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| Wednesday, 17 July 2002 |
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Letters | |
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Please forward your letters to [email protected] in plain text format within the e-mail message, since as a policy we do not open any attachments.
Changes to the electoral system The above is a very good move by the PM. Hopefully, the changes will bring about a significant reduction in the number of "desalapalakayo" we have been seeing in the past few decades. Except for a few, many create nothing but chaos and enmity within societies. Perhaps it is also timely that legislations are passed to ensure minimum educational qualification such as a recognised university degree and past experience in public service as a grass root member to qualify as a representative in the parliament. It is very disappointing and more often embarrassing to see how some of our senior public servants respond to the questions by international journalists on issues relating to Sri Lanka as well as international matters. This reflects the lack of knowledge of the subject and their inability to acquire the skills due to lack of education. PM's interview to Channel News Asia recently in Singapore hosted by a
talk program called 'In Conversation' was excellent. I wish all our
members of parliament had similar backgrounds. We are indeed at great
disadvantage to have lost good leaders like Lalith Athulathmudali and
Gamini Dissanayake. If we are to change for better, then these issues
should be dealt with head-on without fear or favour. Self criticism is
indeed the best path to self improvement. I am writing this letter to be in line with the "Ministry to increase AL/IT classes" appeared in the Daily News 04.02.2002. First of all my applause to the Education Minister Dr. Karunasena Kodituwakku for his timely intervention on this long overdue matter of national interest. Many developing countries are following the footsteps of the developed nations to be in line with them. This is of vital importance for the development of Sri Lanka to brush shoulders with developed nations in the world in the new millennium. Sri Lanka must produce skilled man power today urgently to achieve the ambitions of the peace loving nation. Today, all over the world, all the conventional subjects are taught and learned across the board using Information Technology. All the undergraduates and graduate students following various courses in the universities take compulsory computer literacy papers. Teachers teach how to make use of the multi-media to access knowledge. The time of cramming and spoon feeding is long gone. The next discipline that should go parallel with our IT education is English language education. Without which whatever knowledge is similar to running out of fuel in a car between a journey. If our people are well equipped with these two arms, IT and English, they will find their way even off shore and bring foreign exchange to our country. The current problem is that our country has produced so many graduates without a competency of an international language. Majority of our parents cannot afford to send their children for overseas education. The intention of this letter is to draw the attention of the present education gurus in Sri Lanka, this time, to think about under privileged children, and make way for them to get a decent IT and English education and they will earn a buck for their own bread and butter. Then they will mind their own business. Another important fact is the
affordability. How many parents in Sri Lanka is capable of buying a
computer for home use. This probably this does not come under the purview
of the education ministry, but it can influence this area as well. Make
them affordable to the general public. Internet and e-mail charges are
horrendous and unaffordable to the public. I am confident that current
education minister, Dr. Karunasena Kodituwakku, has a vision and he is a
very capable gentleman who was once the vice chancellor of the Sri
Jayewardenepura university can make a positive change in the education
sector in Sri Lanka. There is no doubt about it!. Jak tree is very much in the news these days to encourage the people to grow this tree as an insurance against a possible future food shortage. Several articles have already appeared in the newspapers about the usefulness of this tree and an article referring to the use of this tree for dietary, various domestic and utility purposes says that no part of this tree is wasted. This tree is truly a useful tree like the coconut tree and its cultivation in every household must be encouraged. I write to add to what the other writers have already said about this tree. Jak tree can be used as windbreak in windswept areas to minimise the damage caused to agricultural crops by the wind. Walaboda Estate in Balangoda is subject to very strong winds and during my time as superintendent there, I planted jak and kitual trees as windbelts along the boundaries, field paths and internal roads of that plantation. Jak leaves are wind-resisting and can withstand the strong winds. According to the present superintendent there, those jak trees are
bearing fruits which are now used by the workers of that estate. The Kitul
trees, he says, do not exist there now, perhaps removed by someone after I
left that plantation. There are windswept areas in some plantations and
Jak trees can be successfully used as wind barriers. Apart from those
estates, the other estates too can benefit by planting jak trees along the
boundaries and along one side of the internal roads. Objection to planting
jak trees may be raised for heavy shading of the tea, but shade can be
regulated and controlled like the high shade trees. On maturity the jak
trees will produce high value excellent timber which will compensate the
estates for any loss, trouble and expenses in establishing a plantation of
jak trees alongside their main crop within the same acreage. If all the
estates can participate in jak tree planting campaign as suggested, there
will be, in addition to the economic value of the tree as timber and food,
an improvement in the environment with the beneficial effect on climate
and bird life in the presence of trees. There are several species of birds
that feed on insect pests. It is hoped that the Plantation Companies will
