Pathfinder Economic Flash

The Growth Deficit: The Competitiveness/Productivity Challenge

Beyond a Remittance Dependent Economy

Stalling Growth

The growth momentum in the Sri Lankan economy has slowed down significantly. It is important to examine its performance subsequent to the necessary stabilization measures introduced in Feb/March 2012 to address the overheating of the economy.

Pathfinder Economic Flash

The Electricity Price Increase: A Necessary Evil but Must Stay on Course

Commendable Action

The government is to be commended for its highly courageous decision to adjust electricity prices towards cost reflectivity.

Pathfinder Economic Flash

Fallow Land is Worth Nothing: Let us Incentivise Realizing its Value

Land is an emotional issue in all countries. It is particularly so in a relatively small country like Sri Lanka.

Pathfinder Economic Flash

Public Concerns Grow Regarding the Economy

The latest LMD/Nielsen Business Confidence Survey shows that the percentage of people concerned about the economy more than doubled in 4^th quarter 2012.

Pathfinder Economic Flash

Sri Lankan Airlines: Can it Afford to Fly?

Fundamentally Unviable Business Model

From its very inception there have been serious concerns about the financial viability of the national carrier (Air Lanka/Sri Lankan Airlines).

Pathfinder Economic Flash

Colossal Loss, Unjustifiable Subsidy and Massive Opportunity Costs…

The Pathfinder Foundation (PF) learnt that the Ceylon Electricity Board (CEB) has projected massive losses for one year – 2013 – as shown below:

Pathfinder Economic Flash

CPC and CEB: Without Reforms We Will All Tumble Down

The Case for Going beyond Monopoly and Duopoly

The Pathfinder Foundation (PF) welcomes the recent adjustment in fuel prices and the anticipated further reforms in the power and energy sector. It has advocated institutional changes, competitive industry structures and PPPs as in the case of the telecom sector. The massive accumulated losses of these two organizations, amounting to about Rs. 400 billion, have seriously undermined not only the health of the state banks but ultimately public finances as a whole.

Pathfinder Economic Flash

Bite the Bullet Early or Take the Bullet Later: The Importance of a Timely IMF Arrangement

Temporary Separation not Divorce

The announcement that negotiations between the Government of Sri Lanka (GoSL) and the International Monetary Fund (IMF) have been halted raises a number of concerns. It has been indicated that a major issue discussed related to budgetary support through an IMF Extended Fund Facility (EFF) Arrangement. Reports have also stated that the amount being negotiated was $1.5 billion over three years.

Pathfinder Economic Flash

Worrying Fall in Government Revenue

There has been a sharp fall in government revenue in 2012. Revenue collection is likely to have declined to as low as 11% of GDP. This is significantly less than the 14% - 15% that has been recorded in previous years and compares very unfavourably with 17% - 18% of GDP that is the mean for countries at Sri Lanka’s level of development (lower-middle-income country). It also seems to imply that growth has been less than the 6.5% officially recorded.

Pathfinder Economic Flash

The CEB: Continuing as a Monster or becoming a Catalyst for Development

Shock waves were felt throughout the power sector, especially by the Ceylon Electricity Board (CEB), during the first week of 2013. This was due to the Ceylon Petroleum Corporation’s (CPC) decision to raise the price of Furnace Oil supplied for the thermal generation of electricity. It is reported that CEB, which has already incurred losses of Rs. 65 billion in 2012, will add a further Rs. 90 billion in 2013 due to this measure and other losses. Total losses for 2012 & 2013 would therefore, amount to Rs. 155 billion. Furthermore, a few years ago accumulated losses amounting to Rs. 30 billion had to be absorbed by the government to make the CEB balance sheet look viable.