Public proposals for Budget 2017 and Plans beyond 2017
Posted on October 8th, 2016

DR.C. ANTON BALASURIYA

Prior to providing my thoughts, I need to define the parameters within which these recommendations are made.

  1. The proposals target the anticipated government revenues and expenditure for the financial year 2017 and planned programs beyond 2017.
  2. Government revenues derived would normally be from personal income taxes, corporate taxes, sales taxes, value added taxes, capital gains taxes, exercise taxes, license taxes, inheritance taxes and government borrowings among others.

3.The expenses would include government expenditures on current goods and services (consumption) and investment expenditures (infrastructure) and transfer payments(unemployment and retirement benefits) and debt servicing among others.

  1. The type of budget to be a deficit budget (anticipated expenditures being greater than revenue)
  2. Some of the proposals and areas identified cannot be included in the 2017 budget due to the time needed for feasibility study and evaluation and development of an activity plan. However if they are worthy of consideration they can be included as policy initiatives of the future.

Contents Page

Foreword                                                                                                        1

Principles of the Budgeting Process                                                               1

(1) How do you raise Finance and use it intelligently                                    3

(2) Other Policy Avenues to raise income and reduce spending                    6

(3) Policy on Small and Medium Business                                                     9

(4)  Social Welfare Policies                                                                             17

(5) Health Sector Policies                                                                               17

(6) Education Sector Policies                                                                          18

(7) Management of the Public Sector                                                             21

(8) Infrastructure Development                                                                      23

(9) Policy Improvements in Trade and Industry                                             27

(10) Food security & Environment Friendly Initiatives                                 28

(11) Housing                                                                                                   29

(12) Foreign Exchange inputs                                                                        34

 

Foreword

Prior to providing my thoughts, I need to define the parameters within which these recommendations are made.

  1. The proposals target the anticipated government revenues and expenditure for the financial year 2017 and planned programs beyond 2017.
  2. Government revenues derived would normally be from personal income taxes, corporate taxes, sales taxes, value added taxes, capital gains taxes, exercise taxes, license taxes, inheritance taxes and government borrowings among others.

3.The expenses would include government expenditures on current goods and services (consumption) and investment expenditures (infrastructure) and transfer payments(unemployment and retirement benefits) and debt servicing among others.

  1. The type of budget to be a deficit budget (anticipated expenditures being greater than revenue)
  2. Some of the proposals and areas identified cannot be included in the 2017 budget due to the time needed for feasibility study and evaluation and development of an activity plan. However if they are worthy of consideration they can be included as policy initiatives of the future.

The principles of the budgeting process(I presume present budget planners are using a similar framework)

(a)  Need to identify broad goals of development strategy for the country. For this to take place it is imperative that all parties in government, especially the two premier parties (UNP and  SLFP) agree on a common policy platform, on programs  and strategies for the core areas, notwithstanding which party  is in control at any one time .

These sectors are Health, Education, Social Services, Agriculture, Industry, infrastructure and State and Private business. No matter what party comes into power the core areas need to be the same to avoid all the failures and disasters of the last 60 years

(b At the outset, in developing a free budget estimate devoid of financial limitations, the principle Rule of three need to be followed i.e., Essential, Desirable and Dispensable(EDD).

(c) Thereafter, initially develop a free budget estimate encompassing all the development goals of the Government  under  each ministry including those already in progress, following the rule of three(EDD).

(d) Once the free budget estimates are made, identify the monies available and trim the activities to meet with expected income using EDD.

(e) Under each heading specify activities to achieve the required goals

(f)  Establish a time line in weeks, months and years to complete each activity.

(g) Identify the manpower and man days needed to each activity area and costs of same

(h) Estimate total costs of each activity area

(i) Identify final outputs, goals and ripple effect of each activity

(j) Identify the linkages between Ministries on each activity to prevent repetition and similarity so as  not to waste resources

(k) Identify against each activity the finances needed and how they are to be met i.e.,  finances already available from previous funds, the portion the government will provide, loans and grants which could be garnered, aid money etc., among others.

(l) Prepare a performance appraisal grid for each activity (bar charts), showing level of completion, financial resources used, manpower and raw material usage to show weekly, monthly and quarterly progress as per original estimates  based on above, adjustments could be made to keep the projects on track

NOTE: I am sure all of these planning tools may already be in use or something similar. However I encourage the professionals who are involved in the budgetary process to refer a manual termed “A framework for improved state and local budgeting” written by the National Advisory Council on State and Local budgeting of USA (available on the internet)

(1) How do you find the finance and spend  it?

There are three  aspects to this question  (a) the methods of finding the finances (b) control of the expenditure (especially waste and leakages) and (c)cost benefit analysis of existing structure so as to either eliminate or reduce waste and inefficiency

(a) The method of finding the finances

One main source that all governments resort to is the tax avenue

Tax revenue in a country serves as life blood for the government. For example, in developing countries the tax revenue ratio (the ratio between average revenue and gross domestic product)  fall far below   that of  developed countries.  While currently, that ratio in developed countries is over 35%.  In developing countries,  this ratio is below  15% and in Sri Lanka below 12%.

Development aid and tax income provides financial resources to a country to finance the Public Sector expenditure.  However, plans based on tax income are undermined due to tax avoidance and tax evasion.

Tax avoidance which is a tax reduction by legal means can be defined as the activity of tax payers

who find different ways to lessen or eliminate their tax liability so as to reduce their actual  legal income,  without violating the law.

 

Tax evasion on the other hand is the nonpayment of tax liabilities. This  is the activity of taxpayers, a premeditated infringement of law for the purpose of escaping tax payments that has been introduced legally by the tax authority. This is criminal in nature. Tax evasion is present in Sri Lanka on a large scale by individuals, corporations and trusts and by those in the informal economy of small and medium businesses, trade establishments, tourist trade, professionals, individual income earners, as well as, thousands of suppliers of professional services. The problem is further compounded by the absence of tax files among the majority of citizens in Sri  Lanka.

 

Every citizen in Sri Lanka s should strive to strengthen one’s society. It is their public duty to make tax payment,  as taxes are the major source of income for government and the  government uses this money to provide services to  the general public, in areas, such as, defense and security  services, public utilities, healthcare, education, social welfare, poor relief,  transportation, roads etc.

According to official records less than 2 % of the population  are tax payers out of a total population of 22 million people.  Obviously, there must be several reasons for non-payment of tax. The main issue is not alone tax avoidance but the inability to bring all citizens under a tax umbrella.

(b)Recommendations on ways to increase tax revenue

Issues

  • Every citizen must have a tax file notwithstanding whether they presently pay tax ( single or as a family unit)
  • All companies from limited liability, partnerships, to proprietorships must have a tax file

Target groups

  1. All members of the national Government
  2. All provincial Government elected members
  3. All companies from limited liability to proprietorships
  4. All employed citizens in government sector*  and the private sector
  5. All professional consultants in the fields of medicine and health care, engineering, architecture, accountants, tax advisors, advertising, shipping, medical specialists, lecturers, tuition teachers dance teachers, economists all consultants in every field, among others
  6. All citizens of voting age (18) to 70 years

( * though government sector salaries are tax exempt their private wealth which include lands, houses, rents and other income such as, gifts, dowries, windfall wins need to be taxed.

It does not matter whether they are presently non tax payers but like the national Identity Card they need to have a tax number and as they increase their income will qualify for taxes.

The fact that they have to declare every year on a computerized tax return or by mail makes them answerable in a legal sense as well as in a psychological sense to refrain from  tax  avoidance. If proved contrary, to their non taxable income answer, they will have to face legal strictures.

How can you bring individuals under the tax umbrella?

1.Obtain from the Registrar of Companies   all company registrations and make it obligatory for all new companies registered to obtain a tax file.

  1. Keep tab of all the weddings, receptions, birthday galas at hotels and wedding halls in Colombo and the suburbs to identify the spenders.

3.Keep a tab on the political parties and their spending on processions, meetings, transport  for protests and meetings etc.

