While America mulls ban on aid to SL
US multi-nationals lobby their govt. to do business with Lanka
Boeing, Coca Cola campaigners

July 25, 2011, 9:11 pm
Images of the letter sent to Secretary of State by US multinationals
Close on the heels of a US House Foreign Affairs Committee decision that
American aid to Sri Lanka should be banned, some of the biggest American
multi-nationals have written to the US government explaining their intention
to form a Coalition for US-Sri Lanka Business to promote commercial
activities here stating that it "will generate substantial benefits to both
countries, including additional America jobs resulting from increased
exports across a number of US industries. "
Members of the Coalition, including giant aircraft manufacturer Boeing and
the world’s leading beverage maker Coca Cola, have told US Secretary of
State Hilary Clinton, Commerce Secretary Gary Locke and US Trade
Representative Ron Kirk that they have already "taken significant steps
towards doing business in Sri Lanka" and "look forward to working with you
to find ways to enhance our nation’s commercial partnership with Sri Lanka".
Following is the full text of the letter (dated June 21, 2011) sent by
twelve leading American companies:
It is with great pleasure that we announce that our companies have agreed to
join the efforts being made to launch a Coalition for U.S.- Sri Lanka
Business for the purpose of (1) ensuring that the growing relations between
these two nations include a thriving economic partnership, and (2) promoting
U.S. business involvement in the reconstruction and development of Sri Lanka
as the nation sustains a new era of peace, hope and unity.
All of our companies are presently active in, have taken significant steps
towards, doing business in Sri Lanka. As a democratic nation with over 21
million highly-literate citizens, we have long been convinced of Sri Lanka’s
attractiveness for commercial activity and investment. And now, in a time of
reconstruction, we see concrete opportunities for American participation in
development projects in Sri Lanka.
In fact, Sri Lanka has already demonstrated tremendous signs of economic
progress:
Sri Lanka’s economy is the second-fastest growing in Asia. Following an
impressive growth of 8% in 2010, the island’s economy is expected to grow at
an even faster rate of 8.5% this year.
Per capita income in Sri Lanka more than doubled over the past four years,
prompting the IMF to upgrade the nation to "middle income" status.
For the first time in the country’s history, the rate of unemployment has
dropped considerably from 14% about 6-7 years ago to less than 5% last year.
Sri Lanka has maintained a record low inflation rate.
Sri Lanka’s stock market was Asia’s top performer in 2009.
Tourist arrivals grew almost 50% last year and Sri Lanka expects 2.5 million
arrivals in 2016.
We believe that the active engagement of U.S. businesses in the Sri Lankan
economy will generate substantial benefits to both countries, including
additional America jobs resulting from increased exports across a number of
U.S. industries. As such, we look forward to working with you to find ways
to enhance our nation’s commercial partnership with Sri Lanka.
Two suspect brothers in Putur bank heist yet absconding
July 25, 2011, 9:27 pm
by Lal Gunesekera
The CID has not yet been able to trace the whereabouts of two brothers,
Krishnan Subesh Anthonydas and Krishnan Ramesh, wanted in connection with
the Rs. 175 million heist (Rs. 160 million in cash and Rs. 15 million in
jewellery) at the People’s Bank branch in Putur on June 30.
Police sources told The Island that the two suspects from Batticaloa were
absconding and six persons, including the mastermind of the robbery had been
arrested and they were being interrogated.
The mastermind was taken into custody by the CID and the Batticaloa Police
from a safe house in Wennappuwa. The other five, now being questioned,
belong to the same family. The police recovered a T56 automatic and part of
the jewellery robbed from the bank.
India ranks fifth in wielding economic clout globally, says study
July 25, 2011, 9:34 pm
BY S VENKAT NARAYAN Our Special Correspondent
NEW DELHI, July 25: The Indian government ranks fifth in wielding economic
clout globally after the United States,China,Japan and Germany, and is ahead
of European powers France and the United Kingdom, according to a study just
released.
Authored by the government’s Chief Economist Advisor Kaushik Basu, it was
released on the eve of the economic reforms that were launched on July 24,
1991 by then Finance Minister Dr Manmohan Singh, now prime minister.
