Politics

President calls JVP's bluff

Inside Politics 

By Suranimala 

While President Chandrika Kumaratunga lashed like a gaffed fish last week in the face....

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A never-ending struggle 

Inside Politics  By Suranimala  While President Chandrika Kumaratunga lashed like a gaffed fish last week in the face of her failure to bring down the spiralling cost of living as well as resume peace talks, Opposition Leader Ranil Wickremesinghe upped the tempo by bringing in the 2005 presidential election into the equation. There is no gainsaying President Kumaratunga's strategy of derailing the Ranil Wickremesinghe administration at a time it

constituent assembly before end 2004, but that move misfired badly due to the want of a majority in parliament.

Total confusion

And having gone into an alliance with the Marxist JVP for political expediency despite sharp contradictions in policy particularly in relation to the ethnic issue, the President now finds herself in a political straitjacket resulting in total confusion in government.

Still desperate to abolish the executive presidency and continue the family business, described as politics, the President was changing her tune on key issues by the day in her bid to find a majority in parliament that would fulfill her dream, albeit with little success.

The President worked on the premise a comfortable majority would be secured at the election to move her agenda forward and had not made any allowance for failure and it is this shortsighted strategy that has the government at sixes and sevens today.

On the one hand, the President realises, the only way to get the peace process restarted and unbelt the US$ 4.5 billion pledged is negotiate with the LTTE on the basis of the ISGA. That way would at least see some investor confidence and development in the country and provide the people a semblance of hope.

For that, Kumaratunga knows, she will not only have the support of all minority parties in parliament but also the UNP, which, however, is of little use to her since it would not help abolish the executive presidency.

And in any event, trekking down that path would also mean she will have to leave the job unfinished for her successor to do the honours since no final agreement is likely to be reached before mid 2005.

Such a strategy, however, would also mean losing the support of the JVP, without which Kumaratunga knows only too well her political survival in the south is doomed.

All that in the normal scheme of things should not matter to a President who is doing her last lap in office and would like to leave behind a legacy of peace but Kumaratunga is on an all together different trip, one of continuing her career in politics and for that the JVP's support is essential, at least for the nonce.

Mixed signals

It is for these reasons, the President is sending confused signals, unsure how to proceed, agreeing one day to negotiate with the LTTE on the basis of the ISGA and changing her mind the next.

To make matters worse, the President thought she had a way out of the mess by conjuring up an unwieldy national advisory council for resuming the peace talks only to be reduced to a farce overnight with both the UNP and TNA dismissing it as a delaying tactic.

It is into this state of confusion in government that Ranil Wickremesinghe threw another spanner by setting out his plans for economic revival and resumption of the peace talks on assuming the presidency.

This move not only brought into sharp focus the impending presidential election next year but also that the UNP has already started its campaign, compelling the SLFP, PA and the UPFA prospective candidates to also throw their hats into the ring.

What Wickremesinghe did was send a signal to prospective candidates from the SLFP and JVP in particular, he was already in the ring and for them to jump in without giving him too much of a headstart.

Needless to say, a candidate for the presidency needs to get his team together, draw up policies, collect funds, build up alliances, set up an islandwide network, all of which takes time and that is exactly what they would not have if the preoccupation is the abolition of the executive presidency, which by the day is becoming more and more elusive.

If this scenario was not bad enough for Kumaratunga, JVP's Wimal Weerawansa in the company of Elle Gunawansa Thero too upped the tempo last week by publicly stating at a meeting of the Patriotic National Movement (PNM), the Kumaratunga administration would be sent packing if more burdens were heaped on the people and talks resumed based on the ISGA.

At the same time, the President was urged by the international community during her recent visit to the UN to resume talks with the LTTE at the earliest if the aid pledged was to be released and it is with such pressures on her mind, Kumaratunga strode into the cabinet meeting on Wednesday, September 29.

And at the very outset, the President fired a volley of bullets at Wimal Weerawansa given the presence of JVP ministers at the cabinet meeting, stating the JVP Propaganda Secretary had spoken out of turn at the PNM meeting held at the Sugathadasa Stadium.

Threats

The President said it was time these so-called patriots matched their words with action rather than make idle threats about toppling the government at street corners.

"I read about the remarks made by Weerawansa and Elle Gunawansa in the media. Don't you know Wimal, he likes to show off and so does the monk who claims to oversee a temple near the BMICH. He is also a member of the government apparently," the President had stated sarcastically.

