Countrywide strike on July 10
Govt. beating war drums to drown
criticism
Rs.97 bn of Rs.102 bn revenue
earned through taxes
Govt. attempting to suppress
trade union action
By Mandana Ismail Abeywickrema
Unable to bear the rapidly increasing cost
of living any further, the working community
is now gearing for an islandwide agitation
campaign next month to call for better
salaries.
The rising cost of living as a result of
high inflation has drastically reduced the
purchasing power of the people. "The
government has ensured that everything has
increased except the salaries of the
workers," the workers claim.
The working masses point out that the cost
of living index that was 4304 in January
2006 has increased to 6527 by April 2008.
This 2223 point increase in the cost of
living index, workers say, is reality and
cannot be changed by the government by
simply changing the index and introducing a
new one that understates the figure.
The unbearable increase in the cost of
living and the government's inability to
resolve the crisis have now compelled the
people to take to the streets calling for an
increase in salaries, to address the
existing salary anomalies in the public
sector and also refrain from slashing the
fertiliser subsidy offered to farmers.
War drums
The government is beating the war drums to
drown all criticism, and to make their
voices heard over the din the JVP has
announced the date for an island wide
general strike, which they say would be held
from time to time throughout the next month
if the government fails to address issues
brought on by the high cost of living and
also increase the salaries of public,
private and estate sector workers by a
minimum of Rs.5,000.
The JVP affiliated National Trade Union
Centre (NTUC) comprising of some 400 public,
private and estate sector trade unions has
said it would launch a countrywide, one-day
token strike on July 10 demanding a minimum
salary increase of Rs.5,000 in line with the
rising cost of living.
JVP Parliamentarian and NTUC President, K.D.
Lalkantha said the union was compelled to
demand a minimum increase of Rs.5,000, which
is an increase from the Rs.3,000 demanded
during last year's budget due to the rapid
increase in prices of essential goods.
He said according to statistics, a family of
five needed at least Rs.31,000 a month to
procure day to day essentials.
Lalkantha added that the government should
also implement the pledge made to pay
Rs.2.50 to each increasing cost of living
index point, which the government later
scrapped by making a flat payment of Rs.375.
"Although we do not agree with the payment
of Rs.2.50, in principle, we want it paid,
as it was a pledge made by the government.
This government agreed to pay Rs.2.50 for an
index point when in 1980 the unions called
for a payment of Rs.5 for an index point,"
Lalkantha said.
No response
"Though we demanded the salary increase from
June 1 and wrote a detailed letter to
President Mahinda Rajapakse, the government
has not responded to it. We have now decided
to hold a one-day, countrywide strike on
July 10 as the first step to win our
demands," he said.
He also said that NTUC did not want to
launch a lightning strike given the
prevailing situation in the country but
decided on the token strike in order to
avoid any possible disruption of the war
effort.
However, he said that if the government
decided to declare July 10 as a public
holiday in the manner in which they
responded to the teachers' sick note
campaign on June 11 and 12, the general
strike would be launched the following day.
"If the government decides to grant a
holiday to the public sector on July 10,
then we will launch the strike the following
day. If the government still fails to grant
the demands even after the strike we will
launch continuous strikes countrywide," he
said.
Responding to the charge that trade union
action would hinder the government's war
effort, Lalkantha said the government is
attempting to suppress trade union action
and deny workers of their rights by using
this excuse.
War fought on public holidays
He said that although Sundays and Poya days
were public holidays, the war is fought on
such days as well and an island wide strike
for one day would therefore not have an
impact on the war.
"We were reluctant to take any trade union
action earlier due to the prevailing
security situation in the country but now
the cost of living situation has gone from
bad to worse and we cannot keep quiet any
longer. Government institutions do not
function on public holidays or Sundays. The
war will continue uninterrupted even if we
go on strike," he said.
In addition to the salary increment of
Rs.5,000 for public and private sector
employees, NTUC has also demanded an
increase in the daily wages of estate
workers. They have called for the daily wage
which is Rs.290 to be increased to Rs.500.
Amidst the drastic increase in the cost of
living index since 2006, the government has
also decided to increase transport fares by
a massive margin.
"Bus fares have increased by 27.2% while
train fares were increased by over 100% and
people find these fares unbearably high.
Therefore we have been compelled to add a
new demand to our campaign, which is that
train fares be reduced as the fares have
been increased by 100, 200 and 400 percent
adding a further burden to the ordinary
people," Lalkantha said.
Invitation
NTUC has already extended an open invitation
to other trade unions to extend their
support to the planned general strike. The
first discussion in this regard will be held
tomorrow (23) by NTUC.
