AirTel troubles

Apparently Airtel, scheduled to start operations in Sri Lanka this year, have run into some trouble. I like Airtel, it's my operator of choice whenever I'm in India, I've got good memories with it. It worked well for me, and i did do some traveling across states in remote moutanes areas. The Advert above with the two boys playing football is probably my favorite ad on TV.

I was looking forward to the increased competition, I think Air-tel could have given dialog run for their money. I think they have already woken up dialog from a monopoly lethargy and if Airtel do some of the things they do in India, they can lure in customers. Airtel as a brand will have instant recognition from anyone has table, so they have a good start. I don't think I will switch, changing numbers is a bitch unless Air-tel can give me a remarkably better deal.

As for the troubles, a few weeks back in a flight back from Delhi I met a guy from Chandigarh, who's flying to Colombo. He turned out to be a senior telecoms engineer at Airtel, flown down to SL to help with the operations here. I asked him what's taking Airtel so long to set up here, he told me they faced two main problems. one, was permissions issues - Setting up towers and that sort of thing needed all sorts of clearances from the ministry of defense, TRC, and the bureaucracy is taking time. The other, he told me is lack of telecoms engineers, He said latter is going to be a bigger problem in the long-term.

This is probably why dialog have invested in heavily University of Moratuwa, they desperately need the people. All of this is a problem of too much government. in 2006, Lirneasia, a Colombo-based policy research agency concluded the Telecom regulatory environment in Sri Lanka one of the worse in the region and heading in the wrong direction (PDF link). The impact of national security concerns since would only have worsen the situation.

It's heartening however, that the sector has grown tremendously despite having too much regulation. Often times, technology itself is a liberator, government bureaucracies cannot keep up with the dynamism of changing technologies and that's why telecoms 'work' for most people, when fixed-lines become a limiting factor, the industry comes up with CDMA, so on, before the bureaucrats can get their head around that, there'll be another technology.

It just beats me why when simple logic would tell you (and the data backs up the claim) that having barriers to entry, too much of regulation is just bad for business and bad for consumers, yet we are still stuck in this old paradigm of "license-permit" economic (mis)management. sigh.

S.B, the Higher Ed. Reformer?

Former Sri Lankan Minister, and the national organizer of the main opposition UNP, S.B. Dissanayake seems to 'get it' when it comes to Higher Education reform. Here's S.B. from an Interview with the Colombo Post :

During 1960 to 70, our main five universities were included in the world’s best 500 universities. There were only two universities from India among the 500. Today ours are not even in the first 1000 universities. But even today we have a huge demand in this sector. When our students lose the opportunity of getting admission to our Medical College by a few marks, they go to medical colleges in Nepal which is a donation to the army, or to the Bangladesh Medical College for higher studies.

Last year 150,000 students were eligible for university admission, 17,000 were selected. About 25,000 leave this country every year. If they are permitted to pay and study here, then our universities need not depend on government funds to build libraries, to purchase books or for research, they can earn by themselves. In the world today there aren’t any universities that depend on their governments. Those universities earn by themselves. If we improve and market these universities to Asian countries we may get down students from China and India and make this a good service country. [link]

I've so far met no reasonable person who's against higher education reform. Yes, there are few insecure undergraduates in local universities who are against it, but they don't quite make
cut as 'reasonable' in my book.

I've chatted about this with various folks, including government ministers and MPs about the need for reform. All of them get it. They know Higher ed. in this country, sucks, that's why most of the ministerial offspring (including His Excellency's sons) are studying abroad.

The great tragedy is the incentives are arranged such that it doesn't make sense for any politician to invest political capital in higher ed. reform and disturb the apple cart. The ruling party don't want to give any more reasons for the JVP to mobilize its left-wing student unions, there are no other pressure groups at work - including the Colombo civil society, who's primarily obsessed with peace.

It's a tragedy because higher ed. reform is essentially a middle-class project. Most people in the affluent class, if I'm to use that word, don't usually have their children studying in Sri Lanka at the undergraduate level. It's the middle to lower income earners who will benefit the most from reform with increased access with lower costs to undergraduate degrees.