The President went on to say such rhetorical statements were creating problems for the government, particularly when it comes to stability and if they were misreported, clarifications should have been sent to the media.

Said the President - "I am telling you, for heaven's sake, don't just go and stand on street corners and holler about what the government's policies are. If there is a desire to topple the government, then instead of just saying so, go ahead and do it. But don't forget that we also have means to avert the problem. Tell Wimal not to go around shooting his mouth off."

Possibly sensing trouble, Posts and Telecommunications Minister, D.M. Jayaratne sought to bring about calm before the JVP members responded, stating both parties had problems which needed ironing out.

"We both have problems. The JVP also has problems. But we are both parties in government and therefore both parties must take responsibility for decisions made by the government. Neither party can absolve itself from blame," Jayaratne said.

Continuing, the Minister said the SLFP MPs were of the view there was no way the country can move forward without taking forward the peace process but also understood the problem faced by the JVP of changing their position overnight.

Added Jayaratne - "There was a position they presented to the people and that is their party position as well. We need to talk with the JVP and reach a compromise on the issue. If we could start doing that it would be a victory for us."

The President, however, was not inclined to sugarcoat her criticism of the JVP reiterating her challenge and stating it was time the JVP learnt the realities of governance.

"Instead of setting the nation on fire, we need to cooperate and also learn to adapt with time and realities. I am not saying we have to disregard what the JVP is saying or drop the party along the way. We want the JVP to accept realities and adapt," Kumaratunga added.

Dilemma

It was JVP's Cultural Affairs Minister, Wijitha Herath who responded to the President's tirade, stating his party was not opposed to the resumption of peace talks based on the UPFA manifesto, which of course states it should be not only on the ISGA but core issues as well.

"There must be a consensus within the UPFA on how peace talks are to be conducted. If negotiations took place according to the UPFA's policies, the JVP would not stand in the way," Herath said.

The UPFA's manifesto in fact was the President's dilemma since that spoke of discussing a final solution whereas the LTTE insisted on negotiating the ISGA first since both parties had agreed the peace process was to continue from where it stopped.

And the President's reply to Herath underscored this frustration. She said the peace process had to be kick-started and various strategies were in the pipeline to recommence talks including the appointment of a national advisory council.

The President went on to say she had invited Opposition Leader, Ranil Wickremesinghe to participate in the national advisory council but he was characteristically noncommittal.

Said Kumaratunga much to the amusement of the ministers - "Don't you know him, always noncommittal. When I asked him, he said 'hmm' and when he wrote to me also he said 'hmm.'"

Added she, "the TNA has also decided not to attend the national advisory council but I have other plans for the recommencement of negotiations. The NGOs have a crucial role to play in the peace process and assigned specific tasks. When NGOs are brought in, Elle Gunawansa Thero too would have a role to play."

At this point, JVP's Agriculture Minister, Anura Kumara Dissanayake struck a note of caution on involving the NGOs in the peace process, adding Elle Gunawansa Thero was not a member of a NGO but an incumbent of a temple.

The JVP Minister further said, irrespective of the peace talks recommencing, the national advisory council would not survive if there is NGO involvement due to a huge anti-NGO trend in the country.

Not agreeing, the President said though there were many different NGOs in various shapes and sizes, the peace process cannot be taken forward without NGO support.

But the JVP Minister disagreed, cautioning the President again on the involvement of NGOs, stating it would seriously jeopardise the peace process and their involvement.

Not about to submit to the JVP's subtle threats, the President said the time had come for her to start making decisions and warned the JVP not to pull the rug under her feet.

What the President in effect told the JVP was her intention of proceeding with a plan of action, notwithstanding the position taken by the Marxists and her readiness to face any challenges posed by her ally. 'Toe the line or else' was the succinct message and it remains to be seen how the JVP will now react.

Cost of living issue

Be that as it may, the next topic which received the attention of the cabinet was the spiralling cost of living, which had the masses against the government with several ministers stressing the importance of giving the issue number one priority.

The ministers said the cost of living was the issue of the hour and had escalated to such levels, the public were no longer able to bear it but the President who castigated the UNF administration for not bringing down the cost of living told her ministers the people should not expect the government to perform magic.