give due consideration to this matter and get their estates to join the
jak tree planting campaign. Privatising, down-sizing or closing down are some of the steps taken by this government in regard to its institutions due to various reasons that seem to be fair to them despite opposition from different sources. In order to implement it voluntary retirement schemes are being introduced and except a few institutions like Air Lanka, Central Bank etc which offer over a million rupees as compensation, others have limited their amounts to nearly five or six lakhs which is not sufficient when compared to the present situation of our nation for survival - feeding a family, paying for rent, water and electricity, spending for children's education, consulting doctors, purchasing drugs, travelling costs and various other requirements. To make things worst the 'saving interest' too have badly dropped. But the very unfortunate matter is that the basic salaries of the employees of most of the state institutions are very low and since compensation are calculated on basic salaries such employees do not come even closer to what has been offered to them. So those workers do not wish to leave their employment thus pushing the government into some problems which in return will hinder its development plans. However, if the interim allowance given by Circular Nos. 15/2000 &
24/2001 of the Ministry of Public Administration, until the finalized
Report of the Salary Commission is forwarded for implementation, is added
to the basic salary some sort of consolation could be expected. But in
regard to this interim allowance there are different opinions amongst the
employees and it is reliably understood that the interim allowance, being
that of a pending salary increase, has to be included for the computation
of the compensation and the gratuity as well. The bankruptcy of Enron and the admission of guilt by its auditor Anderson has brought into serious question the roles played by financial intermediaries such as investment banks, stock brokers and the roles played by auditors. Of these categories, investment bankers and stockbrokers have been blamed for stock market booms and busts from time immemorial and with each bursting of a stock market bubble, new laws have been introduced to control their operations. But the Enron episode was unique because it also dealt a serious blow to the audit profession as well. Auditors were expected to steer clear of vested interests and be impartial guardians of shareholder interests. But it has never been the case. Even though admission of guilt by Anderson and subsequent criminal prosecution received wide publicity and created a bad reputation and a cynicism about the audit profession it was actually nothing new. In the main business & financial centres, the rot really started when auditors wanted to upgrade the advice they routinely gave their clients into an industry or profession by itself and began setting up subsidiaries to handle the advisory function. The rates charged were exorbitant but were quite unsurprisingly never questioned by auditors and invariably hidden from shareholders as a restructuring charge. Whenever the advice given by the subsidiary went wrong, the auditors, instead of pointing it out, did their best to cover up or give excuses for it, thus deceiving shareholders even more. During the last decade or so, leading audit firms have faced severe questioning and stiff penalties were imposed on them for acts of this nature but these were settled privately arousing little or no publicity. In fact the number of leading accountancy firms which numbered over 20 at the turn of the 90s has now come down to less than 5 mainly because of amalgamation and mergers brought about by the inability on the part of the auditors to pay the heavy fines imposed on them for their lapses and misdemeanours. Enron was only the lowest ebb on that decline. Even though it may be the lowest for the rest of the world, auditors in our country have still not learnt their lessons. They are quite prepared to certify anything that comes their way as a 'true and fair view' of the financial position and to provide excuses to cover up friendly directors. Otherwise, how can 'reputed' auditors in Sri Lanka certify the accounts of public quoted companies involved in well publicized acts of misconduct during the recent past without any comments. These range from banks which invested in competitor banks in violation of banking laws, purchasing shares in the names of employees to circumvent laws, reporting unaccrued profits to raise share price, ignoring un-funded pension liabilities, under-providing for loan defaults, private provident funds being used for illegal investments and so many such accounting fudges. So it seems that the auditors in Sri Lanka, most of whom are branches of the international top 5 have not yet learnt a lesson from their own parent companies' mistakes. It is strange that the Securities & Exchange Commission and The Institute of Chartered Accountants and other accountancy bodies are not taking any action to impose fines on errant auditors even at this late stage and give publicity to their misdeeds. That will be one way of redressing the wrongs and losses suffered by
small time investors who act purely on published accounting and financial
reports. Other option would be for the aggrieved shareholders to resort to
individual actions against auditors which can be disastrous for both. Spelling out plans to save the economy the Prime Minister has stated that the state corporations which were maintained with bank borrowings cannot be allowed to do so any longer. One can understand such financial assistance under certain circumstances but it cannot go on forever. As far as we are aware, in the case of the Sri Lanka Insurance Corporation, rather than the banks or the state maintaining it the SLIC is in a position to bail out the Government by investing in Treasury Bills or whatever means required. As for the three institutions named in the Prime Minister's address, namely CPC, CEB and CWE the picture is different. Three full fledged commissions should be appointed forthwith bestowing with powers of investigation of corruption, fraud and abuse of powers. These commissions should also be empowered to confiscate properties and assets of guilty parties and with powers to enforce penalties. The corruption and abuse of powers should include collecting commissions, on fraudulent sales practices, renting out buildings on massive rents, contracts, fraudulent deals in purchases of generators, transformers, vehicles, giving out thousands of appointments to kith and kin and followers without regard to procedure and well above norms of cadre, etc. Such high powered Commissions will reveal why these three institutions