The government has said that it is unable to
grant the requested wage increase.
A senior government minister has said that a
wage hike under the present circumstances
would push the country into spiral inflation
due to wage spiral inflation.
Consumer Affairs Minister Bandula
Gunawardena has said that increasing
salaries would cause wage spiral inflation.
JVP Parliamentarian and Head, Inter Company
Employees Union (ICEU), Wasantha
Samarasinghe responding to the government's
statement that a wage increase would push
the country into a wage spiral inflation
scenario, said the problem lay in wrong
economic policies and mismanagement of
funds.
He told The Sunday Leader that wage spiral
inflation was connected with productivity,
an area that the government has completely
ignored.
"If the government is speaking of spending
money only to pay wages then there is a
problem, but if it is done in line with
increased productivity, then there won't be
any wage spiral inflation," he said.
Productivity?
Samarasinghe questioned what measures had
been taken by the government to increase
productivity. "All that the government has
done is minimise productivity and waste
money. Money is being printed to maintain a
large number of ministers and to invest in
wasteful endeavours like Mihin Air that has
so far incurred a loss of Rs.3.2 billion,"
he said.
According to Samarasinghe, if the government
took measures to reduce the number of
ministers and stop corruption and wastage
of state funds, there would not be any
economic issues.
He said that the wrong policies followed by
the government had brought on the present
economic issues and denying the people a
wage hike in line with the rising cost of
living would not be the answer to the
problem.
"The
government has two options. That is to
either increase the salaries of the working
people or else provide subsidies and ensure
that goods and services are provided at a
reasonable price," Samarasinghe said.
He also noted that the government has also
burdened the people with heavy taxes. "There
is no relief for the people. Apart from the
high cost of living, the people also have to
pay high taxes," he said.
Samarasinghe explained that 95% of the
government's revenue was collected through
taxes.
Revenue through taxes
"Of the Rs.102 billion earned as revenue in
the first few months, Rs.97 billion has been
earned through taxes. This is a government
that even collects taxes from beggars on the
streets," he said.
With the first round of discussion on the
July 10 strike scheduled for tomorrow (23),
trade unions representing different
political views have expressed an interest
in extending their support to the strike.
The government's failure to address the
demands forwarded by the unions would result
in the country experiencing constant island
wide strikes during the month of July.
|
Estate sector demands wage increase
The estate sector that contributes
nearly 15% to the country's economy has
been one of the most deprived sectors.
Over 400,000 workers are employed in the
sector while the total amount of people
dependent on the sector amounts to a
massive 1.3 million, says Head, JVP
affiliated All Ceylon Estate Workers'
Union (ACEWU) and Parliamentarian
Ramalingam Chandrasekar.
Chandrasekar told The Sunday Leader that
the estate sector workers are the most
deprived lot among the country's working
masses.
Given the steep increase in the cost of
living, Chandrasekar says that estate
workers have been compelled to resort to
trade union action to win their demand
of a wage hike. The demand forwarded by
the estate workers is to increase their
daily wage to a minimum of Rs. 500.
He explained that the basic salary of an
estate worker was Rs.200 per day while
it is increased to Rs. 290 per day if
the employee works for 25 days. "Most
often, they don't get Rs.290," he said.
However, the daily wage of an estate
worker is accounted at Rs. 290.
Last increase
Chandrasekar noted that the last wage
hike granted to the estate workers was
in 2006 according to an agreement signed
between the estate workers and the
owners and the agreement initially due
to be renewed this year has been
postponed to next year.
"The agreement was to revise the
salaries every two years. Since it was
first done in 2006, it was to be taken
up for review this year. However, the
President, estate owners and the workers
held a discussion and decided to put off
the revision process till next year.
Therefore, the estate workers would not
receive the intended wage increase," he
said.
However, the rising cost of living has
had an adverse impact on the already
poverty stricken community.
Black market
According to Chandrasekar, most of the
trading in the estate sector happens
under the black market system.
Therefore, the poor estate workers are
forced to purchase goods and services at
a higher price. "Wheat flour that is
marked at Rs.77 is sold around Rs. 90
and the same applies to rice and other
essential items. The cheap rice that is
sold in those areas are of low quality
and cannot be consumed by the people,"
he said.
"The estate community is the poorest of
the poor. Over 60% of the children and
pregnant mothers suffer from
malnutrition. In a country that boasts a
93% literacy level, the literacy level
in the estate sector is around 50%,"
Chandrasekar said.
