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Let’s win the battle, and the war

12 Apr 2020

It is inevitable that when a government focuses all its attention and resources on a critical issue, other areas that need attention tend to get neglected. This seems to be the case with regard to the farmers who are lamenting their predicament in not being able to sell their harvest on the one hand and consumers in the rest of the country lamenting the shortage of their daily staples on the other, the combination of which has led to bitterness and frustration all round. Meanwhile, the skyrocketing prices as a result of this situation has added fuel to the fire with the average consumer having to make some hard choices in already difficult times. The curfew in place, coupled with the shutting down of economic centres in favour of a phone and web-based system, although introduced with good intentions to prevent the spread of Covid-19, has not been effective in getting across the produce to the consumers, thus causing widespread disruptions to the supply chain, earning theire of both farmers and consumers alike. The frustration is palpable. With the traditional Sinhala and Tamil New Year around the corner, farmers plant their crops in anticipation of good returns around this time. According to farmers, this year has seen a bumper crop of fruits and vegetables due to the favourable weather conditions, but this harvest is still either rotting in the fields or in storerooms due to the absence of buyers while consumers continue to be fleeced. Given the current situation, it is not too late even at this eleventh hour for the Government to intervene and buy the produce from farmers and distribute it to markets across the country using state resources. The forces that have done an excellent job in controlling the virus and who now have expertise in maintaining good hygiene standards, could be used for this purpose until such time things return to normal. The situation with regard to paddy however is different. The majority of rice farmers have already harvested their fields and sold their crops to middlemen who instead of feeding them to the mills are hoarding stocks to create an artificial shortage and thereby profit more from higher prices. It is in order to pre-empt this situation that the Government last week declared the operation of rice mills as an essential service and followed it up by imposing price controls on the selling price of the more widely consumed types of rice. The Government should keep in mind that after three weeks of lockdown, financial resources are running thin for most people and more so for the farmers who depend on turning their crops into cash. After all, the New Year which dawns tomorrow is all about the farmers. The long lines witnessed outside pawning shops whenever the curfews have been lifted, the protests by villagers demanding government handouts, and long queues to obtain relief already provided by the Government are a stark reminder of the ground realities. One way out of the logistical issue is to use trains for the transportation of rice, fruits, and vegetables as done very effectively in the past. It has been estimated that one train load of cargo is equivalent to about 40 to 50 lorries, depending on the type of cargo. If 100 lorries transport produce from the main economic centres to the city on a daily basis, this same job can be done using just two or three cargo trains, at a fraction of the cost while also easing traffic on the roads and enjoying greater savings in fuel consumption. At a time when the rupee is rapidly dropping against the dollar, every attempt should be made to curtail expenditure on imports, especially fuel which constitutes the biggest import bill for the Government. Therefore, since all the required infrastructure is already available such as rolling stock and warehouses for storage, the question being asked is why are these resources not being used? In fact, our rail system was originally constructed for the purpose of hauling tea from the up-country estates to the port, and later expanded to cover other agricultural hubs in the north, east, and central regions of the country. The shift to passenger transportation was therefore essentially an afterthought. It is the introduction of the open economy in 1977 and the ensuing flood of motor vehicle imports that resulted in politicians and businessmen getting involved in the goods and passenger transportation business, leading to the slow death of cargo transportation by rail. The Government, which is now preparing for a general election come hell or high water in the originally intended time frame, would do well to not only win the battle against Covid-19 but also the war on Covid-19 before going to the people. As things are, there are many battles yet to be fought on account of the virus, some of which are only beginning and even though the battle against the virus itself may be nearing its end, the war caused by its effect on ordinary life is far from over. Equitable distribution of relief irrespective of party affiliation is likely to be a thorn in the side of the Government due to the polarisation of local politics notwithstanding the all-party co-operation at national level. It is no secret that it is an altogether different story at the grassroots level where the Sri Lanka Podujana Peramuna (SLPP) rules the roost and battlelines have already been drawn. Other battles that need to be overcome include ensuring daily wage earners have access to relief, ensuring farmers have food on the table and consumers are provided their daily staples at reasonable prices, finding alternate jobs for those directly affected by the current crisis such as those employed in tourism and hospitality, bridging the trade deficit caused by the drying up of export income, repaying the already heavy debt burden which has increased overnight by over 10% in rupee terms due to its devaluation against the dollar, and creating employment for thousands in the apparel sector who may lose their jobs, are just some of those battles that need to be focused on if the war on Covid-19 is to be won. According to the Joint Apparel Association Forum, the quarter ending June will see a $ 1.5 billion cut in apparel exports, which amounts to one-fourth of the annual export revenue of the sector, while export orders could contract by as much as 30-40% thereafter. The story continues with the tourism sector which is all but dead and resurrection of which may not take place until well into 2021 due to the global economy plunging into recession, one much greater than the last one in 2008 according to the Economist Intelligence Unit, which predicts global output to be down by 2.5% this year. It is inevitable that Sri Lanka’s top five revenue earners will see a radical change in the short to medium term with tourism, apparel, and foreign remittance earnings, struggling to retain these positions. Given these exceptional circumstances, the Treasury will have an uphill task in containing the budget deficit to around 10% of GDP – double that of last year. With the numbers looking grim and the inevitable rise in inflation, the average Sri Lankan will be in for some serious belt tightening in order to tide over the financial crisis caused by the global pandemic. The Sri Lankan people who have shown their resilience time and time again will no doubt rise to the occasion, but the question is whether their leaders will be equal to the task. This is why a collective effort is called for not only to win the many battles ahead but the war created by Covid-19, in the not too distant future.


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