  1. Get all hospitals and other medical establishments and private consulting places to report back on consultants’ charges*

(* at present many consultants /specialists/GPs demand cash and give no valid  receipts. Make it obligatory for all specialists, consultants to give a valid receipt that can be filed by the customer as a valid tax off every year)

  1. Repeat the above exercise with all other consultants, such as, engineers, private tax consultants, accountants, architects, surveyors, occult readers, masseurs, tuition establishments,  private education institutes,  economists, lawyers, attorneys,  investment analysts, service agents, ship chandlers etc., among others. *

( make them give valid receipts which can be filed by individuals for percentage exemption* from their individual tax returns. which will necessitate all individuals or corporate entities who pay for services from these professionals to provide receipts. This will create an instant back up check to tax authorities)

  1. Get all other supplier of services, such as funeral parlors, musical bands , tent suppliers , caterers, food suppliers for almsgivings, funerals, birthday parties, weddings and other ‘tamashas’ to give valid receipts which can be produced as  expenses to tax  authorities to qualify for relief on individual incomes

(* Possible future tax exemptions are a possible double edged sword as this will pressurize all service suppliers to give a valid receipt for receiving income and for all those who pay for such service to insist on a receipt as they would get a tax benefit)

  1. All organizers of political meetings, sports festivals, musical extravaganzas, for cost of platforms, tents, music, dancers, and electronic equipment , transport .refreshments etc.  etc.,
  2. Organizers of training programs, management, sports, religious festivals among others

I am certain that this scenario will increase the tax base by circa 500%. Today with computerization creating 20 million tax files is no big deal nor is it a big deal to have software to monitor same. I am not aware how the tax department is organized countrywide but recommend that that tax offices should be established in every district if it is not the case now.

(2)Other policy avenues that will create income/reduce expenditure to the government and/ or save wasteful expenditure

(a)Import Restrictions.

 All these suggestions cannot be done in the 2017 budget but mention  could be made based on a time frame as  plans for the future.

Import restrictions   and import substitution  would be key factors. At present considerable amount of non-essential items are imported  to the country. First the need is there to identify goods into three  categories,  i.e. essential , partly essential and non- essential (the definitions are time bound)

  • ( a survey needs to be done  on all current imports  based on the three factors above)

(b) Repositioning  Industrial and Agricultural Base

(i)Heavy industry  : At present not much of heavy industry remain ( Companies such as Colombo Commercial company,  Walker and Sons, Walker and Grieg, Bonars,  Browns group,  comes to mind)

An example of utter waste in heavy industry area is the vehicle import policy. The administration does not consider the long term repercussions  of bringing in various models of vehicles for which they have to import millions of items  as spare parts.

Solution is in the long term, e.g.,  identifying like  India did, to assemble one make and model of  a small car ( already being done), a medium size car and a larger saloon.  Two long and short wheel base  Vans  Strive  for  joint investment with foreign participation to establish  assembling factories.  Excess over the Sri Lanka market can be exported to other third world countries. Several novel permutations and combinations could make the vehicles look different so as to satisfy customer choice, though the basic structure such as the chassis frame, differential, engine block etc would be the same,

The upshot of such a decision would be that you could over period trim imports of spares  for older cars and the locally assembled cars would function with a much lesser stock  holding of spares ( A project proposal can be submitted)and considerable amount of spares for  the locally assembled vehicles could be manufactured locally. The ripple effect is that feeder industries will be set up by  small firms to supply components over time (such a model can be seen in South Korea with Hyundai and other car manufactures)

Initially a moratorium on new  and old car imports for 10 years to be introduced in the budget to initiate above proposal. Savings will be in millions while income generation among local assemblers and component manufacturers will create income redistribution in the country.

(ii) Light Engineering :

Our country needs  a light engineering base from basic tools and machines to sophisticated  technology. Basic would be for example, carpenter/mason  tools, locks etc., a sophisticated would be for example medical and dental instruments .  A survey and evaluations to be carried out on likely areas

Initial entry would be technology transfer of total industrial units based on relocation from foreign countries together with buy back guarantees of manufactured items, like China has done over the last two decades( see also section on foreign investment ).

  • To be mentioned as a sign post of the future in the budget.

This would eliminate the need to import selected goods and the benefit would be finding new markets  after feeding the local demand. New markets will open  with the establishment of new trade pacts with India ,Singapore, Pakistan, New Zealand and other selected countries

(iii)Intelligence industry

Both electronics and information technology industry is the need of the hour. Initially it would be for example, assembly of  selected  electronic goods such as computers  with  buy back arrangements of supply  over Lankan needs. In case of information technology a whole gamut of possibilities are open. Initially systems to cater to generation Z* Scientific knowledge, technology knowhow  and innovation  need to be the key drivers in the new education system which will cater to the new generation  and bring in  an  educated work force.

The result here would be import substitution of many items that are imported presently and the distinct possibility of exporting  goods to other third world countries and export of software ( presently done in a small scale).

  • It is important for the government to show the way forward in the budget.

Such industrial expansion with core industrial complexes in the South, East, North and West will  create an economic expansion, income redistribution,  employment creation,  export oriented economy, an intelligent work force and political and economic stability in all parts of the country.

(* please refer to Dr Chandra  Embuldeniya “Fourth Industrial Revolution, Sunday  Business Times  September 18th 2016)

(iv)Value added Agriculture

Background:  At present the there is considerable waste in the field of Agriculture both in absence of planned agricultural pursuits, not utilizing examples from other counties . not having a solid comprehensive plan for agriculture, paucity of directed education facilities, and the absence of awareness supported by intensive encouragement by the government . One such case is in paddy farming. Hence the example given below:-

  • Paddy lands: Paddy farming has not changed much over the years. The concept of inheritance and decimation of land into minute blocks is totally uneconomical, leading to waste in land, labor, water ,fertilizer, apart from poor methodology of land use.

A possible way forward is Block farming. Basically amalgamating paddy lands into 100 acre blocks. With a large stakeholder providing the management and administration and having a certain portion of shares in the company for their financial  investment, while every small holder farmer/ owner who subscribes,  pledging their land to the company to be issued  shares on land value. The benefit to the farmer is many fold, (i) holds ownership of land as shareholder of the company (ii) receives share of the  profit(iii)obtains permanent employment in the paddy estate with a daily wage for their r labor.

The overall benefits  will be, (i) intelligent use of mechanized agriculture,(ii)water conservation,(iii) efficient harvesting ( iv) intelligent use and control of  fertilizer and pest control (v) prevention of vermin attack and spoilage  (vi) efficient  storage,(vii)the up gradation of farmer livelihoods(viii)improved scientific agriculture, (ix)  income generating short crops  during the two  off season),      (x) benefit to the farmer through elimination  of lost time due to ill health, paucity of cash  in finding funds for seed paddy, fertilizer, storage, water and farm implements etc., (xi) growing of better varieties for export, among others

  • study to be carried through a pilot project.

Refer also to  existing  studies  available at the Central Bank and other Agriculture Research units  and the Department of Agriculture on wastage in harvesting and transport, vermin/rodent attacks on harvested paddy etc. The perennial loss of cultivable best paddy lands .According to Dr A. Tennekoon’s research ( Central Bank),  around 33% of the best  land  is not cultivated due to the ‘Thatumaru’ system which waste cultivable land on ownership  boundaries (Niyaras)

In addition numerous studies are available on other added value agriculture such as fruits, lentils,  vegetable and flower seeds for export, cut flowers, spices  among others,  Refer especially a study carried out by Arthur D little of USA and the Sri  Lanka Government in 1984.

  • Another related subject to agriculture is import of fertilizer. We are importing triple super phosphate (TSP) when we have phosphate deposits at  Eppawela that will meet our agricultural needs for the next 100 years, Our phosphate deposits  are superior   in quality to that   available in Jordan.
  • we need to establish a joint venture with a foreign firm to convert same into tsp. This will provide our local needs as well as

(3) Small and Medium Business strategy model*

There is no definitive policy and plan for small and medium industry development in the country. a comprehensive policy  has never been designed and  implemented . A policy with legal teeth should be introduced after a evaluation of the following needs areas. They are, Access to:  Physical Infrastructure, Financial services, Technology and Technical services, Raw materials, Business information and advice, Markets  and  a Solid legal base

The following concept presented is applicable  to all would be entrepreneurs in any district in Sri Lanka . It can also be specially directed to displaced youth in the North and the east

Background

Assumptions (applicable to the North and East only)

The target group we are considering at present, probably,

  • Feel alienated from the rest of society
  • Have low self esteem due to the vacuum created on their ideological goals of a separate state, loss of power and authority
  • suffer from loss of loved ones such as parents, relatives, siblings and friends
  • are depressed due to loss of career goals, disruption of education, etc
  • feel the absence of social and cultural cohesion
  • feel left behind in comparison to their peers who did not participate as active members of the LTTE fighting cadres

Options available to uplift the target group to become useful and contributory citizens to society

  • Provide government employment
  • Create avenues for private sector to absorb them
  • Formulate a program/s to create self employment and participate in income generating activities

Where (a) is concerned the process will be slow and no acceleration is possible as it concerns the whole country where there is considerable under employment and un-employment. Therefore job vacancies will occur only when development of the North and East progresses. However we need to conduct career training before they become employable

In the case of option (b) there may perhaps be more acceleration of job prospects for some as the private sector opens up more manufacturing and sales areas in these regions. This again will take considerable time as target group members require basic training before being employed

The most viable option therefore is, (c) as most of the target group have low levels of skills training, low levels of basic education, low exposure into the world of business.