In the 20 years since then, India’s economy has quadrupled to US$1,538
billion, growing by about 7% a year on an average, and by over 9% during
2005-07. Its foreign exchange reserves stand at a staggering $315 billion
this month. Its exports in 2010-11 amounted to $245 billion.
The study suggests that India has done well in the last decade. It uses a
new four-parameter Index of Government Economic Power (IGEP) to rank 100
countries from 2000 to 2009.
India moved up three notches from eighth in 2000 to fifth in 2009, thanks
partly to the sustained 9%-plus growth in the years preceding the global
financial crisis that saw the country’s share in global GDP rise to 5.4% in
2010 from 4.6% in 2000.
The index, which uses three broad indicators to gauge a government’s
economic prowess, captures China’s stupendous rise on the global economic
landscape. The dragon overtook Japan in 2003 and is now closing in on the
US.
=The index is based on government revenues, human capital and the ability to
influence foreign markets (judged with foreign exchange reserves and exports
of goods and services).
It concludes that Russia increased its economic standing and notes the
dramatic decline of the UK and Canada on the world stage. BRICS
nations–Brazil, Russia, India, China and South Africa– have replaced the
dominant economies of the last century in the shift in global economic
balance from the west to the emerging markets. The UK and Canada, among the
top 10 in 2000, have been replaced by Russia and South Africa in 2009.
"These variables broadly reflect aspects that contribute to a government’s
economic clout, voice and negotiating leverage by capturing elements like
its ability to raise resources, its creditworthiness and credibility in
international financial markets, its influence on global economic activity
and its potential in terms of human resources," say the study. It was
co-authored by Supriyo De, Rangeet Ghosh and Shweta.
DK Joshi, chief economist at CRISIL–Credit Rating and Information Services
of India Ltd–broadly agrees with the findings. "India’s economic growth has
catapulted its economic power. Consequently, its stature has grown
significantly. Therefore, in relative terms, I think India’s bargaining
power should have improved," he said.
India’s share in world exports of goods and services has increased from 0.7%
in 2000 to 1.7% in 2010. And in terms of potential human capital, India’s
share in world population is 17.8% in 2010–up from 16.6% in 2000.
"The production base of the world is moving to the East; Asia, Brazil, etc.
It’s completely visible. They seem to be growing very quickly. This is the
biggest thing happening in the world right now," The Economic Times quoted
Robin Burgess, Professor at the London School of Economics (LSE), as saying
in a report today on Basu’s study.
However, some others are slightly critical of the study, saying it is too
simplistic, based on far too few variables. Says Biswajit Dhar, director
general, Research and Information System: "The realpolitik in this is far
more complicated. How the rest of the world should perceive our government
should also depend on issues like inclusive growth and the quality of human
capital. The high government revenue in this case should be deployed more
effectively."
Economistic Thesis invalidated at northern elections
July 25, 2011, 7:02 pm
Voters walk to a polling station in Jaffna, Sri Lanka, Saturday, July 23,
2011. Sri Lankas northern Tamil heartland is nervously calm to elect local
councils following the countrys long civil war. (AP)
By Jehan Perera
Defeats suffered by the ruling alliance at the local authority elections in
the North would have come as a disappointment to the government, which
registered its accustomed victories elsewhere in the country. For the past
month a formidable array of government ministers, said to be as many as 40,
are reported to have spent much time campaigning in the North. This included
President Mahinda Rajapaksa himself. Although the election laws disavow the
offering of material inducements during the campaign period, these
government leaders did not go empty handed to the North. The government’s
media itself took pride in mentioning that goods as diverse as water pumps,
sarees and squatting pans had been distributed amongst the people. While
there was no doubt that the war affected people of the North could do with
this largesse, the election period was not the appropriate time to
concentrate such efforts in term of the electoral law that forbids cheating.
The government leaders also spoke much about the billions of rupees they
had spent on economic development and job creation in the North, as well as
elsewhere in the country, and promised more billions would be made
available. They opened new buildings, and it is being said even those built
by others, and claimed the credit for doing so. The walls of the Northern
towns were pasted over with posters of government leaders, which was not in
conformity with the electoral laws, but there was no one with the capacity
or resolve to take them down. No doubt the fact that some members of the
very large military force that is stationed in the North were reported to be
putting up these posters would have deterred anyone from taking them down.