Said the President, "It would be nice if the government could feed the people and provide them with the relief required. But even the government has to earn money to provide subsidies. And with the cost of oil escalating, the cost of living the world over is rising."

Having listened to the President, one minister said the price of fuel being increased by Rs. 8 per litre at once was a huge problem but Kumaratunga dismissed the claim stating it affected only Colombo.

"The people should know how to manage their vehicles better. We have cars in this country that even Singapore and Japan don't have. I have ideas on how to manage this problem better," Kumaratunga said, no doubt brimming with ideas after her stay at the Waldorf Astoria in New York just the previous week and observing the traffic problems in the Big Apple.

Toll system

The President's idea in fact was simple. Introduce a toll system for vehicles entering the city. "A toll should be charged from every vehicle entering the city. When they start feeling the pinch in their wallet, they will leave their vehicles at home and use public transport," she said.

Kumaratunga further said a barrel of oil has increased to over US$ 50 and warned further fuel prices hikes will be in store if a barrel goes over US $60.

"If my idea is implemented, we would be paying less for fuel and the effects of the price increases would be minimised and people would stop talking so much about it," the President added, leaving her ministers aghast.

It was Transport Minister, Felix Perera who finally belled the cat, stating careful thought should be given to the proposal before implementation since it would seriously affect government's popularity, a view endorsed by Public Utilities Minister, Dinesh Gunewardena.

Said Gunewardena - "If we start taxing people like this, they will start to think we are going back to the stone ages. Some of our ministers said such things during TV debates and were subject to intense public criticism."

However, the President maintained, the only way to control fuel consumption was by introducing a toll system, adding that she would revert to cabinet when the scheme is drawn up.

That the government was in a state of confusion when it came to overall policy be it on the peace process or the economy was also evident when the next subject on the agenda was taken up, namely the revesting of the CWE.

It was a cabinet memorandum submitted by Commerce Minister, Jeyaraj Fernandopulle that came up for discussion though the Minister himself was not present, being away in India with his secretary, shopping for cheaper rice.

Taking Fernandopulle's memorandum in her hand, in a voice ringing with anger, Kumaratunga asked, "Are these things we can do? Do you think the Treasury plucks money from the trees?"

"We can't even grant subsidies at the moment, how on earth can we think about buying back Sathosa? As if that was not bad enough, statements have been made that the CWE was going to be repurchased. Do you think that just because we bring back Sathosa, the cost of living will go down? These are not things we can do. Let's see about it when we have some money."

Interestingly, not a single JVP minister spoke on the issue calling for the revesting of the CWE though it pledged to do so whilst in opposition and the cabinet paper of Fernandopulle came to be rejected without a murmur from a single minister.

And the eventful meeting was far from over with the President once again training her guns on the JVP, this time over seven acres of land for a water project in Kandy.

The President no less had submitted the cabinet paper to allocate seven acres of land for the water project in Kandy, leading to opposition from JVP Minister, Anura Dissanayake much to Kumaratunga's consternation.

Land policy

Taking high moral ground, Dissanayake said there was a land policy formulated by him and no land would be allocated on a whim, which comment was what had Kumaratunga fuming.

Asked Kumaratunga - "How much land do you have?"

Pat came Dissanayake's reply - "500 acres."

Shot back Kumaratunga - "What do you plan to do with your 500 acres? Do you have policies regarding them as well? When foreign investments come to the country, are we supposed to hold on to the state land and grant them private land?"

Not relenting, Dissanayake went into JVP theory and started explaining the land policy in detail, only to be cut off in full stride by the President.

Kumaratunga said she was not interested in such theories but action and insisted the land be allocated and Dissanayake at that stage meekly complied.

The developments in cabinet last week only helped underscore the state of confusion and lack of coherent policy in government, which the opposition is now ready to pounce on.

With the UNP having already launched its presidential election campaign, baiting the UPFA to respond, Tourism Minister, Anura Bandaranaike has made it known to confidants he will soon take up the challenge posed by Wickremesinghe.

The UNP on the other hand, with its reorganisation drive in full flow, has planned a series of protest campaigns in October targeting mainly the cost of living given their success at the initial outing on September 24.

Towards this end a huge three wheeler procession is planned for October 5 near the Lake House intersection protesting the fuel price hike followed by a horning campaign in the city on October 19. This is to be followed by a series of protest actions throughout the country on October 29, also against the rising cost of living.