How do you reform? I'm no higher ed. expert, but I can offer some clues. One option as I've said before, is to grant the university autonomy as to it's administration and make them accredition bodies for potential private colleges, so you go to College Xyz, but get your degree from University of Colombo, the university sets the papers, the curriculum maybe even offer access to expensive labs and that sort of thing. This is what kind of happens in India, and Sri Lankan colleges like APIIT or ANC except they are affiliated to foreign universities. It would bring in competition in the sector, bring down costs, increase access to higher education, diversify options beyond just IT and business in the private sector and can potential bring in more revenue for the University which they can invest in paying their lectures, scholarships or improving their facilities. You can keep some (or all) of the universities in government hands privatize the rest and authorize setting up universities (not just colleges) by the private sector.

Another possibility is to privatize all universities, except for maybe one and offer educational vouchers on merit-basis , the students can reimburse the voucher at any college of his/her choosing and can add-value to it if he/she is able to afford it.

I think all these, especially a variation of the first option is entirely possible and even politically feasible, if more people start advocating it.

Previously, What's free in free education?

Unfair Trade

Adam Smith Institute has it's latest report Unfair Trade, Out today. From the ASI Blog:

Fairtrade is a nice idea, and it is great that so many consumers want to help the poor in the developing world. But it is important that we ask whether Fairtrade really helps. After all, 'Fairtrade' does not mean anyone who gives better terms to third-world farmers. It is a particular brand, which competes with other ethical schemes and charities for people's money.

There are a number of inconvenient truths about Fairtrade. Indeed, on closer inspection it may not be that fair at all. It only offers a very small number of farmers a higher fixed price for their goods. Given the way markets work, these higher prices come at the expense of many other farmers, who – unable to qualify for Fairtrade certification – are left even worse off.

More importantly, the Fairtrade scheme does not aid economic development. It sustains uncompetitive farmers on their land, holding back diversification, mechanization and moves up the value chain. In doing so it denies future generations the chance of a better life. [link]

Download the Report here

Raponomics

Greg Mankiw's 10 principles of economics, The Rap Version :


What can I say, just Awesome. I don't know about #7, but WTF. For anyone feeling really bored, here's the original version:

1. People face tradeoffs
2. The cost of something is what you give up to get it
3. Rational people think at the margin
4. People respond to incentives
5. Trade can make everyone better off
6. Markets are usually a good way to organize economic activity
7. Governments can sometimes improve market outcomes
8. A country’s standard of living depends on its ability to produce goods and services
9. Prices rise when the government prints too much money
10. Society faces a short-run tradeoff between inflation and unemployment.

Al-flation

From Bloomberg.com:

U.S. plans to replace 15 percent of gasoline consumption with crop-based fuels including ethanol are already leading to some unintended consequences as food prices and fertilizer costs increase.

About 33 percent of U.S. corn will be used for fuel during the next decade, up from 11 percent in 2002, the Agriculture Department estimates. Corn rose 20 percent to a record on the Chicago Board of Trade since Dec. 19, the day President George W. Bush signed a law requiring a fivefold jump in renewable fuels by 2022.

[..]The energy bill requires the U.S. to use 36 billion gallons of renewable fuels by 2022, of which about 15 billion gallons may come from corn-based ethanol. The nation's current production capacity is about 8.06 billion gallons.

[..]Researchers led by Timothy Searchinger at Princeton University said their study showed greenhouse-gas emissions will rise with ethanol demand. U.S. farmers will use more land for fuel, forcing poorer countries to cut down rainforests and use other undeveloped land for farms, the study said. [link]

Ok ok, so it's called Agflation - the increase in price of food due as a result of agricultural products used for alternative energy resource. No, I'm not trying to blame all this on Al Gore, but as I've said before on this blog, I think the most adverse and immediate effects of climate change will be from bad policy rather than actual climate effects.

