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Wednesday December 7th, 2022

Sri Lanka transport minister says public can force tuk-tuk fare drop

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ECONOMYNEXT – Sri Lankans can force a drop in tuk-tuk fares by refusing to hire threewheelers to reduce demand, Transport Minister Bandula Gunawardena said, a suggestion that tuk drivers say is nonsensical as they stick to their guns despite a reduction in petrol prices.

Speaking at the weekly cabinet press briefing on Wednesday October 26, Minister Gunawardena said when prices are decided by the market, consumers are the ultimate authority in price control.

“Consumers have the power to revise prices based on their consumption. There was a hike in vegetable and fruit prices recently. There was a drop in buyers and, since vendors are unable to keep non-perishable goods for long, the prices came down,” he said.

“Similarly, if the public can’t afford extreme threewheeler fares, they have the right to be informed, to be protective and to make a choice.”

Earlier in the week, President Ranil Wickremesinghe approved a proposal to increase the weekly fuel quota allocated to threewheeler drivers to 10 litres from the current five-litre limit with effect from November 05.

The first phase of the quota increase will commence in the Western province and threewheel drivers will be required to follow a registration process that will commence on November 01.

The All Island Threewheeler Drivers’ Association, however, is refusing to budge.

The association’s chairman Lalith Dharmasena said his union will not reduce tuk taxi fares despite the doubling of the petrol quota. Their demand is for a weekly quota of at least 30 litres.

Though there have been a reduction in tuk fares overall since the height of Sri Lanka’s fuel crisis, due to increased living costs and spare part prices, fares have remained at a significantly higher level despite the recent drop in petrol prices. Consumers complain that many drivers charge them arbitrarily decided fares, while tuks associated with Dharmasena’s association charges 100 to 140 rupees for the first kilometre and 110 to 130 rupees a kilometre from the second kilometre onwards.

Responding to Minister Gunawardena’s remarks, Dharmasena said the government should appoint a fare revision committee instead of distracting from the issue with what he called ‘crazy talk’. (Dharmasena’s actual words are too colourful for publication).

“[Opposition MP] Kumara Welgama in 2013 was the first person to gazette a fare revision committee. In 2017, [then minister] Nimal Siripala de Silva amended this proposal twice and the gazette which was to be implemented in 2013 was reversed in 2017 and there were no fare review committees after that,” said Dharmasena.

“The National Transport Commission is only in charge of private buses. We have been asking for years for the proposal to be accepted but there has been no response,” he added.

Dharmasena said the income of families of commercial threewheeler drivers has reduced since early this year with people reducing the use of threewheelers for transportation due to inflation hitting everyone hard.

Due to the absence of a fare revision committee, he said, different rates can be seen among tuk drivers, driving consumers further away from the service.

“The government should step in and set a rate, but instead they are making obnoxious statements,” said Dharmasena.

Ride-hailing platforms like Uber and PickMe do not have price issues because they have a set rate that people trust, he added.

Dharmasena also claimed that import controls imposed by the government are useless due to the cut paid by local Uber drivers to the Uber headquarters overseas, which he said is an outflow.

“When things go south because of their own decisions, the government tells the public to reduce threewheeler demand. I’d like to see how they win the election this year,” he said.

“If that’s what a leader is supposed to say, then all I have to say is there are no leaders in the country. Since we gained Independence, we haven’t had leaders. We only had rulers. Not everyone is a leader, because even a shepherd is a leader,” he added.  (Colombo/Oct26/2022)

Comments (2)

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  1. Kaley29 says:

    Developing country or not, I don’t see why any safety-faring citizen should go into these over-prized death traps anyway. The rail services do a higher service, but still cannot get paid at least half of what these Tuks earn (not that they should earn Ofc)
    Reduce the number of three wheels and regulate fares. The drivers should be given some other productive job live city farming.

  2. Kithsiri Perera says:

    Is this not the same guy who said that people can survive with just Rs 2000 per month in Sri Lanka.?