At the same time, the UNP is also pushing the government to start talks with the LTTE based on the ISGA proposals, once again creating confusion within the UPFA given the policy contradictions.

The cost of living campaign in particular is to focus on the JVP's broken promise of not only bringing down the cost of living but also a 70% wage hike for all public sector employees.

Mounting tension

With tensions already mounting between the SLFP and the JVP, the pressure applied by the UNP is bound to tell with the Marxists having to decide whether they will hitch their tent permanently to Kumaratunga and face the consequences or maintain their independent identity and part ways.

In this context, the national advisory council meeting scheduled for tomorrow, October 4, will further exacerbate the situation with more diverse positions bound to emerge making the recommencement of talks impossible.

Given this scenario, don't count on a merry Christmas this year or a happy new year for that matter.

COL - A kite with out a string

By Mandana Ismail Abeywickrema 

Sri Lankan masses apart from facing a drought or floods are now engaged in a bitter battle - the battle to defeat the rapidly escalating high cost of living.

The increasing cost of living has now been compared to a kite without a string, rising higher with no control whatsoever, leaving the masses waiting for a deus ex machina to save them.

Price adjustments

As a result, the government was left with no option but to adjust prices accordingly. Also, in order to maintain a budget deficit of about 8% GDP, price adjustments, especially in fuel was inevitable.

The first price hike under the UPFA came when the government did not renew the agreement to subsidise gas. From then on, people have experienced hikes in diesel, petrol, electricity, transport fares and several consumer goods including rice and milk food.

Within a short span of two months, the country has experienced several fuel price hikes mainly attributed to the increasing global fuel prices, now over US$ 50 per barrel. However, for the country to benefit from declining global fuel prices, a steady rupee is a must and further depreciation would only pull the country further into a quagmire.

The increase in fuel prices, especially diesel, has had a cascading effect on the country's economy on the whole. What with the increase in transport charges, prices of goods have seen an increase.

Increases in the petroleum sector began on July 23 soon after the provincial elections when the price of a litre of petrol was increased to Rs. 65 from Rs. 57. On August 13, the price was further increased to Rs. 68 with the latest being the September 24 increase of Rs. 2 in a litre of petrol within the Colombo city limits to Rs. 70.

Diesel was first increased on August 13 by Rs. 4 to Rs. 36. On September 24, a litre of diesel within the Colombo city limits was increase to Rs. 44 while in outstations, the prices were increased to Rs. 42.

However, the price of kerosene has not been increased.

Bus fare hikes

Bus fares saw an increase with the latest fuel hike, initiated by the Private Bus Operators Association (PBOA) and the fares of CTB busses will be brought on par with the private bus fares tomorrow (4) and railway fares too are expected to see an increase in a few weeks.

Speaking to The Sunday Leader, Transport Minister Felix Perera said that although the PBOA requested for a 15% increase in fares, after discussions, it was brought down to 6-7%.

Perera said that the first sector charges have only been increased by 50 cents to Rs. 4.

As for an increase in train tariffs, Perera said that the matter is yet to be decided.

According to the revised bus fares, while the Rs. 5 fare remained the same, fares from Rs. 6 - Rs. 27.50 were  increased by Rs. 1, fares from Rs. 27.50 - Rs. 40 by Rs. 2 and fares over Rs. 65 by Rs. 3. The maximum increase was seen in the Rs. 247 fare, which was increased to Rs. 260.

However, an increase in diesel prices has also resulted in an increase in goods transportation as well. Prima last week decided to add a Rs. 10 transport charge to for transporting flour to the market.

The increase in the country's fuel prices have created an impact on power generation as well. Although the Ceylon Electricity Board (CEB) was on the Treasury's subsidy receivers' list, cabinet last month approved a 7% increase in electricity prices.

Chairman, CEB, Ananda Gunasekara told The Sunday Leader that there would be an increase in electricity tariffs by 3.8% come November 1.

However, Gunasekara pointed out that since the increase would be quite minimal, it would not make a difference when compared with the cost incurred for the generation of a unit.

He further noted that the CEB is running at a loss amounting to about Rs. 800 million per month.

Removing subsidies?

The government has also hinted at removing the subsidy on diesel completely to be on par with international prices, stating that every country has been affected by the global scenario.

Be that as it may, although the Ceylon Petroleum Corporation (CPC) is being subsidised by the Treasury, the institution is still running at a huge loss.