However, the  above deficiencies could be overcome as there are successful programs from Asia and rest of the world in the fields of motivation, awareness creation and exposure to rapid learning methods in skills training and entrepreneurship.

Such programs need to be well integrated with all the stakeholders playing symmetrical roles.     That is the  government sector( GS), the private sector( PS) and  the local and international establishments   (L &I), They in unison need to work together to  create a stable  environment by sharing roles that are necessary to make the ongoing program  a part of a national effort of reintegration, reconstruction and development . This would consist of, for example ,   creating a level playing field ( GS) , access to,  business services( PS)),  information networks(GS,PS, L&I) , industrial and agricultural extension,( GS, PS L&I)  establishment of manufacturing and production demonstration centers, ( GS<PS<L&I) hands on training and instruction centers (GS,PS,L&I), raw material banks (GS,PS) marketing , distribution and sales  outlets( GS,PS, L&I)  and of course funding to undertake these programs

It is necessary to reiterate before we go further that such a program needs

  • Hands on experienced experts who can guide and direct the various inputs.
  • Careful selection of  the different target groups of beneficiaries
  • A pilot program to test the waters
  • A well documented monitoring and evaluation procedure in place.

Items C and D are self explanatory

With regard to (a) there are Sri Lankan experts available with both local and international experience.

In the case of (b) a glance at the following view of target participants may be pertinent so as to select aspirants from the group into specific training programmers.

It must be borne in mind that humans have different capabilities and therefore there need to be programs to cater to different types. A few examples are given here for clarification of types of humans and suitable programs

Types of Humans (categorization done based on my own observations and therefore not exclusive)

  1. Safety seekers are those that obtain a skill and sell this skill practically for 8 hours a day or more to some establishment either in the government or the private sector.

For them the program needs to offer skills trainings in specific fields such as administration, clerical and technical fields etc. For this group Entrepreneur development could be offered in the future

  1. Risk Takers are those who identify a prospective business and establish an income generating activity like small manufacturing unit, or an agriculture processing unit, trading, distribution or other service, employs others and manages the venture. These belong to our target group and entrepreneur development should be a must for this group.
  2. Lone rangers are those who acquire a skill or knowledge .Do not like to work for others and ply his/her trade e.gs. are masons, welders, electricians, plumbers ,surveyors, architects, musicians medical practitioners, lawyers etc. They too fall into our target group as they could move into a business venture at a later date. Entrepreneur development after skills training is a must

4, Survival artistes are those who are less educated and less endowed in skills and knowledge and find no choice other than to employ themselves in some micro business to survive.egs are street vendors, street entertainers, and micro food processors. They too fall into our target group and entrepreneur training is a must and will make them ply their micro businesses more efficiently.

  1. Family Inheritors are those whose parents are engaged in a trade, business or service and are already tuned into the world of business and will either join their parents or branch out to a new business or do neither. They too fall into our target group and will benefit from entrepreneur training.

FACETS OF ENTREPRENEURSHIP

Entrepreneur training programs create, awareness among the aspirants about themselves, the external world they operate their business, their internal strengths through self analysis, enthusiasm build up, task orientation, knowledge building and self motivation.

It is pertinent to note at the beginning that Entrepreneurship is not a fallback position when no other job prospects are available but it is a career by itself, second to none

The reason why there is a high failure rate is due to the false assumption of development personal  who assumed that if a person is trained for 15 to 20 days in all aspects of management, production, finance and marketing and selling that they will venture into successful enterprise. This is far from the truth and is a menu for disaster .

The training really provides a sense of direction and creates awareness provides guidelines on every aspect of business. The real test comes when they try to commence their business and thereafter.  Therefore the critical factor for success is to sustain their initial enthusiasm through a process of continuous support services, this is called industrial and agricultural and service extension.

These support services comprise of

(a) Access to physical infrastructure: such as, access to land, buildings, warehousing, roads, sales outlets, utilities etc through the form of industrial estates, business hives, business cocoons etc.

(b) Access to financial services: such as advice, financial feasibility studies, cash flow management, tax benefits, bridging loans, leasing finance, hire purchase finance, short and long term loans etc

© Access to technology and technical services: such as, processing techniques, environment friendly production, appropriate machinery, production processors, quality manufacture, design, shape and color, etc

(d) Access to raw materials, such as raw material banks, special imports, reservations, bulk buying etc.,

(e)   Access to business information and advice: such as, information on markets, pricing, raw materials, design, packaging, quality, government rules and regulations, business laws, taxes etc

(f) Access to Markets: such as, schemes of twining big business with micro and small business, foster parenting, easy entry into government supply, entry to government tenders, subcontracting exchanges etc

(g) Access to Training: such as, financial management, production management, sales, quality control, packaging ,product design, market research , reverse engineering, stores management, among others

(h) Access to a solid Legal base: such as, special law  that define Micro,  Small, Medium and Large companies, laws on tender break up so that small firms can compete, laws on special purchase of small business products by the Government, Laws on location ,special tax benefits, pay back periods on loans, special interest rates among others

Selection of trainees

They are tested selection methodologies based on ones’ orientation and entrepreneur ability

Some examples of selection parameters:   select groups from similar backgrounds, knowledge levels, age groups, educational levels, skill levels. These are done through one to one and group interviews, observation and visit to family backgrounds and environment, intelligent and skills tests etc.

Examples of group orientations for selection are,

  • Graduates, technical diploma holders, agricultural diploma holders, those with business experience and specific skills experience
  • Family backgrounds like farming, trading, technical, Industrial etc
  • Skilled, e.gs. are electricians, welders, plumbers, carpenters, hair dresses, dental mechanics, animal husbandry, apiary, among others
  • Service orientation such as repairers of bicycles, tractors, motor cycles, cars and vans, wedding entertainers, funeral organizers, electric and electronic item repairers, music suppliers, among others
  • Food processors such as pastry makers, bread /bakery trade, sweet meats, beverages, fast food suppliers, among others

Training models

There are many training models to choose from. Most of them have been pilot tested in Sri Lanka and abroad.  Whatever the model, a key factor to look for is that the training is done using andragogical or adult teaching methods which comprise of, role play, interactive group work, simulation methods, competitive groups, case study etc which simulate real life situations.

The process of training itself is well documented. It begins with expectation indexes, leveling, brain storms, micro and macro screening, interactive games on  market research, production, financial management ,costing ,raw material sourcing, reverse engineering, packaging, negotiating, setting prices, market research, marketing , advertising, development of  project  profiles  and presentation of business plans to a final panel, using the techniques learned through this sequential training program and requesting the financial intermediary  for seed capital based on this business plan.

Post training support.

Already discussed above such as government policy support in the form of incentives, simplified legal and regulatory frameworks, and others mentioned above

The Future

Provided a decision is made that what is described is a probable path to follow, a project proposal will have to be developed for Government, private sector and donor funding

Funding could be sourced from

  • International donors who have funded such programs around the world are

The world bank, USAID (USA) GTZ,  (Germany) , British aid (UK) ,SIDA  ( Sweden) DANIDA ,(Denmark) NORAD  (Norway)  Dutch Aid, CIDA,IDRC {Canada)and many foundations, among others

  • At National level

Government rehabilitation and development funds, Commercial and development banks who deals with small business and micro finance

Large private sector corporations

Chambers and Associations

Foundations and trusts

Individual benefactors

Sample Project proposal

The Objective:

 Creating income generation and employment opportunities for youth, unemployed and under employed, retirees form employment  and returnees from the middle east,  displaced people around the country rehabilitated EX LTTE cadres

Activities to achieve objective

  1. selection of training groups in batches of 25
  2. Training programs for specific target groups
  • Setting up extension services
  1. Setting up business hives and cocoons
  2. Establishing demonstration centers
  3. Developing a data bank of expert cadres for mentoring in specific fields.
  • Establishing a central information centre with a nodal network around the country
  • Establishing financial intermediaries
  1. Establishing raw material and tool banks
  2. Creating distribution networks, sales and marketing centers
  3. Setting up a monitoring and evaluation process

Costs

To be calculated based on detail needs for activities including manpower needs

Manpower requirements

To be calculated depending on the sequence of activities

Time frames

To be decided upon

Outputs:

Creation of new business units, self employed people, group production and processing, creation of wealth in the countryside and redistribution of income.