This is what happens when you meddle in the market (subsidies, mandates, etc.), you end up with something that nobody really wants at the tax payer's expense. Ethanol is bad for the planet, bad for the U.S. economy and bad for the rest of us. (Hell, even Krugman agrees)

I'd hold Gore somewhat responsible - after all he won a Nobel Price for talking about climate change - it's him and his alarmist faithfuls who demanded that something is done about climate change immediately, pushing the political climate in that direction. Unfortunately, what's to be done about climate change is not so clear, so you end up meddling in the market and do stuff like this.

Let's get this clear - the market is more likely to create an efficient, viable alternative energy source than any government bureaucrat. What's required is some trust in human ingenuity and markets, without jumping the gun and doing something stupid with unintended consequences.

Terror, Architecture and Animal Rights

WTF story of the day comes from the the Daily Mirror (Fight terror, build monuments of art) :

Sri Lankan Premier Ratnasiri Wickramanayaka has asserted that they would fight the war on terrorism in the country while noting the architectural feats of the decades gone by. [link]

Meanwhile in other news,

People for the Ethical Treatment of Animals (PETA) said in a letter dated Feb. 15 to rebel leader Velupillai Prabhakaran that "the explosive device that was set off near the zoo's bird enclosures terrified many animals at the zoo."

In the letter, PETA president Ingrid E. Newkirk pleaded with Prabhakaran "to leave animals out of this conflict."

People saddened by the attack had inundated PETA with messages, Newkirk said.
[from AP]

Pass the Rotti on the Left hand side has more on the response of the LTTE and the Government.

Why Not Obama Part 2

Ouch:


That's got to hurt. I Rest my case.

[via India Uncut]

“The Cost of Free Trade”

Recently the Island carried an article with the same title where the writer (a Kath Noble) goes on to explain the implications of the Indo-Lanka Free Trade Agreement (FTA). Now, I have seen worse articles on trade and economics in the Sri Lankan press, but it’s precisely the more reasonable guise of the article which makes it's errors more plausible.

Do read it in its entirety. The following are the relevant excerpts where I think she (or he) has got it wrong.

[..]Trade between the two countries [India and Sri Lanka] has increased at least four-fold, and it is now worth well over $2 billion. India had cut its tariffs on Sri Lankan goods by 2003, and Sri Lanka is due to do away with all remaining taxes on Indian imports during 2008. Free trade has triumphed, apparently.
Unfortunately, the story isn’t so simple. Taking a closer look at what has happened in practice would prompt even the most ardent believer to question the undoubtedly beguiling theory of free trade

First of all, what pass these days as Free Trade Agreements, are not really “Free Trade” agreements. If they were, then that would require only a couple of pages long document with a place to sign. FTAs usually run into the hundreds of papers, precisely because the FTAs come with all sort of conditions and clauses on which products can be imported, the tariff levels, etc. They should be more accurately called Freer/Managed trade agreements. This makes them poor benchmarks to test the “theory of Free trade”, which can be done better by looking at say, domestic trade within a country where tariffs and other restrictions do not exist. There’s absolutely nothing special about International Trade that’s also not true about domestic trade, except for the fact that people have imposed barriers on International trade.

Now, I’ve met and seen many economists (ardent free-market kind) who think of FTAs, WTO, etc as being disruptive to real free trade. I think they have a point, which everyone should hear more often, but I support FTAs because they are the only politically feasible way of getting to a point where there are no (or virtually no) restrictions on trade.

The writer continues..

[..] Free trade is supposed to be about each country focusing on the goods that it can produce most efficiently, and then selling them to others and using the proceeds to buy whatever else it needs on a level playing field. However, this is clearly not the reality. [..]

Clearly not the reality? I wonder why. Her article certainly doesn’t offer a clue.

Perhaps she’s confused with what comparative advantage is, which according to some Economists is the most misunderstood concept in economics, here’s Brad Delong’s explanation:

“"Comparative advantage" holds that we should export not those commodities that we can make more efficiently than people in other countries can make them, but those commodities that we can make most efficiently relative to the efficiency with which we make the average good or service.” (Do read the whole thing)

But one has to keep in mind when we talk about trade between “two countries” we are really talking about people in those countries and comparative advantage is very much a reality. For example, if I’m the world’s greatest cricketer and also the world’s finest clerk. The law of comparative advantage says that I should play my Cricket instead of being a clerk although I do both better than anyone else on the planet. I do what I do best relative to whatever else I do and not just do everything I can do better than others. It works much the same way for aggregates of people...like countries.

