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| Tuesday, 7 December 2004 |
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Cost of Living and the CWE by Dhanapala Weerasekera When the first government under the leadership of Mrs. Bandaranaike was formed in 1960 and early steps were taken to work on a people friendly policy, the first reaction to it by a section of the wholesale importers of food and essentials was to gang up together and establish a traders mafia which successfully created a powerful "black market" in monopoly imports and distribution both as a means of earning high profits as well as to support the then opposition to obstruct and bring down the government by raising prices of essential goods specially food items and medicines.
T. B. Illangaratna as the Minister of Trade in his wisdom established the Cooperative Wholesale Establishment as a well planned an effective counter to the "black market" and a very effective means of controlling the rising cost of living and as a buffer against the import trade mafia. After strengthening the main establishment, he went ahead opening C.W.E. branches in every major town and covering all electorates. And these in turn served the local multi-purpose cooperative societies thereby not only making food and essential stocks easily available to these societies but also to the private traders in the area. This system was a very successful and powerful weapon against the blackmarket. With the backing of the powerful business circles which were hit by the C.W.E system the then opposition commenced a campaign of vilification against Mr. Illangaratna making foul and false allegations against him and his officials and as is to be expected a certain amount of corruption also set in with the black market and powerful opponents bribing a few officials and a few of the staff in the retail branches getting involved in small scale black marketing in connivance with the local private trade. Despite these minor problems the C.W.E. system definitely developed to be the most powerful and effective means of keeping prices of essential goods down and was very popular with the masses. The network of C.W.E branches and the multi purpose cooperatives also served as a buyer of local produce from the villages. Flying Squad Mr. Illangaratna rather than blaming others and crying over difficulties caused by the usual corruption which is inherent in this country since the time of independence, established a well planned Flying Squad directly under him with powers to do visits and surprise checks with or without public complaints against the C.W.E branches and societies. I am aware of the great success of this system and a study of this could be useful in many government institutions and departments. Such an institution by whatever name is used should be under the Ministry of Justice or a separate empowered department or authority. When the globalisation policy of the J. R. Jayewardene regime took over one of its first targets was the destruction of the C.W.E system and closing down the hundreds of C.W.E branches in the electorates and the outstation towns to fulfil their pledges to the powerful black marketers, some of the private sector and connected politicoes. Privatisation With the policy of privatisation of a part of the C.W.E and handing over the widespread network of branch C.W.E retail outlets to the private sector the final blow was struck and today these branches serve as outlets for produce of the private investors and with the condition insisted on by the private investors for C.W.E itself is debarred from doing general retail sales. The general public unaware of the conditions laid down in the M.O.U and the fact that the economic collapse of the C.W.E, keep blaming the main C.W.E its board and the present government for the failures of the C.W.E. The deliberate policy of destroying the C.W.E and the large scale corruption during the past has resulted in the C.W.E getting into very serious debt to the banks as well as to the suppliers. The debts to banks go into several thousand million rupees while the debts to suppliers exceeds six hundred million. In addition to this problem, with the private retail trade monopoly handed over to the private investors, the main C.W. E is faced with the financial problem of paying over seven hundred and fifty employees with hardly any proactive work for them to do. The Board of Directors and even the Ministry have no say at all in the affairs of the privatised retail outlets and all they receive is the blame by people who are unaware of the true situation. Remedial action The C.W.E is, in my opinion, the only effective means of keeping the cost of living at least under some control specially in the essential suppliers. There was a move to buy back the shares of portion of the C.W.E. privatised and I understand that they are prepared to sell back their interests at the original amounts paid by them. As for the other debts it is known that the C.W.E owns very valuable idle assets including lands and buildings all over the country including high value areas like Nuwara Eliya and along the southern coast. One block of valuable land extends over ten acres. The sale of a part of these idle assets will bring enough money to pay off a major portion of the debts. If this is not done someday when the C.W.E has to be completely closed down the buyers will benefit to the tune of billions. Once these matters are sorted out, the former retail and wholesale branches should be reopened in all major towns and these under the complete control of the Ministry of Trade and the Government will definitely serve as the main control over rising prices and also serve to give employment to thousands. I fail to understand why this possibility is not even being considered by the Government. As for wholesale imports, the C.W.E can and should come to an understanding with the State banks and come into the import of essential food and other items with some system like the controlled release of goods from the port. This is already done by other importers including vehicles and private wholesale imports. Instead of only blaming the high cost of fuel imports and the falling value of the rupee, the Government should at least consider this proposal as today's rising cost of living will otherwise be a continuing obstruction to the well intentioned people friendly development plans of the Government and the desire to win over or even keep together the loyalty and support of the masses. |
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