At the very beginning of the election campaign some of those in military
uniforms had shown where they stood when the broke up a meeting of TNA
parliamentarians.
When election monitors from the South went to the North a few days before
the elections, they met with an intimidated and fearful population. Some of
them spoke of various irregularities taking place in the pre-election
period, but did not wish to put their names to any of the complaints. In
this context, there were some of the Northern citizens who spoke in
strategic terms about the inadvisability of voting against the government
and risking its anger and thereby making a bad situation even worse. There
were also those who spoke of voting for the government in order to ensure
that the promised economic development and job creation would indeed come
their way. The government itself appeared to be banking heavily on its
belief that economic development and the prosperity that can flow from it
would be the priority concern of the people of the North.
Opposing nationalisms
However, the election result in the North has proved otherwise. Indeed, the
result ought not to have come as a surprise. At nearly all the previous
elections in the North, it was the opposition that had obtained the larger
share of votes. This included the Presidential and General Elections two
years ago, as well as those local government elections held earlier this
year. Perhaps it was the scale of the government’s defeat in the North that
was surprising. The people of the North, as well as in the local
authorities in the East where Tamils were a majority, voted for the Tamil
National Alliance by wide margins that ranged from 70 to 80 percent.
This contrasted sharply with the government’s victories elsewhere in the
country, where the ruling alliance won by majorities that generally exceeded
60 percent. There too the government spoke of the economic development it
had brought and the billions of rupees that had been spent and would be
spent for the people in the future. In hindsight it would appear that the
government’s miscalculation was to speak to the Northern constituency in the
same manner it spoke to the Southern one. The promise of economic
development and of standing up against the West on issues of national
sovereignty did not evoke the same response from the Northern voters as it
did with the Southern voters.
There is no doubt that the government has succeeded in winning the hearts
and minds of the Southern voters who are mostly Sinhalese with its mixture
of economic and anti West nationalism. But this did not resonate with the
Northern voters who are of Tamil ethnicity. What appears to have resonated
with them was the Tamil nationalism articulated by the Tamil National
Alliance. For the Tamil voter it would seem to matter more that they have
political rights to be free of the massive military presence in their midst
and to have their own elected representatives make decisions for them rather
than to have Colombo decision makers make those decisions. If the ethnic
polarization in the voting pattern between North and South is to end, it is
necessary for the government to stop denying the existence of ethnic
differences within the polity and instead deal differently with the problem.
Rejuvenating Opposition
The manner in which the government focused on the local elections in the
North, and invested the time and effort of its leading members, gave an
indication of the importance that was given to these elections. A
convincing electoral victory in the North would have given a message to the
world that the Tamil people of the North, where the war was last fought,
were not going to hold the devastation of that war against the government,
but were prepared to embrace it and move forward with it. Victory at those
elections would also have strengthened the government’s argument that the
last phase of the war had indeed been a humanitarian operation to rescue the
trapped Tamil people from the clutches of the LTTE.
Since winning the war against the LTTE over two years ago, the government
has also been steadily backtracking on its earlier promises to strengthen
the devolution of power to the North and East. President Rajapaksa’s
enigmatic statement during the time of the war that he would offer a
political solution that would be "13th Amendment Plus One" has yet to
materialize. Instead there are now those within the government to argue
against the need for the devolution of power at all and advocate the further
centralization of power practiced by the government. A victory at the polls
would have made the government’s case stronger that economic development was
indeed a preferred substitute for political rights.
With its failure in the Northern polls, it is time for the government to
think anew on addressing the challenges before it that come from within the
Tamil polity and internationally. Hopefully, the TNA would also rise to the
occasion and be a part of the solution unlike the LTTE, which had the
conviction that it did not need to care about what happened in the rest of
the country so long as it had its own way. With the main national
opposition party, the UNP, in deep trouble and increasingly feeble in its
opposition, it is important that the TNA should add national concerns about
good governance and human rights to its agenda of Tamil nationalism. A
rejuvenated opposition is needed within the country if constructive pressure
is to be put on the government to change its ways.