The Writer then goes into a lengthy explanation of fate of the vegetable oil industry, supposedly Sri Lanka’s major export under the FTA:

[..]Sri Lanka has been importing crude palm oil from Malaysia, putting it through a rather simple chemical process, and then exporting the end result as hydrogenated vegetable oil to India. Indian products have been undercut only because the Sri Lankan government has been imposing very little duty on crude palm oil, while India has been taxing such imports heavily.

[..]Indian manufacturers were understandably upset[..]and they began pressing the Indian government to protect them. India decided to forget the free trade agreement and simply put a stop to Sri Lankan imports. Factories stood idle for months while negotiations were underway to find a compromise solution, and everybody was relieved when the Indian government agreed to restart the trade with a fixed ceiling [..].

In fact, the dispute didn’t end there. The Indian government faced further demands from its industrialists, and it finally decided to reduce its import tariff on crude palm oil at the end of 2007. Sri Lankan products rather abruptly became no cheaper than those made in India.
[..]Sri Lankan workers are hardly going to celebrate having temporarily stolen a few jobs from their probably no better off Indian counterparts. Sri Lankan leaders will have to start worrying about the trade deficit again.

There are indeed great risks in export-dependant industries. Shift in policy can have major repercussions, especially on industries operating on negotiated policy advantages alone created by the particular trade agreement. I know a few economists who are very critical of export-led development. They criticize the strategy of “East Asian tigers” and china as being prone to bubbles and sudden shocks when the demand for their goods suddenly drops.

I’m puzzled though as to why “Sri Lankan leaders have to start worrying about the trade deficit”. Trade deficits (like the good people at Cafe Hayek often points out) are no longer a relevant statistic to “worry about”. I for example, have an increasing trade deficit with the Island Newspaper. I buy their product without ever having sold them anything. But to suggest that I’m somehow loosing out from this transaction is quite silly.

The writer then goes on to explain the plight of the pepper farmers in Kerala. The infamous problem of Farmer suicides, etc. She suggests that “Sri Lanka should be ashamed” if more and more pepper is exported to India.

Now as Nitin Pai and others have pointed out, there are major structural issues in India (some of which are common to Sri Lanka as well) which leads to the unfortunate plight Indian farmer’s face. It’s a sector where the market has not being allowed to properly operate. There are price controls, subsidies, lack of property rights, government interventions in the credit market and interventions and overall perverse incentives created by government policy (The increase of compensation for widows of suicides for example) Blaming this situation on the Free Trade Agreement is hardly prudent.

The writer concludes with some cautionary advice to India’s Minister of Commerce of the upcoming Comprehensive Economic Partnership which is bound to bring closer trade-ties, saying there is a cost to free trade.

Nobody denies there is a “cost” to trade, when two people trade a third can loose out. This is true for domestic trade as well as international, what free trade does is allows producers to increase their market potential and consumers to increase their range of choices by having access to cheaper goods at lower prices. It increases wealth in people and therefore countries. But there will be cost to some people, the writer will have to realize you can’t have the cake and eat it too.

Related Links : The Island Article, Paul Krugman on comparative advantage, Cris Lingle's lecture, Jagdish Bhagwati and more at Deaned on free trade.

Inflation and Booze

This is what a Sri Lankan Government official had to say about not including alcohol and tobacco from the new consumer price index:

Sri Lanka's statistics officials said alcohol and tobacco had been dropped from the index because of a government policy against the use of intoxicants known as 'matherter thither.'

The head of price indices at the statistics office, D C A Gunewardene said each country may have to make their own decision and the dropped category was small.

"There is a policy called 'matherter thither', so we did not include it," Gunewardene said. [link]

Sigh. I need a drink..

