Time to reconsider

According to the Motor Traffic Department, last year saw 359,243 motor vehicle registrations in the country - an increase of 155,068 over the 2009 figure. What is more, the numbers keep increasing even in the current year. Who said Sri Lanka was a poor third world country? Certainly not, going by the number of motor vehicles on our roads. Of course the 50 percent slashing of customs and import duty is the chief reason for this surge in the number of motor vehicles. Not just in Colombo even in the outstations one could witness a sudden rise in the number of motor vehicles.

No doubt the duty concession is the main reason for more and more people purchasing motor vehicles. But it is not the only one. The boom in the economy in post war Sri Lanka, the revival of those sectors that were hitherto dormant such as tourism, enhanced trade and business prospects, the opportunity for increased mobility with free access to the North etc have all combined to make our roads teeming with vehicles.

Add to this the less stringent laws governing bank lending and the large number of finance companies offering easy lending terms. Is it any wonder that our roads are today choc-a-bloc with vehicles of every type and description? One could also venture to say that the large number of shady businesses that are flourishing in the country such as the drug trade have also indirectly contributed to the mass of vehicle through the generation of a coterie of new rich across the length and breadth of the country, while exposure of the people to the larger world through television and particularly Western lifestyles have also added to the vehicle surge on our roads.

While all this is an emerging sign of sophistication of Lankans in keeping with the rest of the world not to mention the instinctive desire for upward mobility in society, the million dollar question is, can the country afford this luxury? To begin such a huge concession for mass import of motor vehicles necessitating a massive flight of foreign exchange at a time the country is set to take off on an ambitious post conflict development program is indeed ill advised. A motor vehicle today is part of the scene in most of our households in the city even those with an average income. A majority of Lankans at least had a motorcycle at home even before the introduction of the duty waiver. Therefore was such a move warranted?

Besides what about the indirect cost to the economy in the form of delayed journeys to workplaces due to massive traffic jams resulting fuel waste and of the loss of man hours, when a good part of the day is spent on the road. With inadequate roads to accommodate the heavy volume of traffic that is ever increasing, traffic congestion is seen not only in the heart of the city but on all main roads and trunk roads that are a daily occurrence where vehicles travel at snails pace. There is also bound to be an increase in the volume of vehicle spare parts that needs to the imported, with the exponential increase in the number of vehicles on our roads which needless to say is a drain on our foreign exchange.

Will whatever economic benefit contemplated by the Government when it introduced this 50 percent duty waiver be able to offset the negative impact on the economy as we have enumerated? What about the massive fuel bill that the Government will have to incur for these ever increasing number of vehicles especially with another oil price hike in the offing as a result of the uncertain political situation in the Middle East.

True, we should move with the outside world and provide our people with all the modern facilities enjoyed by the rest including the provision of low cost conveyance. Equally, this should be carefully weighed with the economic consequences ensuring that the country does not lose on the long run. True, the move by the Government to have enabled even the average citizen to purchase a vehicle of his own and be counted among society is to be commended. But now that this concession has been availed of by large numbers what is suggested is to lift this duty waiver in stages, so that the economy would not be affected unduly by the Government having to foot a huge fuel bill (which is subsidized) just in order to make vehicle owners the majority of the population.

Instead it should offer such concessions for the import of more buses to augment the present fleet which would not only have minuscule impact on the foreign exchange position given the limited scale of the imports, while importantly, providing a stable and satisfactory service to the ordinary masses.