have turned into loss making institutions and are debt-ridden today. No
Government has the mandate to sell such crucial institutions. The private bus service which has become the No. one killer of innocent people on roads, in addition to the severe hardships caused to the travellers, should be totally discouraged in future. If we add more buses to the existing fleet of buses driven by
indisciplined reckless drivers, and manned by irresponsible and impervious
management, entire transport system will deteriorate still further. In the article on "Empowering Workers: A crying need for pension reform" (DN 28th June), Hon. Minister of Employment and Labour, while highlighting salient features (including drawbacks) of the public sector pension scheme (PSPS) and the EPF/ETF had indicated that according to World Bank estimates the replacement rate that the EPF/ETF provides for its members is only 25%. Hon. Minister quite frankly had said that this is because of the poor returns generate by the EPF/ETF for their members and that these funds are predominantly utilised to finance the Government budget deficit. Perhaps this low 'replacement rate' may be the reason why people have a general belief that the pension scheme is more attractive than the EPF/ETF scheme. My main purpose is to highlight, if ETF/EPF provides a good return/dividend, what an employee gets at the end of his service (provided he has completed substantial number of years of service) is sufficient to receive a reasonable return compared to the pension receives by an employee (of same situation) and some times more than his own salary, if the money he receives from ETF/EPF at retirement, is rationally invested. Two examples are given below to clarify this. In these examples it is assumed that the monthly contribution to the EPF/ETF by employee and employer is 23% of the salary and rate of dividend is 8% per annum. (Some Private Provident Funds have invested their funds in Commercial Banks, Treasury Bills etc. and have granted its members more than 12% return/dividend in past several years. According to DN of 11th July, ETF has declared a dividend of 11% for 2001). Figures other than salary in the examples are approximations. Salary figures are only for computation purposes and not related to any real situation. Assume, the salaries received by two employees during 40 years of service are as follows: Employee A Initial monthly salary Rs. 1000 with 9 increments of Rs. 50 going up to Rs. 1450. Then from Rs. 1750 to Rs. 2425 with 9 increments of Rs. 75. Then from Rs. 2900 to Rs. 3800 with 9 increments of Rs. 100. Finally from Rs. 4500 to Rs. 5625 with 9 increments of Rs. 125. If he retires after 40 years of service, he would receive Rs. 1,343,000. If the service is 35 years or 30 years he would get Rs. 855,000 or Rs. 529,000. In view of the increased exemption threshold, retiring benefits only over Rs. 1 million are liable for tax. Accordingly for Rs. 1,343 million, employee would have a net balance of Rs. 1,325,850 after tax. Therefore the above sums should generate monthly incomes of Rs. 8800, Rs. 5700 and Rs. 3525 respectively if invested at 8% interest rate. However present interest rates are higher than 8% and therefore a higher income could be obtained. If the dividend granted by the EPF/ETF is raised to 10%, the amounts receivable (before tax) would be Rs. 2,102,000 Rs. 1,249,000 and Rs. 726,000 respectively for 40, 35 and 30 years of service and would generate a higher income. Employee B Initial monthly salary Rs. 3000 with 9 increments of Rs. 100 going up to Rs. 3900. Then from Rs. 4500 to Rs. 5850 with 9 increments of Rs. 200. Then from Rs. 6600 to Rs. 8850 with 9 increments of Rs. 250 Finally from Rs. 10,000 to Rs. 13,600 with 9 increments of Rs. 400 The mount he should receive before tax is Rs. 3,424,000 if he serves 40 years. If his service is 35 years or 30 years he would receive Rs. 2,190,000 or Rs. 1,372,000. Respective balance amounts after tax would be Rs. 3,135,000, Rs. 2,086,000 and Rs. 1,353,000. At 8% interest the monthly income would be Rs. 20,900, Rs. 13,900 and Rs. 9020 respectively. If the dividend is raised to 10% he would receive Rs. 5,450,000, Rs. 1,249,000 and Rs. 726,000 respectively before tax. A significant advantage of EPF/ETF scheme is, that the full amount is available for disposal for the employee's dependants upon the death of the employee. It should be very clearly noted, if an employee gets a higher salary/substantial increments towards the end of his service, the amount he receives at retirement will not be sufficient to produce an income closer to his last drawn salary by way of interest. The above are hypothetical salary figures and interest rates; but it
shows that if EPF/ETF could generate a reasonable return for its members,
based on market rates, the end result would not be so bad as what w World
Bank has found, and it would be an attractive alternative to pension. The
dividend rate can make all the difference. Crime is a growing concern to all nations. Especially, the average citizen lives daily in fear of becoming a crime statistic. Consequently, fewer Sri Lankans dare to walk the streets,and the empty streets then become even more dangerous. It is often said that the "good" people live in a self-imposed prison, while the "bad" people run free. The cause of crime is lack of character, not lack of money. When children are allowed to think like criminals, the result is quite obvious - they become criminals. Also, there are many causes of crime. Slums, Poverty, and deprivation cause one kind of crime - the highly visible anti-social crimes of economic opportunity. A violent home environment and violent mass media contribute to another
kind of crime - passionate crimes against the person. Human nature is
capricious and unpredictable. So anything bad, quickly nip it from the bud
of temptation. Now, let this article be a forerunner in eradicating crime,
because this act is a curse in Society as a whole.
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