Why not Obama

Lots of people like Barack Obama. He’s now the frontrunner for the democratic nomination, and if he does get it, He’ll be hard to beat for McCain. He’s articulate, charismatic and black. This appeals to a lot of people, not just in the U.S. but it seems around the world and here in Sri Lanka. The 20-somethings I meet often are captivated by his persona, excited about his message of “Hope” and “Change” and optimistic about the prospect of an Obama Presidency.

Obama has been celebrated as a Liberal Reagan – the great communicator of the American Left (which btw, is not so ‘left’ compared to say, Sri Lanka). People have written essays claiming he’s a left-libertarian, a Civil-Libertarian, a principled guy, a generation’s hope, yada yada. He has lot of independents supporting him, and even some conservatives. That’s all great. What’s going for Obama is that he’s the new kid on the block, so he doesn’t have a lot of baggage. Couple this with the kind of romance that people have developed for him, it makes people want to cherry-pick facts and project him as whoever they want to. As others have noted, Obama as of now is whatever people want him to be. Infatuation can do that to people.

There was a time not so long ago I was idealistic enough for this kind of blind romance, but those days are gone. This romance is unhealthy, because it stops you from actually examining the issues.

Let’s take foreign policy. Now I oppose the Iraq war, and I agree with the fundamentals of his withdrawal plan. But Obama’s position on the Iraq isn’t necessarily principled as some would like it to be, it’s just populist. His call for a troop withdrawal in Iraq is not coming from a principled non-interventionist position, based on his assessment of ground realities or from a fundamental change in the way U.S. approaches foreign policy, it’s coming from an assessment of voter sentiment.

My biggest beef with Obama of course, is with his economics, I’m not going to talk much about specific U.S. domestic policy issues, but it’s safe to say that Obama offers no “change” from the standard liberal democrat rhetoric, except Obama’s whole game is based on rhetoric.

Where Obama suck is trade, his “fair trade” plan would not only have free-traders worried (that’s basically most economists on the planet – including Obama’s own advisors.) but his “Fair Trade” plan to protect American jobs and Open foreign markets will have Oxfam-type- Do-gooder Fair Traders scratching their heads. Obama wants to talk to Chaves, but wants to renegotiate NAFTA. In other words he wants to talk to their oil-dictator while screwing over the people of Latin America.

Having civil liberties for Americans doesn’t really matter for the rest of us, but trade and foreign policy, those are heavy impact areas. It’s time some of us stop being swept away by Obama speeches and really look into what policies Obama’s advocating. If you agree – if you think protecting American jobs at our cost is a good thing – fine enough. But otherwise, it’s time to stop being in love and grow up.

End of Chávez

It seems, like others who try to follow his ideology in a democratic set up, Hugo Chávez's run of popularity is slowly coming to an end. According to The Economist, during the last 5 years of the Chávez presidency, the proportion of households below the poverty line increased by 11 percent, despite the increased "social spending". It's a sad day for Sri Lankan quasi-socialists, who used to sing his praises. Micheal Moynihan has more to say at Reason.

Competing currencies: putting the Central Bank out of business.

The Inflation in Sri Lanka is now at about 20%, and the Central Bank expects the figures to remain at 16% to 20% at least for the first half of 2008. It’s getting so unprecedented now, that it’s receiving some attention from international monetary experts. Over in the U.S. too they have problems with their currencies, the Dollar is loosing value against other currencies at record levels.

So the question is when certain currencies under performs say the SL Rupee or the Zimbabwean Dollar, why wouldn’t the market choose other currency instead? (Economists call this dollarization – replacing a countries currency with currency from another country – e.g. US Dollars) While the Central Bank may have the monopoly authority to print money in Sri Lanka, what stops the market from choosing foreign currencies? Why wouldn’t for example, retailers in Colombo declare, they “now accept Euros, Dollars and Pounds for transactions" and consumers follow suit. After all, most retailers support multiple types of credit cards and modes of payment, why not different currencies? It’s a question I put to FussBudget of LBO, who’s possibly one of the few Sri Lankan economists who’s taking the issue of Inflation head on. Here’s his response:

Deane,
Good one ! It is legal tender laws that bar you from accepting for payment or keeping foreign currency with you. You are barred from even keeping dollars with you. These exchange control rules were a little relaxed last year. But still you have to deal in Sri Lanka currency and keeping large quantities of foreign currency is still illegal.