OUTCOMES

Ripple effect of new income generation in depressed areas resulting in

  • Better housing and living conditions in the villages.
  • Growing of market demand for other goods.
  • Lesser burden on government funds and facilities and administration.
  • Better living conditions for entrepreneur families.
  • Successful demonstration by the Government on handling of IDPs and rehabilitation.
  • Preventione., weaning away displaced youth from drug and alcoholic abuse and petty thievery.
  • Reduction in migration to cities for work and fringe living (slums).
  • Elimination of frustration of youth and preventing them going back to militant ways
  • Creation of micro capitalists (successful entrepreneurs) who will not join reactionary or revolutionary politics nor undertake protests or create destabilization
  • Increase in goods and services to the general economy.
  • Increase in income generation and redistribution of income in depressed and less developed areas
  • Increased in market demand and purchasing power for goods and services produced by others in the country.
  • Better index of loan recovery by the banks and other financial intermediaries
  • Less burden for the government in food aid, health facilities, samurdhi, etc
  • More income for the government by reduction of handouts and new taxes  if any,  and the saved funds to be used in other needy areas.

Monitoring and evaluation

Objectively verifiable indicators to be established with time sequences for verification and control

————————————————————————————————————————–

,    *The writer as Chief Advisor with a team of multi skilled South African specialists developed the model for Small and Medium Industry development   for South Africa under The Mandela Government.   The findings were given a legal base through Parliament, institutionalized and activated on the ground. It became a model to be followed in other African countries  as well as some other countries in Asia. The report, findings and activities are available with the author

(4) Social Welfare

(i)Free Education See   under assisted education (Page 9 )

(ii)Free  Health see under  Health care initiatives( Page 9)

(iii)Samurdhi.

This program as presently run  needs improvement. The selection of the beneficiaries by Samurdhi officers (both men and women) nominated from the area alone is bound to cause favoritism. The need is to devise a system where the real needy benefits. Perhaps appointing religious leaders in the districts to select the beneficiaries may reduce corruption.

  • It is also important that the beneficiaries provide some benefit / return,  to the society and government.  For example,   a number of hours of their  labor to be given to the government in the areas where they live, such as, helping at schools, hospices ,environment cleaning,  helping at crèches and child care centers, among others

(iv) Free transport  see under infrastructure initiatives( Page 16)

 

(5) Health Care  Policy

(a)  Healthcare vs. Assisted health care

Comparative costs:  Today a pound of bread is Rs.54, a cigaretteRs.35,Malupaan’ is Rs.40, yoghurt Rs.30 ice-cream tub Rs.40,  apple is Rs.50, orange is Rs. 45, a packet of rice from  Rs.100 to  Rs.150.(all consumed by lower and middle income earners)

  • So is it preposterous? if  a proposal is made that in every  government hospital  outpatients pay for example  a minimum fee of RS 50.for consultations , Rs 100 to 300 for  usage of any machine such as an x-ray , ECG ultra sound scan , CT scan MRI scan etc. Rs 25 for any intravenous  injection and  Rs 25 for medicines etc ..

With such a payments structure,   the health budget  to the State  will be reduced considerably . The  practice of making patients pay for  medication in Government Hospitals    is already  in existent, though informally done at present,  where patients are requested  to bring injection syringes, antiseptic creams and lotions  etc from outside pharmacies.

(b) Private medical schools to be endorsed as long as all regulations are met. This will ease government spending on medical education and additional spending on free medical education

(6)Education  Policy

(a)Free Education vs. Assisted Education.

Free education has been in existent over  the last 70 years. Let us take a serious view on this issue.  University education( degree)  in humanities costs on average around  Rs.400,000 and medicine over Rs. 600,000.

One initiative is to provide free education up to A level. All university entrants to qualify for assisted education where a graduate in any discipline is  made to pay 50% of the cost of education over a 15 year period. Payment only to commence  once they are gainfully  employed. This is practiced in most countries. Payment to be staggered over a 15 year period.  Another option  Initially is that  the first 25% of students who scores highest will have bursaries to cover 50% of the cost.

Part of the savings will be for university upkeep, upgrades  and as higher salaries to university professors and Lecturers.

(b) A concept to change the whole educational infrastructure

Background: The total educational structure needs to be reviewed. The school and university locations have been over the years established on an ad hoc basis. It is time now to develop a national comprehensive plan to reorganize and upgrade the system, based on population( student) patterns. For example,  when Singapore  re planned the  system in 1991,   they carried out a comprehensive survey on systems elsewhere  in 12 leading countries .

Proposal

  • Identify 9 universities to be termed Provincial Universities, Students from the Province who qualify for university education to get placement in the Provincial This eliminates the present frustration of displacement from their families, home environment , additional payments for food and lodging  and psychological issues of being away from family and the safe environment etc.
  • The facilities to be upgraded in all 9 Universities , with specialized subject areas and skilled and experienced professors and Lectures and top specialists with experience from the private and public sector to be invited as visiting lecturers
  • identify 9 Technical Colleges/Schools as well for the 9 Provinces

Students who do not obtain the grades to qualify for university  education or  prefer a technical      education option could apply to these colleges.  They too can study in their home environment.

  • the technical colleges to have state of the art facilities that prepare the students for the future technology world .
  • Establish 9 Gymnasiums (German model) where 120 job areas are catered to, with both practicum and theory. This system is the best in the world. The selection to be  based on aptitude tests. Students who prefer to train and qualify in a specific skilled craft can study to be Master (Meister) in the specific trade . One hundred and twenty  options are available in varied fields  such  as carpentry, masonry, welding, electrical, electronics, animal husbandry, hairdressing, weaving, bookkeeping, draugtmanship

,apothecary, computers,  among others

  • Select/elevate nine top Central Schools  as nine model schools for the nine provinces. The 9 schools to be equivalent to the Colombo Royal school model with additional emphasis on Science and technology curriculum. Staff them with first grade teachers who will be paid additional allowances for housing and travel, relocation expenses etc being  an incentive for them to relocate themselves .install State of the art Science and Technology laboratories, and other necessary learning tools, computers etc

Students who excel from other schools grade 5 exam  in the provinces to be given placement in the Provincial “Royal Colleges” ( to be named after benefactor*)

How do you find the Finances

(i) Billionaires, Millionaires, Philanthropists, Family Foundations, like their names to be written in perpetuity. Develop an enticement program where a contribution of over a specific figure will permit  them to endow , their family  name to the institute they financially sponsor, such as,  the nine Provincial Technical colleges and the  top nine Provincial schools apart from a family member being elected to the Board of the school.

Possible /Probable candidates to source funds(.Names taken from the Sri Lanka Millionaire List)

Messes : Dammika Perera, Sohli and Rusi Captain ,Harry Jayewardene, Ashok Pathirage, M Wegapitiya,  Ali Yaseen, HiranCooray, Abbas Akberally, Manik Pereira, H KDharmadasa, Osman Kassim, A R Pandithge,  Ken Balendra , P wickremasinghe, Ishara Silva, J C and M M Page, SenaYaddehige, RM Nanayakkara, G C Wickremasinghe, Ajith Devasundera, SumalPerera Amaleen Brothers, among another 50 or so likely benefactors

(ii)obtain  German aid( GTZ) for the Gymnasiums

(iii) obtain aid from Denmark( DANIDA)  Canada (CIDA), Sweden (SIDA) Norway (NORAD), Finland (FINNIDA) for the 9 technical colleges again they can have their country name  as the name of the technical college  as they all  support technical education

(iv) obtain aid from UK (British aid), USA (USAID)  for the  Nine Provincial schools up gradation system and the English learning initiative

(v) There are over 1000 foundations in the USA and Europe  who have in their Mission and goals  to upgrade social and  educational welfare  in developing countries. A concerted effort to be made to tap such avenues.

(vi) There are other foundations and philanthropists in Europe, Japan ( Sasakawa foundation comes to mind) where aid and grants can be tapped if a concerted team effort from a task force is set in place.

(c)Concept to bring English as a language  of  education countrywide

Background : India at the time of independence kept English as the medium of education initially for a period of 15 years with the proviso Hindi to be introduced as the language of learning. However 60 years and over since independence, English still reigns as the language of learning in India.  South Africa has 11 ethnic languages but kept English as the language of learning . The Sinhala only policy left most of the Sinhalese population in the countryside bereft of  an English education while their town cousins in the middle and upper middle class got the opportunity to learn English. Thus the same class structure of good English speaking, broken English speaking and non English speaking  remains to date.  Sri Lanka needs to strategize on what should be the best alternative as a medium of learning in educational institutes

The points to ponder are

  • The population of Sri Lanka is around 22 million. Most text books, journals reference articles in every field are in English. Today internet access to web sites of learning, such as, sites in humanities, science, technology, engineering, arts, music, literature, architecture and social sciences are available in the English medium. So is access to libraries, knowledge sites on politics, country information, economic and trade data news , specific skills etc

If this is the case why go against the grain and become backward in knowledge access.