The CPC at present is incurring a loss of Rs. 750 million per month.

According to Chairman, CPC, Jaliya Medagama, CPC is yet to receive its dues from public sector enterprises and the dues from CEB alone amount to Rs. 1.3 billion.

Medagama also noted that the CPC was still being subsidised even with the recent price revision - Rs. 2 for every litre of petrol and by Rs. 8-9 for diesel.

However, the highest subsidy is for kerosene - nearly Rs. 20 per litre.

Speaking of the proposal made by the PBOA for the government to remove VAT on diesel in order to reduce diesel prices, Medagama said it would be one way of addressing the issue.

The PBOA last week requested the government to reduce diesel prices by taking off VAT in order to eliminate the necessity for a further bus fare hike.

Medagama noted that it is an issue, which the government would have to look into.

When asked how long CPC would be subsidised, Medagama noted that the Treasury has indicated to CPC the difficulty in continuing with the subsidy thereby granting permission for a price revision.

Govt. expenditure

However, although the fuel subsidy has been rectified to an extent, the increase in the fertiliser subsidy by Rs. 300 is expected to cost the Treasury an added Rs. 900 million till the end of the year.

Under the new pricing formula, a 50 Kg bag of fertiliser would cost Rs. 1050.

The government's action to bring down the escalating rice prices by importing rice from Pakistan and India would also add to the pressure on the state coffers.

Apart from the subsidies, the state also has to cough out funds for Samurdhi, as well as the graduate employment scheme and also make provision in the forthcoming budget for the promised "impressive" salary hike to the public sector.

Although aimed at easing the burden of the rising cost of living, if the "impressive" salary hike is not reflected in the country's productivity on the whole, Sri Lanka would yet again face an economic quagmire.

Under these circumstances, while money from state coffers have been pulled out to settle subsidy bills and other welfare measures, the masses are yet to receive any form of tangible relief.

It is however interesting to note that all these have been allowed to pass the government, which before assuming power and soon after pledged that consumers would be protected from global market prices, while the Janatha Vimukthi Peramuna (JVP) - the key coalition partner of the UPFA - pledged to remove the "world market plug." (See box)

Since of late, these same politicians have called for the masses to bear "part of the costs" as the money saved as a result could then be utilised for development activities.

JVP's Agriculture Minister Anura Dissanayake recently stated that the consumers are suffering due to the rising fuel and transport prices, adding that the masses have been burdened with a heavy load as a result.

However, he blamed the present situation on the country's market economy.

The JVP, since of late has been voicing its disapproval over the present subsidy scheme, and has requested for a change. (See box)

The Central Bank last week released the second quarter report for 2004.

Slower growth in 2Q

The Central Bank has stated that in the second quarter of 2004, Gross Domestic Product (GDP) grew, in real terms, by 5.2% over the corresponding quarter of the previous year. This is a continuation of the growth momentum that began in the second half of 2002, although the growth in the second quarter of 2004 was lower than the growth recorded in the corresponding quarter of the previous year, 5.6%, and in the first quarter of 2004, 6.2%. This deceleration was mostly due to the deceleration in factory industry, particularly for the export market, in this quarter and the negative impact of the drought in certain districts that affected the 2003/2004 Maha season agricultural production as well as hydro power generation. Nevertheless, the growth in the first half of 2004, at 5.7%, just exceeded the first half growth in 2003 at 5.6%. Based on the first half performance, and taking account of the impact of the drought on Yala agricultural production, as well as the increase in fuel prices on all economic sectors in the second half of the year, GDP growth for the year as a whole is projected in the range of 5 - 5.5%.

Inflation increases

According to the Monetary Policy Review for the month of September released by the Central Bank, the point to point growth in broad money (M2b) was 17.6% in July, while reserve money expanded by 19%. The main causes for the growth in money supply have been the higher credit expansion to the private sector and the public sector. The board has also noted the excessive growth in public sector credit, largely arising out of subsidies given on imported commodities such as petroleum products, wheat flour, and other related goods and services.

The board was of the view that the present issues can be addressed by phasing out subsidies, particularly by revising domestic petroleum prices in line with international prices and that such a move would support interest rate and exchange rate stability.