Foreign exchange is subject to exchange control as well as customs laws here, and the govt could not only confiscate them and land you in jail but also fine you 300 percent.

By allowing NRFC accounts Sri Lanka slightly relaxed the monopoly on savings in local currency some time ago.

When people keep dollar notes, keep travellers cheques without changing and NRFC accounts it chips away at the note issuing monopoly of a government. (Notes - reserve money - deposits - M2). The liking for foreign currency and the distrust of the local currency is due to the loose monetary policy of the central bank.

However with tighter monetary policy since 1995, when the Central Bank changed from a pure inflationary money printer to something that at least tried to keep inflation in check we have seen a slight change in the situation and confidence increasing in the local currency.

As you know at one time the US banned citizens from holding gold through legal tender laws.

Deane, your friend Ron Paul is asking for competitive currencies inside the US. In the US though gold is no longer illegal to hold, it is still taxed when traded. This makes it less easy to challenge the dollar monopoly.

At the moment we have a 100 percent reserve backed currency. That means if govt wants, they can dollarize Sri Lanka tomorrow and eliminate high inflation.

While the Euro is obviously the best currency to dollarize to keep inflation as low as possible, for purposes of exports it may be better to dollarize with US dollars to prevent a big shock to the industrial sector.

As you know a currency board is also the same as dollarizing in a practical sense - except that we will have notes of a different colour.

If you followed Yugoslavia, there was dollarization with the German mark, when hyperinflation struck. Then you had the situation of currency boards, Euro union etc.
Here the debate about monetary reform has been muted until now. With Steve Hanke also getting into the picture now the 60 years of deception practised by the central bank on the poor of this country is also getting chipped away. [Link to comment. The Links, emphasis in the quote are mine]

Well, whad’ya know, I’m a criminal. Hopefully none of the custom’s chaps read this blog. I have from recently actually kept some of my savings in foreign currencies instead of Rupees.

I knew there was probably a truck-load of regulation preventing a market-led dollarization from ever happening (in any country, really) but I didn't know the exact provisions in Sri Lanka.

FussBudget’s (who’s real identity I do not know) reference to Ron Paul is an exchange we had before and a few days ago Ron Paul – whom I backed for U.S. president – made a speech in the house floor asking congress to consider the concept of “competing currencies” . Here is a relevant excerpt:

At this country's founding, there was no government controlled national currency. While the Constitution established the Congressional power of minting coins, it was not until 1792 that the US Mint was formally established. In the meantime, Americans made do with foreign silver and gold coins. Even after the Mint's operations got underway, foreign coins continued to circulate within the United States, and did so for several decades.

On the desk in my office I have a sign that says: “Don't steal – the government hates competition.” Indeed, any power a government arrogates to itself, it is loathe to give back to the people. Just as we have gone from a constitutionally-instituted national defense consisting of a limited army and navy bolstered by militias and letters of marque and reprisal, we have moved from a system of competing currencies to a government-instituted banking cartel that monopolizes the issuance of currency. In order to introduce a system of competing currencies, there are three steps that must be taken to produce a legal climate favorable to competition. [link] (Emphasis mine)

None of this will probably happen for a very long time. But I’m glad the debate has started.

Crack Tax

Recently, the Reason's Hit&Run reported that over in Tennessee,U.S. they collect taxes on illegal substances (drugs, moonshine, etc.) apparently the revenue department has vowed they will not share info with the cops as long as the drug dealers pay up taxes. Now if that wasn't WTF enough, The NY Post reports this :

A prominent Democratic Queens assemblyman yesterday warned that Gov. Spitzer's proposed tax on illegal drugs - dubbed the "crack tax" by critics - could unfairly impact the drug dealers themselves.

Assemblyman Jeffrion Aubry told Spitzer Tax Commissioner Robert Megna during a legislative budget hearing that requiring drug users and dealers to pay state sales tax on their illegal stash is an undue burden since they already face fines and possible forfeiture of property and money.