  • English can be brought back as the main language of learning, ( not in 24 hours but over a period of ten years) while Sinhalese and Tamil remain as National languages. People may question why a ten year period?  The reason is if a child born 5 years ago commences  learning English in the first school year, in ten years time ( around the average time they sit for the GCE o level) he/she will be fluent in English
  • What about their mother tongues?

Sinhalese and Tamil are already classed as National languages they should continue to remain so and students still could study subjects such as history, civics, religion in either Sinhalese or Tamil if they wish to do so.

However for the future of our country’s youth, living in a global village the subjects mainly in the technical and engineering areas, medicine, science etc should be in English.

  • It has also been proved in many small countries (e.g. Sweden) that young children are taught 3 languages. Their own language (mother tongue) and two others. This could be conveniently introduced here with Sinhala and Tamil and English as the 3 preferred languages.
  • This will make all future Sri Lankans access to each other, bonding at a very early age like we did in the fifties where a class room consisted of Sinhalese, Tamils, Moors, Malays, Burghers, Eurasians’ , Chinese and others, all learning in harmony and bonding for life.
  • Thus in a period of ten years every youth under the age of 15 will have access to English which will open out the whole world to them.
  • How do we achieve same?

(i)We begin with a survey of needs to achieve this goal. First the teachers, then the facilities countrywide, finances required and time span for completion ,

(ii)Once a plan has been drawn, we will be able access aid in terms of teachers from the executive service corps of UK, USA, American field services, retired executives and civil servants, expatriate retirees, social service organizations, other likeminded English speaking citizens

  • prepare a basic step by step curriculum.
  • Establish language labs in every district,
  • Organize TV and Radio programs and distance learning programs
  • Create a English learning culture in the country
  • Dispense with “cockeyed” schemes of learning” Singlish” English, which will automatically create a second class of English speakers, as compared to more middle class children learning in the correct way to speak, write and read English.

( 7)Management of the Public Sector

(i) All State Corporations.

No business anywhere in the world continues year after year on government grants except in very special cases  a few  strategic industries  .

  • Background

It is important to delve back to recent history why the corporations were established.

In 1946 on the eve of the dissolution of the state council the executive committee presented a review of industrial policy.

This report laid down some practical lines of policy for the future, It outlined the framework for an industrial policy to deal with the post war situation Industries  were demarcated as  Basic industrial sector under state ownership and a non basic industrial sector under private ownership. Basic industries were to be those of strategic importance for development requiring large capital outlay such as iron and steel, cement ,power, heavy  chemicals ,textiles and pharmaceuticals. Their final proposal was that the factories established by the government should be formed into corporations with both government and private capital.

In 1952 a commission was appointed to examine the usefulness of a number of commercial undertakings run exclusively with state funds. This report recommended that state undertakings especially in the field of industry, if they were to be commercially viable should be transferred to corporate bodies, joint stock companies or to cooperative establishments ( Gunesekera-De Zoysa report Sessional paper XIX of 1953).

After  63years we are at the same juncture, i.e,  looking for options on State Sector Corporations i.e., what to do with the loss making Corporations ?We have to, in providing solutions to wastage of government funds, take due cognizance that Corporations have become a Political issue. Since they became fiefdoms of individual ministers as fund raisers for political campaigns, employment exchanges for their relatives and friends and job banks for their supporters.

Option one  is to convert them into joint stock companies. Government sector assets converted to shares and private sector participation with shareholder funding through the stock exchange .The current  employees being given stock options so that malingering of employees is eliminated.( (no government assets are privatized.)

The CEO to be a professional with management, planning, administrative, financial and human resource  skills. To be contractual on a 3 year basis with automatic three year extensions based on performance. No more  appointments by the Minister but by a professional  Recruiting Board specially appointed .Age to be between 45 to 60 years( This age factor will eliminate old retired people put to pasture as Corporation heads  to while away their sunshine years doing very little).

All future  staff to be recruited on their experience, qualifications. The present staff to be evaluated on job specifications and those who are unsuitable to be either retained ,given golden handshakes, or put into a excess pool and found alternative employment for example , in their home districts with the introduction of industrial complexes and zones

 

The Board  of Directors to comprise of professionals . depending on the corporate mission of the Corporation. Eminent persons such as, retired corporate specialists , accountants ,economists  business leaders, architects, engineers educators, HR specialists. medical professionals,  and Senior  government officials from the Treasury, Central Bank, Commercial banks, and the Administrative service

  • The budget to signpost that initially a professional team will evaluate each cooperation, do a comprehensive management and strategic plan with emphasis  on its viability. Thereafter activate option one above

Option two would be  that all assets and shares belong to the government but the Corporation is managed by professional staff as in option  one.

Option three would be to convert them into Cooperative establishments similar to those in Scandinavian countries

  • Option one is the preferred way to go . Prior to a  decision being made it is important to class all cooperation under headings such  as strategic, public utility, custodial, welfare, commercial etc

Option four to be those that are a burden and cannot be remodeled  to either be divested or liquidated

Example:  (i)Airline industry

Mihin Air to be liquidated. It was a loss making fiasco from the beginning and as the proverbial” dead turkey hanging onto the high flying  Eagle”( Srllankan”) bringing it further down.

  • A study to be carried out prior to liquidation, on displacement of staff, assets and obligations of Mihin Air.

Sri Lankan thereafter to be restructured and offered as a joint venture to likely investors( presently being considered).

(8)  Infrastructure Development.

(a)  Toll Roads, Parking high-rises and new traffic systems and possible  revenue earning proposals

Background :Almost all the vehicle owners have spent anything from a million rupees to 40 million  in purchasing vehicles. Additionally they spend on  , car detailing, accessories etc.  The government is struggling and spending billions in skyways ,access roads etc . The point is if the import of vehicles continue these road also will be clogged. It is like the ” tail chasing the head”. The issue here is  wastage of fuel, loss of professional man-hours due to blocked traffic, pollution, road rage and stress and road accident all of which  cost money and  considerable waste of resources

Solutions

  • (i) Toll gates .The budgetary planning in the transport area could begin with introducing Toll gates on all major roads. The Toll Gates to be administered by the RDA, private sector organizations such as Chambers of Commerce or private sector companies  . The collector will be responsible  for maintenance and upkeep .For example 75 % of the toll could be used for road maintenance, while the balance  25% would include administrative costs, salaries for toll keepers and profit to the organization managing the toll.
  • (ii) Slot parking .Sri Lanka was the first country to introduce parking meters in Asia around 1960s and now we have none.. The issue is free parking on all roads thereby avoiding fees, blocking roads obstructing pedestrians .The  previous Singapore model of punched cards to be introduced for  parking in all the cities and towns. It will bring order, more will find parking as parking will be on a time basis. Employment will be created for parking attendants ( at present numerous self appointed parking attendants with bogus yellow jackets and printed tickets with the municipal logo on the tickets are raking in money.)

 

  • (iii) High rise car parks There is also an urgent need to build high rise car parks in Colombo such as, in Fort, Pettah, Borella, Bambalpitiya,  and also in every major City/ town in the country ( Kandy already boasts of one)..All cars to be parked in these parks  apart from limited street parking to be charged by the hour. With fees generated as parking fees, recovery of  the capital spent on car parks will be guaranteed.
  • (iv) Gantry gates to record and monitor and charge all vehicles entering the city between 7am in the morning to7pm
  • (v) Peak hour traffic a law to be enacted that every car that enters the city during peak hours should contain at least 4 passengers, otherwise a penalty to be paid. This will create pooling of car owners on a weekly basis . Another alternative is to charge every vehicle entering the city  at peak hours  an additional Rs. 100 or more
  • (vi) Speed cameras to be introduced on every highway and if 12 infringements are made in an year the license to be suspended for a year
  • (vii)Road works all road work to be done from 8 pm in the evening under lights( this refers to digging, painting, tree lopping, road signs and light repairs, painting of lines and crossings, surfacing among others). There will be considerable saving in blocked traffic and cooler for road units to work at night. the only extra cost would be lighting
  • (viii) New congestion law to lessen traffic  congestion , save time and fuel.   All container vehicles , goods lorries, construction material equipment carriers, cement, logs ,sand and mettle carriers  and many more heavy transport to be assigned special hours ,i.e.  only to take place in cities  towns between the hours of 8  pm to 5AM(9 hours )

(b) Relocation of Bus Terminals

Background: At present busses in cities at all hours careening on the roads create considerable chaos and hazards to commuters, pedestrians and other forms of transport.