The report further states that consumer price inflation as measured by all price indices continued its upward trend.  The 12 month moving average of the Colombo Consumers' Price Index (CCPI) rose from 4.3% in July 2004 to 4.9% in August.  A similar trend was observed in the Sri Lanka Consumers' Price Index (SLCPI), which rose from 1.7% in June to 2.3% in July. Faster rates of increase of 10.5% and 8.3% were observed in the point to point changes of the CCPI and SLCPI, respectively.  The upward pressure on prices is partly due to supply side factors, such as the continued increase in oil prices and lower agricultural output as a result of the drought. 

On the external front, the trade deficit has widened in June as import expenditure has grown faster than exports, largely due to the continued rise in the international price of crude oil and in other commodity prices. The report states that international prices of other major consumer good imports, such as wheat flour, sugar and milk powder have increased by 23%, 16% and 6%, respectively, so far in 2004. Lower compensating inflows to the services, and capital and financial accounts have resulted in a deficit in the overall balance of payments.

Official reserves decline

The developments in the external sector have increased the pressure and volatility in the foreign exchange market. According to the Board's report, although the Central Bank intervened in the foreign exchange market to reduce the excessive volatility in the exchange rate, the rupee depreciated by 6.2% vis-…-vis the US dollar during the year to August 2004.  During this period, the rupee also depreciated against the Sterling pound (7%), the Japanese yen (3.9%), the euro (2.3%) and the Indian rupee (4.8%). Reflecting these currency movements the 24 currency nominal effective exchange rate (NEER, 1999=100) depreciated by 5.1%, while the 24 currency real effective exchange rate (REER, 1999=100) depreciated by 2.3% by end August 2004. 

Gross official foreign reserves have declined from US dollars 2,329 million (equivalent to 4.2 months of imports) at end 2003 to US dollars 1,953 million (3.2 months of imports) at end July 2004 due to the intervention of the Central Bank in the foreign exchange market and foreign debt service payments.  The total foreign reserves of the country have declined from US dollars 3,218 million (5.8 months of imports) to US dollars 3,058 million (5.0 months of imports) at end July 2004.

A never-ending struggle 

By Marianne David 

For the man on the street, the Central Bank's weekly economic data and indicators do not mean a thing.

Their fears revolve around the increasing cost of living and how they are going to make ends meet if the desperate situation they are already in, worsens.

Caught up in a terrifying vortex, where food, electricity and water bills, fuel, school fees and tuition fees for children, etc. - the endless list of expenses - are constantly on their minds, consumers are being pressed on all sides.

There seems to be no relief for the people who are already struggling to make ends meet, even when it comes to purchasing essential consumer items.

Paying more

While Central Bank data lists prices for consumer items - and these prices are reflected similarly in some supermarkets - most of these prices are way below the actual amount the general public pays for the same items.

With the increases in travel fares, fuel, consumer items and other essential items, day-to-day living is turning out to be a constant struggle.

This week, according to Central Bank indicators, some of the vegetables prices listed per kilo were: pumpkin - Rs. 20, beans - Rs. 60, carrots - Rs. 40, tomatoes - Rs. 25.

However, consumers buying vegetables from wayside stalls were charged Rs. 5 to Rs. 10 more for these items and when it all adds up, the burden on the consumer is almost unbearable.

The majority of families in Sri Lanka have only one or two breadwinners and most often, among the dependents, also have children of school-going age to support, and for them the increasing cost of living is a nightmare.

Most of them say they have seen an increase of about Rs. 2,000 to Rs. 3,000 in the monthly amount they spend on consumer items over the last few months.

"I buy the same list of items and what cost Rs. 3,000 in January, cost me Rs. 5,000 last month and I dread to think of what the amount will be this month," said Rukshan Subasinghe, a computer operator. Rukshan is the sole wage earner in his family and his wife and young son are dependent on him for all their needs.

Anura's story is on the same lines - the only exception is he has two young children to feed, and a lot of money is spent on milk food, which is an absolute necessity.

"We can't bear the price hikes any more. As it is, I have to buy about three milk packets a week and even the price of milk food has gone up. We need around Rs. 8,000 a month for food, including milk and I spend Rs. 40 a day for bus fare alone. With the bus fare hikes as well, the costs are unbearable," he said.

The increasing cost of living is surely a nightmare - and for the majority of the people, for whom making ends meet is a battle that is fought on a daily basis, the continuing price hikes seem endless.

