A pump named Wayne. Wayne Octain.
I was on MTV’s Good Morning Sri Lanka with Prashan De Visser this morning. It was about rising petrol prices and the dropping Rupee. I must admit that I am also confused by this, for more details I’d recommend Jack Point. I think the general narrative, however, breaks down like this.
The government needed to borrow money (from the IMF). To borrow, it has to show that it can balance the books. That means raising revenue AND cutting spending (ideally). The government just raised revenue by increasing petrol prices but they haven’t really cut spending (ie, on Mihin Lanka, which wastes insane amounts of fuel). By allowing the Rupee to float naturally they don’t have to spend billions artificially buying it and changing the price. This means that Sri Lankan goods are cheaper (boosting exports) but imports are more expensive now, and we import a lot. Everything from tinned fish to iPads to cars will cost more.
To some degree this stuff had to happen, especially the Rupee depreciation. However, the problem I’m seeing is that average people are tightening their belts and the government isn’t. Obvious wastes of money like Mihin continue, and less obvious ones also (presumably). We still have a jumbo cabinet, Ministers with retinues of cars and accompanying petrol allowances, and I don’t see them cutting back on that.
Ideally, balancing the books should involve increasing revenue and cutting spending. Alternately, increasing revenue and investing in transparent projects with predictable returns. Right now they’re raising revenue on the backs of the people, and expecting us to carry their corruption and waste as well. Something’s got to give.
Well translated for the economically impaired. I wish more people would make an effort to learn a little more economics to understand how we are being f¥¢%£¡ in every way possible by this administration.
It’ll be too late when the majority comes to their true senses and would take another 6 years of hard cut backs by a new government to put right.. by which time the people would be fed up of the low spending government and want to elect a shouting opposition once more. Without any economic knowledge Lankans are doomed to be stuck in a useless cycle of moderate to terrible governments ruling over its flock.
That is a fair summary. Of course there is the govt version of events for the poor masses who don’t understand economics.
WTF?
http://www.news.lk/news/sri-lanka/1516-minimal-impact-from-fuel-price-hike-central-bank-governor
The man hasn’t bought his own groceries or paid for his own electricity in quite some time. We have been paying for that, so you have to excuse Nivard.
It’s the Maha harvest season, food should get considerably cheaper the next few months
Dodo, paddy farmers are packing up the Maha harvest and carrying it out tothe main road because the government isn’t buying it from the fields. The Polonnaruwa oligarchs are grabbing it up at low prices. Dont believe they’ll distribute it later at low prices too.
There’ll be a 25% electricity surcharge in the coming months. They’ve already started unofficial powercuts too.
LP gas has gone up in price and may go up further. The diesel hike has increased bus fares and school van fees already. The price of every other commodity that requires transportation like groceries and building materials will go up. Cost of services supplied by folk who’s costs increase will also rise.
Won’t impact a decadent bachelor like you and that’s quite alright, but it certainly will, families with kids. That’s the reality. Luckily for you and the government, most of the above are not counted in the basket of goods used to calculate the COL.So your claim will be difficult to refute staistically. I only wish the government wasn’t being so blatantly decadent in their spending, at least for appearances sake.
Dodo – perhaps you should think of writing an economics column for the Daily News :)
check the vegetable prices shammi. Most of them are down by 40-50%. hopefully this will make life a little easier for people.
Because you’re my favourite avatar and all Dodo, I wont point out that man does not live by vegetable alone, and I see that even you, are not decadent enough to be completely unaware that there’s a need to make things easier for people.