The issues are(i) that the busses are too big for city roads and lock other vehicles  (ii) race with each other ( being from different companies) to pick passengers.(iii)  stop at their will to pick and drop passengers(iv) do not follow any road rules (v) delay other road users’, (vi)  cause many accidents (vii) and have become a menace to all despite them doing a yeoman service to all bus commuters

Solution:

Plan long term to relocate  all bus terminals in the centre of the city to the outskirts of every major’ in- road’ to the city and relocate them at places like Kelaniya .wattala,  Homagama, kotte  Ratmalana etc ( at all major inroads),  All passengers travelling/coming from outstations to disembark and board specially established    Town Bus shuttle Service plying to  all sectors of the city. This shuttle bus company to be run by the CTB. All shuttle buses to be mini Buses(  J 11) They will be All standee buses with only seating for pregnant mothers, mothers with infants, differently-able  people, feeble senior citizens and clergy.

Such a relocation will  eliminate all irregularities mentioned above.

  • How to raise Capital, The land thus vacated to be sold at commercial rates to fund this transformation e.g. .these monies be utilized for the bus terminals in the periphery and for setting up the shuttle mini bus service
  • The outputs The above proposals will have a ripple effect of earning large sums of money to the government, Municipalities and local councils, create more orderly traffic systems while at the same time savings in fuel and man-hours among others

(c)  Triple/Dual carriageways Vs. Super Highways

  • Background: A cost comparison needs to be done between these two alternatives. The question needs to be asked whether dual carriage ways will perform the same function as super highways.

The Government is planning a number of super highways similar to the Southern highway.

 Is it necessary? Could an alternative suffice?

Consider options of a  triple lane highway (either side) or dual lane highway (either side). There is also another option where a double lane either way  expands into  triple lane every 10 kilometers  ( the extra lane only extends 1 to 2 km in distance for overtaking purposes)) ( examples found in South Africa and Malaysia))

I firmly believe that the cost of such a venture will be far less to that of a super highway. This proposed triple lane highways could partly use existing stretches of highway as well with ring roads to avoid towns .The triple /dual lane highway including  a centre grass verge  of around 3meters width, where trees will be planted. Each stretch of road to be say 30 kilometers and Toll to be charged. Restriction placed on shops, homesteads on either side.

  • This proposal will accelerate the road system as it is less time consuming to build and will save enormous amounts of money to the exchequer.

 (d) Economic and Social Facility Centers(ESFC)

Background: All  Humans(Homo Sapiens) have a herd instinct and mentality. Hence  they prefer to live in communities that support their core wants in the area of Basic. Secondary ,Social and Physiological needs. The Basic would be Food ,clothing and shelter. Secondary would be sense of security, peace of mind, and a good environment with schools, religious, and recreation facilities  for their family. Social needs would be  camaraderie, good communication, understanding, and belonging .Physiological needs would be  Recognition, appreciation, love and respect.

The reason why ? Many government executives in the specific fields such as legal, police, medical, administrative officers ,teachers among others    are reluctant to work outside the main cities due to the non fulfillment of the above needs. For e.g. housing is poor ,live in single rooms or tenements, absence of  social intercourse, poor hygiene and utilities, and infrastructure. Absence of proper educational and recreational facilities for their children among others. Hence many  of them maintain two residences, one in the city so as to educate their children. and the other a room near  the work place in the countryside.

The outcome  is that most travel down to the city on Fridays and return Sunday night which takes away two working days (Friday and Monday) Hence work efficiency  is reduced to three days of the week. This creates  stress and frustration in their lives.

The Solution: There is scant attention paid so far for  planned growth of ESFCs. This would comprise of,  processing factories( for adding value to agricultural products) Government administrative complex, housing for management and staff(  both in the government and privatesector),recreationafacilities(clubhouse,gym,bastetball,volleyball swimming) , primary and secondary schools, daycare centre ,health centre , post office and police post etc. These to be located  close to a major city or town in each district ( perhaps excluding western province)

The advantage of the ESFC scheme is multifaceted

(a) Farm produce can be converted into added value products . For e.g.  Aseptic packaging centre in the complex can extract  juices and hygienically pack same  from fruits such as mangoes ,passion fruit,  tomatoes ,wood apple, pineapple, oranges, among others which would bring an immediate income to the farmer devoid of fruit spoilage, middleman, low prices etc.

(b) Drying processor in the complex  would enable farmers and growers to get their fruits dried  models of such facilities are available in countries like  Thailand,  and Philippines  This adds value to dried fruits, such as, papaya ,guava ,banana .tamarind, mangoes ,pineapple among others

(c) the combinations  of added value benefits are many, such as, jams and cordials manufacture, milling different types of grains, processing by products from animal husbandry, among many others. The facility would sell processing time to farmers to process their goods(products)

(d) Due to availability of pleasant livable facilities as described above management and staff will not hesitate  to be transferred to these locations nor will they need to keep two places of residences.

(e) In each Province, an  ESFC coupled with a Top University, Technical College, Gymnasium career training and a Top School ( as mentioned under Education Policy) will  create an enabling environment  for both administrative staff as well as the farmers and producers in each district.

 

(9) Policy improvements in the area of trade and Investments

(i) Relocation of manufacturing units from foreign countries to Sri Lanka

Background:

Planners have been over the years have been trying hard to attract direct foreign investment (DFI)but has not been very successful. What many planners do not realize is that over 150 countries in the world are simultaneously competing with us to attract FDI s. There are certain ground rules that likely investors look for in moving their capital to a third country. Normally this is depicted in a format called the’ competitive diamonds’. What is fed into the model are, data such as, stable environment,  economic stability, political stability, absence of internal wars, legal protection of investment , ease of doing business, international banks, friendly  investment climate, existing foreign investments, forward and backward linkages in industry, non-political labor unions, among others,.

 

On the social side, they look for good housing, good restaurants, good healthcare and hospitals, good schools, among others. After the ethnic war ended the position of Sri Lanka has improved but still there is a long way to go. Investors look at the safety of their investment in the long term because any investment to reach their payback  period take a couple of years .

 

  • AN Alternative to FDI While attempts are made to improve on the competitive diamonds. One can consider  other alternatives where unlike FDI the risk to the investor is minimal. This is the concept  of Transfer of Technology and Knowhow  lock stock and barrel. Many countries look for relocation of manufacturing units to third countries due to higher costs, shortage of labor etc. The best example of success in this sphere is China and few other third world countries  where American and European firms relocated manufacturing processes which meant they transferred their technology and knowhow as well.

The risk was minimal to the  foreign investor, in terms of capital and the product according to their standards much cheaper to be produced in China or elsewhere. There was no risk as capital invested  in the third country was minimal by the US or European  relocation company.  For example , The Chinese entrepreneurs   raised finances through  local banks  based on the 10 to 15 year buy back guarantees of the finished  product  given by the US and European manufacturers.

 

(10) Food security and enriched environment

Background: Sri lanka is blessed with an ideal climate all year round in comparison to many arid and cold countries.  However no formal attempt has been planned by the government to maximize this advantage.

The concept has been carried out informally and on special occasions like the world Tree planting day

The concept as a Government Policy initiative. to inculcate  appreciation of the environment, soil conservation, attracting rain, improving air quality, recreation, food security, commercial timber, community harmony,  among others

 

We have over 4000 kilometers of type A and Type B roads A directive to be given to every provincial government to organize tree planting on either side of the road at 10 meter intervals and at least 1 to 2 meters away from the edge of the road  for road widening etc  .It would amount to 800.000 trees. The trees to be chosen based on the premise that they provide a future benefit , e.g Food –  such as ,Jack, Breadfruit, Coconut, Palmyra.  Tamarind, Mango.  Hardwoods-   such as, Mahogany, Teak, Kumbuk. Ebony etc., Fuel and timber woods-  such as, cypress, eucalyptus.  Soft woods-  such as, loonumidella, albizia  for wood boxes and ceilings and  Medicinal – such  as ,Aralu Bulu  Nelly, Khohomba ( neem)etc  for  preparation of  auyrvedha medicines.