"There is no end to this," says Nimal, a three-wheeler driver. "People say we charge too much but we have no choice now. Everything is going up in price. We spend about Rs. 2,000 more on food now than we did six months ago."

The prices that have risen continually and drastically, according to consumers, are those of sugar, rice and dhal.

According to a boutique owner, his boutique buys a kilo of dhal at Rs. 78 and sells it at Rs. 82. In some places a kilo of dhal is sold for up to Rs. 88. A kilo of sugar costs Rs. 40 and the price of rice has reached an all-time high.

Increasing prices

According to Central Bank indicators, a kilo of samba rice is now Rs. 50 and kekulu, Rs. 45. Six months ago, in March, according to the same indicators, samba cost Rs. 38 and kekulu, Rs. 34.

Going by the Central Bank indicators alone, prices in almost all consumer items showed an increase in April over the previous month, except for kekulu rice and Balaya fish, which saw a decrease of Rs. 2 each and tomatoes which decreased from Rs. 34 to Rs. 25.

Other items however showed a drastic increase: beans increased from Rs. 32 to Rs. 60, carrots from Rs. 44 to Rs. 50, potatoes from Rs. 56 to Rs. 65, big onions from Rs. 35 to Rs. 40.

By September, according to Central bank indicators, the vegetable prices were as follows: pumpkin - Rs. 20, snake gourd - Rs. 20, ash plantain - Rs. 35, beans - Rs. 58, carrots - Rs. 34, tomatoes - Rs. 20, potatoes -Rs. 60, big onions - Rs. 50, dried chilies - Rs. 140.

The cost of eggs has also increased from Rs. 3.72 in August to Rs. 5.40 in September.

The cost of fish increased drastically in May. Going by Central Bank indicators, in March, fish was priced as follows per kilo: Kelawalla - Rs. 180, Salaya - Rs. 58 and Paraw - Rs. 178.

By April the prices were: Kelawalla - Rs. 190, Salaya - Rs. 60 and Paraw - Rs. 190. In May the prices were: Kelawalla - Rs. 252, Salaya - Rs. 73 and Paraw - Rs. 242.

The prices for the week ending September 24 were: Kelawalla - Rs. 222, Salaya - Rs. 50, Balaya - Rs. 206 and Paraw - Rs. 206.

Increases in travel fare, electricity and fuel prices among others are adding to the burden people are forced to endure, and 'what next?' seems to be the question on the minds of the people, who are so far braving the storm in the only way they can - by cutting down and tightening belts.

Struggling to survive

"We are finding it a struggle to survive, things are so expensive. My daughter is doing her advanced level examination now so a lot of money has to be set aside for tuition fees as well. I used to spend Rs. 11 on bus fare, then it became 12 and soon it will be 13," said Malini, who works for a small salary and is the sole breadwinner in her family.

Meat products have not been cheap to purchase either, with the price of chicken going up to Rs. 130 for 500 grammes in some areas.

"We can't afford to buy fish and most Buddhists do not eat beef so we are limited to chicken most of the time. With the continuing price increases, even vegetables prices are on the rise. We earn barely enough to live and if this situation continues, I don't know what the people are going to do," said Roshan Jayasena, a three-wheeler driver.

Gamini Fernando and his family of four, from Galle, used to eat rice for lunch and dinner but now he says they are having bread for dinner because it is cheaper.

"Everything is increasing in price. The cheapest loaf of bread is Rs. 13 in the shop near my place and we buy that. In our area there has been only a slight increase in vegetables but flour and rice is expensive. I also have to pay van fees for my children and their tuition fees, etc. Bus fares are also high and will increase even more soon. We are finding it very hard to manage."

According to Rohana, a vegetable seller in Ratmalana, the prices of vegetables have increased only slightly but they are forced to charge more since they too are affected badly by the increasing cost of living.

"We don't even sell some vegetables now because of the high price, and just bring a few that we are sure will sell instead," he said.

Says Karunathilleke, who sells vegetables from the back of a lorry in Wellawatte junction, "It's not easy to live on the money I earn selling vegetables but I am somehow going on so far."

And the never-ending cycle continues - the sellers charge more in order to survive and meet other increasing expenses and the people keep cutting down on expenses as much as they possibly can.

Tightening of belts may be good and fine but there is a limit to how much one can cut down on and when it comes to essential items, regardless of the price, one has no choice but to purchase these items.