Central Bankers in major economies, particularly the US Federal Reserve and the European Central Bank, always knew that it was extremely risky when they embarked upon quantitative easing. Such a policy has never been tested on such a large scale. However, the Central Bankers have adopted the position that the cost of a prolonged slump across the advanced world would be greater than the threat of inflating unsustainable bubbles in the world’s financial markets. This judgment is about to be put to the test.
Pathfinder Foundation focuses on economic and developmental issues. On the face of it, this topic seems to be largely political. However, in practice, it has significant direct and indirect economic ramifications.
The recent decision to authorize the development of Integrated Tourism Resorts, including gaming, has stirred up much controversy. It is an issue that needs to be examined in a hard headed and rational manner, devoid of emotion, hypocrisy and opportunism. Gambling stirs up passionate, moral indignation which does not resonate with the reality of life in Sri Lanka.
Burdening the Poor or Cost Reflective Pricing?
The Pathfinder Foundation (PF), since its inception has consistently argued in favour of cost reflective pricing for every State Owned Enterprise (SOE). This is based on the premise that losses of SOEs are invariably a burden on the public, particularly the poor and vulnerable, in one way or the other. In practice, the public are equivalent to the shareholders of these enterprises. The losses incurred by SOEs have eventually to be borne by the public in the form of higher taxes and/or interest rates. As 80% of Government revenue is collected from regressive indirect taxes, the pain is borne disproportionately by the poor.
The Pathfinder Foundation (PF) welcomes the efforts currently underway to address the chronic losses incurred by the CEB; and congratulates the Public Utilities Commission of Sri Lanka (PUCSL) and other stakeholders for conducting a professional Public Hearing. PUCSL is also to be commended for its proactive stance in cutting the costs put forward by the CEB to the tune of Rs. 40 billion.