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Comments (2)

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Your email address will not be published. Required fields are marked *

  1. Kaley29 says:

    Developing country or not, I don’t see why any safety-faring citizen should go into these over-prized death traps anyway. The rail services do a higher service, but still cannot get paid at least half of what these Tuks earn (not that they should earn Ofc)
    Reduce the number of three wheels and regulate fares. The drivers should be given some other productive job live city farming.

  2. Kithsiri Perera says:

    Is this not the same guy who said that people can survive with just Rs 2000 per month in Sri Lanka.?

Crisis-hit Sri Lanka sees recovery in cruise ship tourism from zero

ECONOMYNEXT – Seventeen cruise ships are scheduled to arrive in Sri Lanka next year with
Queen Mary 2, one of the largest and popular ships, Colombo’s harbor master said, as the island nation is looking for alternative avenues to boost its faltered tourism sector.

The rise is expected to bring thousands of high end tourists with higher spending capacity after two years. The island nation saw a record high 54 ships in 2019, rising from the previous year’s 42, Nimal Silva, Colombo Port Harbor Master said.

“The 2019 was one of the best years and in 2020 there were more than 60 scheduled vessels to
call but with COVID pandemic all hell broke loose,” Silva told EconomyNext.

Fourteen cruise ships are scheduled to call from January-May next year and another three are scheduled to arrive in Colombo in November, when the peak tourism season begins.

Cruise tourism cycle begins in Sri Lanka from October to May with a dip during the monsoon

Sri Lanka welcomed two cruise ships in November after almost two years.

Three ships are scheduled to arrive in December and Azamara Quest, carrying at least 722 tourists, arrived in Colombo on December 3 and is now heading to Hambantota.

On December 18, Le Champion carrying 264 will arrive in Colombo and depart to Mumbai and the third vessel, Silver Spirit will arrive in Colombo on December 23 carrying up to 648 passengers.

There are two scheduled in January, one in February, and four in March next year, according to the harbormaster.

“Next year more ships could schedule, so far these are the confirmed ones now,” he said.

This also generates income for the port and the prices are charged according to the size of the

Silva said the first medium sized-cruise vessel, 229 meters long, generated about 14,000 dollars
for docking in the port for a day.

He said Queen Mary 2, a 325 meter long ship and one of the largest cruise ships in the world, is also
scheduled to call at Colombo in February. It can carry up to 3200 passengers.

Silva said almost all the ships that were scheduled have arrived on the island and therefore, he is
confident all the ships including Queen Mary 2 will arrive in Sri Lanka.

“Only one ship has been canceled thus far. There are no last minute cancellations if there were some they would have informed us by now,” Silva said. (Colombo/Dec07/2022)

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Sri Lanka President says 2015-2019 policy struggle was ‘warfare’

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe said his attempts to reverse the inward-looking protectionist policies and fix state finances during his last term as Prime Minister was opposed both by politicians and business interests.

“In the 4.5 years as prime minister it was an effort to take this economy out in a different direction,” President Wickremesinghe told an economic forum organized by Sri Lanka’s Ceylon Chamber of Commerce.

“We were able to get a surplus in the primary budget. But it was warfare.

“Politicians wanted to protect their power, businessmen wanted to protect their profits and many others wanted to see what the country would provide them free of charge.”

Wickremesinghe was unable to bring private investment to the port under apparent internal political opposition. Relations with President Maithripala Sirisena also soured and he appointed his own economic advisors.

Meanwhile Wickremesinghe’s free trade agenda was hit by monetary instability as the central bank printed money under flexible inflation targeting and triggered forex shortages which were followed by trade controls.


Sri Lanka controls imports in ‘Nixon-shock’ move to protect soft-pegged rupee

Sri Lanka President calls to expand Nixon shock as rupee falls

Wickremesinghe’s ‘Yahapalana’ administration also went on a spending spree called ‘100-day program’ in 2015 triggering a currency crisis in 2015/2016 as the central bank printed money to suppress rates.

The central bank however had already started injecting liquidity and losing reserves (by terminating term repo deals) from the fourth quarter of 2014 as domestic credit recovered from a 2012 currency crisis before his administration came to power.

