Waste and corruption lead to economic crisis

OnaTVprogrammelast week, JVP parliamentarian Sunil Handunnetti challenged the Ceylon Petroleum Corporation (CPC) to disprove his claim that it was making a profit of Rs.69 on every litre of petrol.

In editorials last week and the week before we also pointed out that the price of Saudi Crude was Rs. 91 a litre and not Rs. 113 as claimed by the CPC.

A minister who also spoke tried to defend the Government by saying there were expenses for freight, insurance and local transport. But a UNP member charged that the CPC’s annual loss of about Rs. 90 billion – despite making a profit on fuel was largely due to waste and corruption on a massive scale.

It appears that the CPC and government leaders are intent on deluding the public by various devious means to justify the increase in fuel prices which inevitably leads to rises in the prices of many other items and an overall increase in the cost of living.

If the increase of fuel prices was genuinely prompted by an increase in the world price of crude oil, it could have been justified. Subterfuge and the use of downright lies, the people and the civic action groups need to come out and express concern and protest over a crisis millions of people suffer while some politicians and officials make millions on fuel rackets.

The Rajapaksa regime for the first time after it was elected had been refused the next tranche of the loan of about US$1 billion from the International Monetary Fund (IMF). This forced the Government to borrow at market rates from commercial banks and it is interesting that these borrowings have been officially listed in a media statement as expenditure for ‘development’, like the rehabilitation of our road network.

But most independent economists point out that these funds are urgently needed to enable the Government to service the repayment of its loans amounting to billions of dollars. As many independent economists see it, the downhill path our economy is going on is similar to the current crisis in Greece and Government economists perhaps did not realise that there was going to be an end to the post-war honeymoon of spending, caused by the callous expenditure being incurred by our Government in so many ways on a daily basis.

We can quote as an example, the expenditure incurred in taking the standard plane load of Government favourites who accompany the President on his frequent trips abroad. The March 15 Japan Times reported that two floors of the Imperial Hotel in Central Tokyo had been booked by our Government, one to house the visitors and the other for the Exhibition being held to promote Sri Lankan Exports to Japan. But the possibility of exporting is dim with electricity rates likely to soar and many exporters saying they may have to shutdown.

The costs incurred in the Lotus Tower in Colombo and the Hambantota Harbour have now to be repaid from funds borrowed at commercial rates of interest.