charged its customers 12 times the cost of producing electricity. If so, it is highway robbery! He has said the captive customer base must not be made to pay for the CEB’s sins.

Dr. Tilak Siyambalapitiya, a respected expert on power and energy, has pointed out in a recent article published by The Island that Sri Lanka’s electricity prices now reaching the highest in the region and grocery store here pays the same price for electricity as his or her counterpart in Singapore, the highest in south and southeast Asia. He has also revealed that a factory in Bangladesh, South Korea, Malaysia or Vietnam pays 40% less for electricity than in Sri Lanka. A medium household in Sri Lanka pays twice more for electricity than its counterparts in India, Hong Kong, Vietnam, Thailand and four times more than its Malaysian counterpart.

The government must not be allowed to use the country’s bankruptcy as a licence to fleece the public purportedly to boost the state revenue to spur economic recovery. It is imperative that electricity be reasonably priced. The government, whose leaders are responsible for the current economic crisis, had better bear in mind that it is testing the people’s patience, which is wearing thin.