The rupee fell from 131 to 152 and stabilization policies led to an output shock. The International Monetary Fund then taught the agency which had already depreciated the currency from 4.70 to 152 to the dollars seeking bailouts 16 times, how to calculate an output target.

Under Finance Minister Mangala Samaraweera taxes were raised and budget were fixed in 2018 to bring deficits back to pre-2015 levels, though state spending went up from 17 to around 20 percent of GDP under the spendthrift ‘revenue based fiscal consolidation’ where cost cutting was dropped.

The central bank then printed money by purchasing bonds from banks to target the yield curve, jettisoning a bills only policy established by ex-Central Bank Governor A S Jayewardena, through term reverse repo and overnight injections taking the rupee from 151 to 162 to the US dollar.

The central bank also created money by entering into a swap with the Treasury in 2018, a type of strategy used by speculators to bring down East Asian pegs putting, further pressure on the currency from around July 2018 onwards.


What went wrong; Sri Lanka’s illiberal economics and unsound money : Bellwether

Stabilization policies then led to another output shock. As forex shortages came Sri Lanka resorted to heavy external borrowing as it was unable to settle maturing loans with domestic borrowings.

After two currency crises and output shocks, macro-economists of the new administration cut taxes saying there was a ‘persistent output gap’ and printed even more money for stimulus (close the output gap). (Colombo/Dec07/2022)

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China calls for joint effort to ease Sri Lanka’s debt burden, no mention of restructure

ECONOMYNEXT — A top Chinese official has expressed hope that countries and multilaterals like the International Monetary Fund (IMF) work with Beijing to play a constructive role in easing Sri Lanka’s debt burden, stopping short of an assurance on debt restructuring.

Chinese Foreign Ministry spokesperson Mao Ning was quoted by international media as saying on Monday December 05 that China attaches high importance to Sri Lanka’s difficulties and challenges.

She was responding to a question on media reports that an IMF team will be in China this week to discuss faster progress on debt restructuring for countries including Sri Lanka, which is negotiating for an IMF bailout.

“On Sri Lanka’s debt issue, I’d like to stress that we support the financial institutions in working out ways with Sri Lanka to properly solve the issue,” said Ning.

“We also hope relevant countries and international financial institutions will work with China and continue to play a constructive role in helping Sri Lanka overcome the current difficulties, ease its debt burden and realise sustainable development,” she added.

She said China has long-standing sound cooperation with the IMF and other international economic and financial institutions.

The spokesperson avoided any mention of debt restructuring, a prerequisite for the IMF extended fund facility (EFF).

Nearly a fifth of Sri Lanka’s public external debt is held by China, according to one calculation. The emerging superpower has been generous in Sri Lanka’s time of need, extending much needed assistance in the form of rice, medicine and other commodities.

The latest arrival in the Colombo port from China was 2 billion Sri Lankan rupees worth of essential medicines and medical supplies, delivered on Tuesday.

However, critics say China is doing everything but what Sri Lanka really needs: agreeing to restructure its outstanding debt.

At least one Sri Lankan opposition MP has demanded that China agree to a restructure.


Sri Lanka debt restructuring: opposition MP warns of “China go home” protests

Tamil National Alliance (TNA) legislator Shanakiyan Rasamanickam, who had been on the warpath with Beijing over an apparent lethargy in helping the crisis-hit island nation restructure its debt, recently warned of a “China, go home” protest campaign similar to the “Gota, go home” protests that unseated the country’s powerful former president in July.

The MP told parliament last Friday December 02 that Sri Lanka owes 7.4 billion dollars to China, a nearly 20-trillion dollar economy, and if the latter was was a true friend, it would agree to either write off this debt or at least help restructure it.

Colombo has been vague at best on the status of ongoing restructure talks with Sri Lanka’s creditors, and opposition lawmakers and others have expressed concern over what seems to be a worrying delay. Rasamanickam and others have claimed that China, Sri Lanka’s largest bilateral creditor, is the reason for the apparent standstill. (Colombo/Dec06/2022)

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