  • The process

All schools in the country to be geared to first  open plant nurseries ( albeit with the help of government agencies) for chosen plants. Every child be given a  tree to plant and nurture during its growing years .Each school to be given 10 kilometers of road on either side of their school to be responsible. Outside this limit (the extra mileage of roads)  to be taken up by, members of Temples ,Churches, Kovils, Mosques, and other civil  society organizations which  are to be requested to come forward

  • The cost will be minimal as plants will be donations maintenance by interested communities

 

  • The Impact would be
  1. Improve food security as the plants that bear fruits will be available to the needy community
  2. All hard woods and soft woods have a value to the community as timber ,
  3. All medicinal trees will help the input to ayurveda drugs
  4. Fuel wood help to fire generators
  5. Common course will improve ethnic harmony
  6. Beautify the environment and the eco system
  7. Encourage fauna and flora, a target of the Smithsonian foundation for improvement of the environment
  8. Pride and involvement of the citizens in nurturing the environment
  9. Create wind belts and contribute to attracting rain

 

The same concept could be extended around every  water reservoir (Tanks,) irrigation channels, rivers,   among others.

 

(11) Housing options

NOT SO temporary HOUSING FOR THE homeless, depilated villages and displaced people

 

Background: In Sri Lanka and elsewhere housing to the poor and displaced has become a critical and perennial issue. This is especially true in the Sri Lankan situation due to natural disasters such as the Tsunami, the floods, landslides and perennial poverty and displaced people after the ethnic war.  .

For example the efforts to provide houses after the Tsunami ran into many problems, such as cost escalations, houses built which were unfit for human habitation, financial scandals, etc.

The concept presented here is a permanent solution that is not only at a lesser cost but could be implemented  speedily (almost immediately) and even building a million houses in a year will not be impossible

It is proposed this concept be tested by building one model village so that time efficiencies, cost benefits, time targets could be evaluated

It is scandalous to allow foreign firms to build low cost houses when we have a well established construction industry. The disadvantages are, that large sums of money will leave the country. Based on the economic maxim of ‘circulation of money’ , the local contractors will spend the monies in this country thereby creating a wave of  spreading  wealth within the country.

For example , in South Africa and some Latin American countries large tenders say 1000 units of  low cost houses  were  broken up  into 100 house units so that 10 local firms could be contracted based on a tender system. While the Government can provide the specification based on a model house

The Concept

If one is to ask the question how many American citizens live in temporary housing or trailer homes? The probable answer is anything between 10 to 15%. If you therefore examine a trailer home it is not much different to a converted 40 foot container converted into a home by opening out windows and doors cut and framed with extruded aluminum doors and windows

 

Container to a House

The concept given below is to utilize 40ft containers (used and to be discarded) converted into homes to overcome delays in construction and to reduce costs in building regular homes of bricks and mortar. Further while the proposed container home is 880sq ft in extent a regular home is around 500 sq ft.

A 40 ft container has dimensions of 40 ft (l)) x 8ft (b) x 10 ft (h). The floor area is 320 sqft (40 x 8)

Add a slanting roof with an overhang of 8ft on either side with coconut or Palmyra rafters This gives an additional sq footage of ( 560sq fat ( 7 x40 x 2) Therefore the total  floor area increases to 880 sq ft.

The roof is to be thatched with woven coconut or Palmyra fronds. To prevent them from decomposing early the thatch is treated, first by immersing in a bath of wood preservative and thereafter dried and sprayed with a varnish. This will give a life span of over 15 to 20 years

House Facilities

  1. The front space, an area of (40 x 7 x 280sqft)  can be separated into two sections each of (18 x 7 = 126 sqft )  with a centre aisle of 4ft  4 x7 = 28 sqft . One section to be used as a sitting area and the other part a dining area. A total area of 280 sqft
  2. The core container area to be converted into two bed rooms of dimensions of 18 x 8ft =144 sqft) with a centre aisle of 4ft (4 x8 =32sq ft) making a total area of 320 sqft
  • The rear space which is of dimension ( 40 x 7 = 280 sqft ) is to be divided as follows: (a) toilet of dimension 7 x4 = 28 sqft, (b) a kitchen and eating area  of (10 x7 = 70 sqft, (c) a bath/shower room of 7 x4 = 28sq ft, (d)   a store room of 8 x7 = 56 sqft(g) additional bed room of 10 x7 = 70 sqft, (h) a back corridor space of 28 sqft(4 x7) making a total area of 280 sq ft.

The total physical area inclusive of roof awnings amount a total of 1008 sqft of which the house dimensions are 880 sq ft. Ideally the total plot could be 2000 to 4000 sq ft with the area around the house for vegetable and poultry/beehive and other income generation pursuits

The village

A village could be for example anything between 15 to 40 houses ( or any combination)

For example a village of 20 houses could be arranged with a street in the centre with 10 houses on each side of the street. This cuts cost as it facilitates water pipelines, waste water and rain water collection and effluent disposal in specific central tanks/pits.

Village communal facilities

  • One 40 ft house will be made into a Crèche/nursery with milk feeding centre, preschool and day care center
  • Another 40 ft house will be an infirmary( hospice) with a permanent nurse, midwife and a weekly visit by a doctor
  • Another 40 ft house will be a library cum reading room and cultural centre
  • Another(40ft) house will be a Government administration center with a” gramasevaka”, Sanitary inspector,  police post and sub post office or any other administration facility
  • Another (40 ft) house will be common facilities centre to be used on social occasions such as weddings and other festivals as well as a recreation centre with board games, with a TV where educational films and social films can be viewed etc.

Village shops

  • One 20 ft house will be a dry goods, condiments and food stores
  • Another( 20ft) house  will be café and eating house
  • Another( 20ft) house will be vegetables and fruits shops etc
  • Another (20ft) house will be clothes and seamstress/tailor shop
  • Another ( 20ft) house will be stationary/ school books  ,
  • Another (20ft) house will be fish, poultry and meats
  • Another (20ft) house will be a haberdashery cum miscellaneous goods

 

There could be any number of    20 ft. combinations of goods stores

Village services and facilities

(I)One 20 ft container will house an iron monger/black smith

(ii)Another (20 ft) will be a repair shop for bicycles, tractors

(iii)Another (40ft) will be a cool room to store village produce before being taken to the market (store to be on a payment basis for use of cubicles inside)

  • Another( 40 ft) will be a paddy/rice storage facility
  • Depending on religious preferences and requirements a Temple , Kovil ,Mosque and Church could also be added
  • all effluent into one containment tank which would produce bio gas for cooking or lighting purposes ­( house and street lights)
  • Common deep water well for water to be pumped into a central tank piped to individual houses on meter
  • Rainwater harvesting in every household for agricultural purposes
  • wastewater or grey water (bath, washing etc to be pumped into holding tanks, neutralized and reused for home gardens
  • All green waste, household waste to be converted into fertilizer

 

Issues/ Questions

  • Where would you get such a lot of used /discarded containers?

Most containers I believe has an ordinary life span of say 10 years after which they are disposed of. If the President of the country appeals to the world shipping lines to donate old containers from all the shipping lines I firmly believe that we will acquire enough containers

 

  • Another frequent response /question, will it not be hot?

There are many factors that will create a comfortable ambience. First there will be cadjan /Palmyra leaf roof over the container. The container section will have 8 windows and 5 doors if necessary. At the top end of the container there will ventilation holes to displace hot air . If need be the walls can be insulated with paddy straw between a wooden facing and the metal of the container

 

  • What about the costs? I have been informed that to build a 500 sq ft cottage/house with brick/cement blocks and mortar and asbestos roof will cost around a million rupees. The cost here will be approximately 50% less for a 880 sq ft. house

 

The costs of course will have to be calculated.

Projected cost areas

  • Conversion of container to cut windows and doors and frame it with aluminum sashes, hinges and locks.

(ii)  Roof rafters of coconut ,Palmira or wild wood

(iii)  Thatching and preservatives

(iv)  Flooring of brick or clay tiles or mud and wattle  for the front and back areas

(v)  Sanitary fittings and water pipes

(vi)   Electrical fittings and wiring

(vii)  Ply wood/chip board separators for rooms and outer perimeter walls

(viii)  8 posts treated  of wild wood, coconut or palmyrah trunks to hold the roof with 4 posts in the back and 4 in front

Ix) Paint and other

(x) Concrete blocks to rest the container above ground

(xi) mud bricks for external walls

 

Advantages in comparison to a normal brick and mortar house

 

  • Cost factor :Costs will be much lower and savings in brick, cement and asbestos use
  • Location: The villages can be located anywhere in the country
  • Mobility : the container shells can be converted (doors windows and ventilation holes)one central facility and transported to any location
  • Life span: It will have a lifespan more than a wattle and daub house
  • Space factor: More space and facilities than a normal cottage of 500 sqft dimension
  • Speed: speed of construction will be a terrific advantage as each house will be completed with a maximum of 10 days( especially using labor of those who qualify for each house)
  • Environment friendly :as no asbestos is used
  • Placement: as they can be placed in symmetrical forms to suit any environment such as hilly, undulating or flat land
  • Orderliness: They could be self sustaining model villages. with all facilities and services.
  • Efficiency : all the external environment facilities provided at a lesser cost

 

(12). Foreign exchange inputs

(Need a study to be done by a task force of professionals)

Background : Over the last 60 years if independence one perennial problem was how to harness floating foreign exchange outside the legal system.

