Mangala against move to recreate serfdom in Sri Lanka with tuk-tuk driver ban

ECONOMYNEXT – Sri Lanka’s Finance Minister Mangala Samaraweera slammed attempts by sections of the elected ruling class to recreate a serfdom of planned occupations by blocking enterprising youth from entering the taxi business with a 35-year age limit.

Sri Lanka’s Transport Ministry, which comes under Minister Nimal Siripala de Silva, is attempting to stop people below the age of 35 from operating three wheelers, because people in high society and factory owners did not have enough manual workers.

Critics say the attempt to recreate a serfdom or the Wedawasam system where people are slotted into fixed jobs based on the requirement of a ruling class, should not be allowed in a modern democracy.

"I fully agree with that," Finance Minister Mangala Samaraweera said. "I believe everyone should have the freedom to engage in a job of their choice.

"I am going to speak against this restriction at this week’s cabinet meeting"

Labour mobility or the freedom of a person to move from job to job on their own volition is a key feature that distinguishes a free society from that of a feudal serfdom and also a Soviet-style planned economy and authoritarianism.

The occupation may have risks and it may even fail, but that is also a fundamental feature that distinguishes a free society from serfdom and slavery where a job is assured but there is no freedom.

In Sri Lanka the public bus service in a shambles due to an allegedly corrupt route licensing system and an overly rigid regulatory system and pricing, which have stifled innovation and adjustments to market needs.

Buses are idle for long periods of the day and there are no peak and off-peak pricing to encourage use. There is also no night pricing, and buses disappear off the roads after 6.30 pm killing any possibility of a strong night economy, unlike in East Asia.

The night economy, such as it is, is made possible by three wheelers.





The free market, (and mercifully unregulated, economic analysts say) taxi system has innovatively filled the gap created by the over-regulated public transport system, with prices held down by productivity gains and rising capital output ratio driven by call centres, ride-sharing apps and smart phones.

In East Asia, especially in countries like Vietnam, similar trends were seen with the motorcycle taxi (Xe Om). With online e-commerce taking off, there is a new revolution in parcel delivery in many countries.

Complaints that there were no manual workers or ‘servants; to do housework were also heard among elites in the 1980s, when the then United National Party under President J R Jayewardene and President Ranasinghe Premadasa started garment factories giving jobs with overtime and weekends off to village girls. Some of the opposition for younger drivers also comes from older existing drivers who do not want to see competition.

"The 35 year old limit was also suggested to me by some taxi driver associations," Samaraweera observed.

The taxi driver association is also playing the game of oligopolists and artisan guilds, trying to limit competition, taking leaf from the book of Government Medical Officers Association which is opposing free trade.

Older taxi drivers have earlier tried to block entry of new supply to the market by keeping younger drivers off parking places. The state has aided and abetted in the anti-market with local government bodies limiting the number of taxis per parking area.

But ride-sharing apps have enabled new three-wheeler owner drivers, especially from rural areas to enter cities and cruise without requiring parking.

Sri Lanka’s three wheelers are so completive, and there is no regulatory premium to arbitrage, that even Uber has found it hard going.

US-based Uber also started a tuk-tuk service last week in a ‘if you can’t beat them, join them strategy.

The willingness of the ruling elites to ban youth from the service sector with no conscience or shame may be a lingering effect of Sri Lanka’s caste system, some analysts say.

With three wheelers, less affluent youth are directly entering the service sector, filling a valuable and growing market need. With rising incomes transport requirements tend to grow.

Operating a three wheeler provides a higher quality of life with the overwhelming majority of them being owner-drivers who are taking the full financial risk and rewards.

Three wheeler owners are able to drop their kids off at school, pick them up, go home and have a siesta, which even business executives who do not have a driver can do.

Three wheeler taxis are also earning foreign exchange, providing vital transport in out-of-the way tourist spots that are now rapidly opening up.

Without a fast growing three wheeler population entire newly created tourist hotspots in remote areas, which are pouring money into the rural economy would go out of business.

Especially in rural areas, the three-wheeler is taking produce to market faster and more importantly, saving lives by taking sick people to hospital. The village three-wheeler is the de facto ambulance.

For every one accident in a three where, several people may be saved by three wheelers, some say. In assessing accidents and fatalities analysts say the number of passenger miles driven by three wheelers have to be taken into account.

Samaraweera said there were complaints that drugs and crime was being committed using three wheelers but it had to tackled through other laws not by limiting entry.

"It is a practice among some people to criticize less-affluent people," Samaraweera said. "When the children of rich people take drugs and get into accidents in BMWs there are no complaints," he pointed out.

Critics say limiting the age of entry into three wheeler ownership and driving to 35 years makes no sense as by that time, people in established occupations who will have acquired certain skills and progressed in their careers will have to change jobs.

In Sri Lanka the highest unemployment is in the 20-24 age group, at 21.2 percent, even with three wheelers, easily disproving claims that the taxi system was creating a shortfall of youth for other occupations.

As incomes rise and the service sector picks up there is also reluctance to engage in so-called 3-D (demanding, dirty, dangerous) jobs, a phenomenon that was also seen in fast growing East Asian nations and in the West.

This will require imports of manual workers to solve. In construction, it is already happening.

Sri Lanka has enacted several laws in the past which prevented social mobility and kept people tied to jobs of the choice of the rulers, including the Paddy Land Act, all of which has made the country lag behind East Asia. (Colombo/Aug20/2018)

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