Child workers
He said statistics have also revealed
that of the 450,000 odd child workers in
the country, 90% hailed from estate
sector families. "The unbearable level
of poverty has compelled parents to send
their children to work at a very young
age. These people live under dire
conditions. They live in a 8X8 room
without electricity and proper sanitary
facilities," he said.
Chandrasekar charged that none of the
governments that have ruled the country
have addressed the issues faced by the
estate sector workers. He said that
President Mahinda Rajapakse in his
Mahinda Chinthana manifesto had many
pledges that are yet to be fulfilled.
"Rajapakse even promised to appoint a
committee to look into the grievances of
the estate sector workers, but none of
that has happened," he said.
Therefore, in order to receive a wage
increase in line with the rising cost of
living, Chandrasekar said the ACEWU,
which is a member of the National Trade
Union Centre (NTUC) would resort to
severe trade union action and support
the planned one day general strike next
month.
Trade union action
"Since neither the government nor the
estate owners have responded to our
demand, we are compelled to take action
to win the demand. Now most of the
government ministers try to wash their
hands off the estate sector wage issue
by saying it is not up to them, but
during elections these people are given
various promises by these very same
politicians," he added.
Private sector also demands wage
increase
The private sector claims that the 6.5
million work force in the private sector
has not recorded a positive wage
increase despite the rising cost of
living.
The Inter Company Employees Union (ICEU)
says that the public sector employees
receive a minimum salary of Rs.11,730
and the total salary amounts to Rs.
14,500 with the cost of living
allowance, while the minimum salary of
the private sector stands at Rs. 5,000.
Contribution
ICEU also says that while 75% of the
country's work force is employed in the
private sector, their contribution to
the national economy accounts for more
than 80%. The union has further claimed
that the government has not taken any
steps to increase private sector
salaries.
"Bus fares have increased by 25-30%,
train fares by 100%-400% and a kilo of a
vegetable has increased to over Rs. 100,
but the only thing that has not
increased is the salaries of the private
sector," ICEU said.
Monthly requirement
According to ICEU, although the
government has taken steps to change the
cost of living index to understate
statistics, when the value of 2002
stands at 100 points and the market
basket calculated at Rs.17,995, a unit
is priced at Rs. 179.95. Therefore, a
family of four requires Rs.35, 710 on a
monthly basis as at end May.
ICEU has extended its support to NTUC's
strike action planned for July 10 to
demand a wage hike for the private
sector. |
Borrowing spree
continues
|
P. B. Jayasundera and
Ranjith Siyambalapitiya |
By Mandana Ismail Abeywickrema
Amidst unstable economic conditions and
warnings from credit rating agencies that
the country was overly dependent on debt,
the Government of Sri Lanka is continuing
with its borrowing spree.
The Central Bank recently announced that the
country had raised US$ 150 million through a
syndicate loan arranged by Standard
Chartered Bank.
The bank was awarded the deal on March 7. In
April, Fitch Ratings downgraded Sri Lanka's
sovereign ratings by a notch to B+ due to
weak budgets, high inflation and heavy
borrowing from foreign lenders at commercial
rates. Standard & Poor's has given Sri Lanka
a B+ rating with a 'negative outlook.'
A day after the Central Bank announcement
was made on the US$150 million loan, it was
reported that the country had also sought
investors to buy US$ 200 million worth of
bonds.
New instrument
According to the Central Bank, the new
securities, known as Sri Lanka Development
Bonds, will be offered in maturities ranging
from two to five years to local and foreign
investors.
It has been said that the proceeds from the
offer will be used for development projects
that would cover the health, road, airport,
education and energy sectors.
The latest move to raise money is yet
another borrowing spree by a government that
is engaged in heavy defence expenditure. It
is predicted that defence expenditure could
rise to Rs. 200 billion in 2008.
The government was expected to spend a sum
of Rs. 166 billion, which is Rs. 456 million
(US$ 4 million) per day on defence and
public security this year, which it has been
pointed out is a huge amount for a lower
middle-income country.
Over the budget
However, going by the earlier defence
spending trend since 2006, the government's
estimation of Rs. 166 billion for this year
would undoubtedly be much higher by year
end, especially after the events that have
taken place, where for all intents and
purposes it has been made clear by both
parties full scale war is the only agenda.
According to analysts, if the additional
costs such as pensions and disability
expenditure on servicemen, and installment
payments for military procurements are also
taken into consideration, the defence
expenditure for 2008 will exceed Rs. 200
billion.