  • The new system

Open up secured duty  free/ duty reduced, complexes in about 4 to 5 cities around the country. All goods demarcated as luxury or non essentials ,this would include all that is available presently in airport duty to free shops as well to be made available ,

 

A novel concept is all  vehicles ( vans, cars motorcycles ,water scooters, luxury  boats , outboard motors, fishing trawlers , to mention only a few)  be imported by these shop owners or by their local agents  and paid in foreign currency . Likely buyers can place orders for goods through these shops on payment in foreign currency.

  • This will stop the foreign exchange drain on imports as the import costs will be recovered in foreign exchange.
  • All goods to be sold for US Dollars, Sterling or Euros and or any other freely exchangeable currency thus enhancing our reserves
  • No questions to be asked where you obtained your foreign currency. This proposal is not a novelty as It is presently in practice( unwittingly) in the duty free shops where you are not questioned where you obtained  the exchange. Further one  can pay by Visa card as well, at the duty free shop  and the transaction is converted into rupees at the bank.
  • Such a system will bring in foreign currency from the black economy, as well as local hidden money which can be converted  into foreign currency.
  • Most Sri Lankan foreign travelers , middle eastern workers will prefer to buy the goods in Sri Lanka instead of paying for freight and insurance, local clearance ,paying duties and collecting in Colombo .

The Cost

  • If you carry out a cost benefit analysis, the cost will be minimum to the government ( except income loss on reducing the duty) but greater income on higher turnover of goods sold
  • More’ black economy money’ will come into the formal market
  • less money will be smuggled abroad
  • All imported (paid in foreign exchange) goods will recover the foreign exchange component locally in foreign exchange

 

Author

Dr. Anton Balasuriya is a Development Economist with extensive development  experience in the Asia Pacific Region, Africa and Latin America. He  has worked on several development projects in many related fields in 34 countries. A noteworthy sojourn was in South Africa where as Senior advisor to the Mandela Government  he was responsible for  developing the small micro medium enterprise template for the country, as well as  establishing Government Capital budgeting templates and monitoring and evaluation systems,.  In Uganda, he was Chief of Party for a project titled COMPETE which was designed to address Poverty Alleviation via competitiveness mechanisms for the Fisheries, Coffee & Cotton sectors.

Dr. Balasuriya worked  as, a Senior Economist of the Central Bank of Sri Lanka , a  Senior Manager of Unilever, Founding  CEO of the Sri Lanka Business development Centre, before venturing overseas as CEO of Technonet Asia, Singapore, an international network of 13 Asian Pacific countries and thereafter  participated and led several assignments principally in the Development Economics genre.

Dr. Balasuriya earned a BA Economics from Peradeniya, MSc in Economic Planning from  the University of Stockholm and DBA and  PhD from  Edinburgh University with  his  thesis on Financial issues of small and medium  firms.

He has served as a consultant to innumerable projects both in Sri Lanka & overseas and helped establish several development  programs for local & foreign institutions and Governments.

DR.C. ANTON BALASURIYA

Contact details:   Tel.  +94 11 2584945Mobile: +94 779526530

E-mail: [email protected]

 

 

 

5 Responses to “Public proposals for Budget 2017 and Plans beyond 2017”

  1. AnuD Says:

    Public proposals for Budget 2017 and Plans beyond 2017. This is a Joke to fool voters.

    Remember, How Ranil Wickramsinghe talked about taxing more from rich people and they proposed billion dollar taxes which they did not charge or implement.

    Now, all those are forgotten and they started VAT to chage poor people.

    The result will be they ask from voters for proposals but they implement what the IMF want. Those proposals are to increase the gap between poor and the rich.

    See how Trump has not paid any taxes for years. Ask the same thing from medium income people ?

    Poor need to given welfare otherwise, the country will overflow with criminals.

  2. Christie Says:

    Dear Anton:

    Thanks for your analysis and proposals.

    In your analysis and proposals you have completely ignored the most important aspects of socio-politico- economic parameters and facts of the country.

    The control of the country is in the hands of the minority. This minority is an extension of the Indian Empire.

  3. aloy Says:

    Thank you Dr. Anton for this valuable contribution which should be studied by planners at the helm of affairs.

    But I do not think they would like to take anything from this. Their main concern is how to remain in power. So these may be like throwing pearls at swine.

    If not will they plan to spend so much money collected from tax payers on the useless lot at Diyawanna?.
    Out present day youths are well connected and know about things happening in other parts of the world. They have realised that there is no future for them in SL. I have seen the first ODI played in Dambulla which was packed to capacity with youth, whom I suppose were mainly from Rajarata area. Each had a mobile (smart phones?)in their hand and waving in unison when the night fell. They would learn Korean languge and go to Korea ( and create little Koreas there in the process as was seen in a recent video) and do menial jobs rather than work as masons carpenters etc at home. You have not touched on this aspect in your write up.
    On the whole your proposals looks very valuable. In fact this is the type of people we need as leaders if we are develop our country.

  4. S.Gonsal Says:

    All Public Servants particularly POLITICIANS shall pay income tax. Of course a tax free threshold must be set not to affect the ordinary people who pay tax anyway through VAT BTT etc. However most our politicians a filthy rich and MUST pay INCOME TAX. Whe I was earing Rs 3000 per month in 1980 I had to pay income tax of more than 500 Rs..

  5. Dilrook Says:

    Although good proposals overall some are not.

    There is no economic or political sense in teaching Tamil language to Sinhalese. With Sinhala and English, one could communicate to 95% of the population and that is sufficient. Instead of wasting money, time and effort to teach Tamil to Sinhalese, it is worthy to teach them more English or Korean and Japanese (extremely useful economically for Sri Lankans today), German, French or Arabic. Almost all developed countries and fast developing countries teach only one or two languages to children. Sri Lanka must follow.

    English must be the top development priority, not infrastructure.

    Charging 50% of university cost from graduates upon employment is disastrous. These youngsters are just starting life and starting salaries are not sufficient. Further burdening them is unfair. Instead proportionately charge university cost from those who migrate (not going for Sri Lanka Foreign Employment Bureau registered jobs). Even for them, had they served Sri Lanka (locally or in SLBFE approved jobs abroad) for over 7 years post graduation, nothing should be charged.

    No special consideration should be given to the north and east. Already the north and the east recorded over 20% economic growth compared to just 5% for some other provinces. Despite this, their income tax collection has been extremely poor. This must be raised. I agree with a tax file for every adult irrespective of paying tax or not. It must be cross-checked against the voters register and the land registry. Any registered voter found not to have a tax file and not paying tax, given the income/assets, must be investigated. Registered voters not paying taxes and not voting must be investigated.

    Public sector must be scaled down. Defence spend is needed and 2.5% of the GDP must be allocated to defence. Otherwise, disruptions will wipe out decades of economic growth. Apart from service personnel, the public sector employs 1.1 million. It is my contention that 600,000 is sufficient to do their work. All administrative functions of 7 provinces (outside the north and east) can be done by one service centre. All administrative functions of hundreds of LG bodies can be done by the same. The number of ministries must be reduced to 30. Subsidies for tea and garment industries must be cut down to zero as they have no future potential.

    The Constitution must cap external borrowings taking into account net forex earnings of the preceding year (net exports + net official inward remittances). If it is negative, there is no room for borrowing. Local borrowings must be capped to GDP growth rate of preceding year. Minister in charge of finance must be a qualified economics or finance professional.

    We are yet to feel the full force of the debt trap. Mahinda was bad in foreign debt but Sirisena and Ranil are worse so far. Borrowing $10 billion for 21 months in external debt is unacceptable. Worse still, nothing was constructed from this $10 billion.

    We are a foolish country that wastes billions to import luxury vehicles for utterly useless ministers and MPs but cancel vital A380 purchases with a cancellation fee of $115 million. ETCA will devastate the economy. Since 2015 foreign reserves are down, FDIs are down, exports are down and average regime GDP growth rate is down. The cancer of corruption reached the Central Bank too with recurring wastage of over 5.2 billion rupees a year from the bond fraud.

    If anyone had any illusion that UNP was relatively better in economic management, it is time even for the most daft of them to shed it. UNP is utterly incapable of economic management.

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