Kalabala…kalabala…kalabala

The conversation about last week’s commotion created by cart-puller Pedris in a drunken stupor continued this week with Kussi Amma Sera asking,“

I asked. “she replied, bringing in my morning’s elixir – a good, steaming cup of tea. Nothing like a cup of tea to energise the brain, muddled mind and unfit body in the morning!

The busybody was referring to a conversation she had overheard that I had with economist Dr. Sirimal Abeyratne whom, we welcome today as the Business Times’ new weekly columnist to spin a yarn over the economic happenings in the country. His down-to-earth column will hopefully clear doubts the Kussi Amma Seras and other salt-of-the-earth Sri Lankans have about inflation (“Government figures are always misleading”), why the country needs to borrow and why people have to pay these debts and so on.

our own Kussi Amma Sera commented. She has a point. Many economists have expressed concern that the ‘truth’ about the Sri Lankan economy and other intellectually-connected economic issues doesn’t reach the larger populace of the country, for many reasons including highly technical writing that goes over the head of the common man. Having said that, welcome Dr. Abeyratne!

Back to the topic on which means commotion in Sinhala or in Tamil, today’s yarn is about bungling bureaucrats … giving a break to our dear politicians because it’s officials who are largely responsible for executing and implementing state policies. If execution and implementation have major issues, systems collapse and this is, to some extent, seen happening in Sri Lanka these days (not forgetting the fiasco in previous budgets).

Lack of coordination between government agencies is a fundamental flaw in the affairs of the state these days. Given below are two recent examples.

Just last week the much-awaited regulations to enable the enforcement of a new Foreign Exchange Act passed by Parliament and replacing the archaic Exchange Control Act, were gazetted. It was done under the hand of Prime Minister Ranil Wickremesinghe as the Minister of National Policies and Economic Affairs.

These regulations have been cited as the Foreign Exchange (Capital Transactions in Foreign Exchange Carried On by Authorised Dealers) Regulations No. 2 of 2017. (See --http:// documents.gov.lk/files/egz/2017/11/2045-56_E.pdf)

Under the new rules, companies listed in the Colombo Stock Exchange can freely invest up to US$2 million or the equivalent in any Central Bank-designated foreign currency in shares, units, debt securities or sovereign bonds overseas while the same investment in the case of unlisted companies is restricted to $500,000, partnerships to $300,000 per annum and individuals to $200,000. A company or partnership is entitled to utilise up to $300,000 (per annum) in opening overseas offices.

The regulations also provide for Sri Lankans residing overseas who are either dual citizens or have permanent residency (PR) in another country to obtain loans from Sri Lankan commercial banks to purchase, construct or renovate a residential property. That is the nice part.

The problem, however, is a serious ‘error’ or, if one may call it, lack of communication between state agencies, on these regulations (probably prepared before the budget was presented on November 9). Section 4 under Schedule II of the regulations deals with ‘Limitations’ which restricts foreign investment to 40 per cent ownership (unless special approval has been granted by the Board of Investment) and two businesses listed in this section on limitations are freight forwarding and shipping agencies.

This is contrary to the budget proposal freeing the shipping industry of any restrictions in foreign investments. The proposal itself has drawn fire from local agents but that’s not the topic of discussion today.

According to Finance and Media Minister Mangala Samaraweera’s budget proposal number 97, the Sri Lanka Ports Authority Act, No. 51 of 1979 and the Merchants Shipping Act, No. 52 of 1971 will be amended to cater to the demands of modern-day logistics and marine industry. “This will also ensure healthy competition, an independent Ports regulator will be introduced. Restrictions on foreign ownership of shipping and freight forwarding agencies will be lifted. This will enable major international shipping lines and logistics operators to base their operations in Sri Lanka,” the Minister has said.

What appears to have happened is that due to a lack of coordination between state agencies (PM’s ministry and Mangala’s ministry), sections of the old regulations pertaining to foreign exchange rules have been included in the new rules in a ‘cut-and-paste’ job. This is no fault of the Prime Minister or the Finance Minister but the officials of the relevant ministries and departments.

The only way to change these rules is through another gazette notification, which going by an earlier faux pas, would take days … nay… weeks given the snail’s pace of today’s bureaucracy.

This is in the context of the other example – the toddy Bill after toddy was brought under a ‘licensing raj’ (permit) which had many errors. While the October 24-dated Bill (the ‘erring’ gazette issue was reported in a Business Times story on November 5) had no reference whatsoever on the re-introduction of a toddy licensing system as announced by the Finance Ministry. It said that “no tree producing toddy, other than kithul tree shall be tapped”. Subsequently, an amendment to the Bill was ‘inserted’ which read: “This clause amends section 15 of the Excise Ordinance (Chapter 52), and the legal effect of the section as amended is to include the requirement of obtaining a licence for tapping any palmyrah tree and coconut tree which produces toddy.”

However, the corrected version of the Bill hasn’t amended Section 15 of the old Act to allow licensing which is how the due process should occur. As of November 24, the amendment is yet to be made. “Some legal observers (also) expressed the view that while it may not be illegal to make such changes on an already issued bill, the errors mislead the public and imply unprofessionalism amongst some officials in rushing to make public a bill that was half-done,” the November 5 Business Times story said.

In both cases, an official has jumped the gun and issued a gazette or bill which in the first case was incomplete and in the second case (foreign investment in shipping) displays incompetence.

While contemplating my next sentence, I am awakened by Kussi Amma Sera shouting out to Seetha, her comrade-inarms in the neighourhood, in the garden across the road:

Inquiring further, she was referring to a tribute concert on November 26 in Colombo for the legendary baila singer whose hits like ‘

or the favourite are sung lustily even today. While I too hope to make a beeline to the concert venue, music which is good for the soul may be just the elixir that some officials need to wake up from their deep slumber.