Apart from the defence expenditure, the
country is also battling skyrocketing
inflation, which is at almost 27% according
to a new index introduced to by the
government. The new index was put in place
of the previous Colombo Consumers' Price
Index that recorded a nearly 30% inflation
rate in April.
It is amidst all these unsavory conditions
that the government has continued with
debt-raising measures to fund domestic
projects despite a recent warning by the
International Monetary Fund (IMF) that it
could be headed for a foreign debt crisis.
However, analysts feel that there is no need
for the government to raise money in the
foreign market given the fact that the
country had almost US$ 4.7 billion committed
and undisbursed funds for infrastructure
projects. Ninety percent of the external
borrowings carry a rate of 1.5% interest.
Better terms
"The issue is if there really is a necessity
to borrow money three and half times more
than the 1.5% rate offered to us. The money
we already have is for a period of 25-30
years with a grace period of 10 years,"
analysts point out.
What is also ironic is that while the
Rajapakse government borrows money for what
many experts say is recurrent expenditure
including salaries, the principal US$ 500
million obtained earlier will have to be
repaid in one installment in a period of
five years most likely by another
government.
The government has also said that it would
pay only the interest for five years. The
interest will have to be paid once every six
months and would come to a massive US$ 200
million.
Such is the repayment scheme of the initial
US$ 500 million raised last year. Now with
the recent borrowings added on, the
country's loan burden would increase
significantly with much pressure being
placed on the already exhausted state
coffers.
|
Trade deficit widens to US$ 2 billion
The country's trade deficit has widened
to more than US$ 2 billion in the first
four months of the year with oil imports
erasing export gains.
According to Central Bank statistics,
imports from January to April have
increased to US$ 4.53 billion, up from
US$ 3.29 billion in the corresponding
period last year.
Exports have seen a marginal growth from
US$ 2.23 billion to US$ 2.48 billion.
The bank has further said that despite
the trade balance widening 92.4% in the
first four months, the overall balance
of payments have recorded a surplus of
US$ 320 million dollars.
However, the manner in which the overall
balance of payments improved has not
been stated. Official sources have
reportedly said that the better than
expected foreign remittances from Sri
Lankans migrant workers had seen a big
inflow of foreign exchange into the
country.
In May, the Central Bank said
remittances increased by 23.5% to US$
752.2 million for the three months to
March this year.
The country purchased oil worth US$ 1.11
billion in the first four months of this
year, which is a 76.3% increase from US$
632 million spent in the corresponding
period last year.
Nothing to worry says Minister
Finance and Revenue Minister Ranjith
Siyambalapitiya says that there is no
reason to worry about the foreign
borrowings as the country has
successfully managed to reduce its debt
percentage as against GDP.
He said that the country's debt, which
stood at 105% against GDP in 2003 has
now been brought down to less than 90%.
According to Siyambalapitiya, the debt
is expected to be reduced to 87% by the
end of the year.
He said that there was no reason to
worry about the borrowings as the
country paid a similar amount back as
debt repayment.
"There would not be any negative impact
on the economy," Siyambalapitiya said,
adding that the government had borrowed
money solely for development work and
not for consumption purposes.
BoC bad loans at Rs. 217 billion in '06
Parliament was informed last week that
the total loan outstanding of Bank of
Ceylon (BoC) has increased from Rs. 61.3
billion in 1996 to Rs. 217 billion in
2006.
Leader of the House, Minister Nimal
Siripala De Silva disclosed the details
to the House in response to an oral
questioned raised by UNP Parliamentarian
Ravi Karunanayake.
The Minister has said the outstanding
loans have been increasing every year
except in 2002 and 2003. Accordingly,
the amount has reduced to Rs. 114.6
billion in 2002 compared to Rs. 142.5
billion in 2001 while it has further
declined to Rs. 107.1 billion in 2003.
The outstanding loans have however
started to increase from 2004 and has
increased to Rs. 125 billion from Rs.
107 billion in the previous year.
The period of the loans vary from one to
180 months. The records of all loans are
maintained until they are fully settled
and for a further period of six months
to one year, depending on the type of
security. Thereafter, the security such
as title deeds, registration of motor
vehicles, insurance policies, deposit
certificates etc. are released to the
customers and other documents are
destroyed as per the bank's archiving
policy.
"Hence, at any given time the bank
maintains the records of outstanding
loans only," the Minister has said.
The loans that have been considered as
bad debts have also been accumulating
from 1996 to 2006. Accordingly, the
amount has increased from Rs 10,727
million in 1996 to Rs 13,603 million in
2006. The total loans written off have
been Rs 117 million in 1996 and Rs 70
million in 2003. |