"This component adds another financial hardship on people who don't have a lot of money," Aubry said.

Aubry, chairman of the Assembly Corrections Committee, added that the plan could "create another class of individual who can't escape the process and has to go back out and sell drugs."

Said Megna, "It is not our intent to burden certain portions of the population." [link]

I mean, I couldn't agree more. All drug dealers need our love and protection.

Cochin and Liberty Pt2.

Continued from Part 1..

I finally get to the place I have to be, it turns out to be a Catholic place, where they have space for conferences and stuff. In fact Cochin has a lot of Christianness , the place has been colonized by the Portuguese and the Dutch before the English, the same transition of colonial power that occurred in Sri Lanka. The more I see of Cochin, the more it reminded me of Negombo – the lagoon, the weather, churches, boats and tamed-development.

I was here for a Seminar on Liberty and Society by Centre for Civil Society (CCS), a libertarian-leaning think-tank I’ve come to associate. The seminar was excellent. I highly recommend it to anyone with an interest in public policy. There were a lot of interesting speakers/sessions at the seminar, I’m tempted to blog about most of them, but that seems too laborious. Maybe I’ll write about some later.

Most of the fellows attending the seminar are from Kerala itself, but there were quite a few from other cities like Bangalore and Hyderabad. The people were naturally quite curious there was a chap “all the way from Sri Lanka”. I tried explaining to them that “really, it’s not that far” and that people who flew from Delhi actually came a greater distance. But all that didn’t stick, I had come from a different country and it’s a big deal. Someone asked me whether I took the boat, since Sri Lanka is so close by. I said no and made an Eelam joke.. didn't quite work out.

But coming back to the topic, there were few local Keralites who spoke about the fate of Liberalism in “God’s own country”. One of them was Babu Joseph, a former socialist turned-classical liberal after he joined Swatantra Party from Youth Congress feeling disillusioned by Nehru’s policies and Congress’ nepotism. Joseph was an articulate guy who knew how to use humor to good effect. He went on to talk among other things, about the lack of opportunity in Kerala which drives many enterprising people out of the state.

From the outset, Kerala is an odd place to talk about Liberty. For much of its existence it has been under Communist rule and by looking at the current political alliances competing for power, Keralites have a choice between two left-leaning coalitions. But thankfully there is some liberalization that is taking place, the Cochin Airport I mentioned in the earlier post, is actually run by a Private firm with the partnership of the state. Education (including higher ed.) is provided by private colleges with state university acting as an accreditation body. Some Marxism, this. These are the days I wonder whether Sri Lanka is the more commie country.

Cochin seems to have got everything that Colombo has, except I’d say it’s a lot less vibrant. I didn’t hear of any especially intriguing night life, although I did manage to check out a few nice restaurants. They have a few shopping malls, filled with the usual suspects, the Nike's, McDonald’s, Barista’s. We hung out at this place by the Marine Drive, which is a nice place. Later a few of us hired a boat go see around the Cochin.

Cochin has nice sight-seeing spots, there’s Fort Kochi with the fish market where they do ‘Chinese Fishing’. There’s a church where Vasco da Gama is supposedly buried, there’s a synagogue, an old Palace, Interesting stuff. Going to all this places in a boat makes it more fun, but boats aren’t just for tourists here it’s used as a means of public transport. It bugs me Sri Lanka being an Island and Colombo being a port city we don’t have a ferry service to anywhere. Where ever I’ve been to port cities, the folks there seem to make use of ferries. Just beats me why we can’t. It would personally cut down my daily traveling time by at least 45 minutes. I don’t think it would be that expensive.

The seminar timings didn’t allow me to go out a lot, so there’s probably a side of Cochin I missed. But booze here is too expensive. Apparently the state of Kerala has the highest per capita consumption of Alcohol in India, so the government plays the moral card to increase taxes. This is one of the many similarities Kerala has with Sri Lanka, which includes it’s highest suicide rate, literacy, how people look and even food (if you thought Kavum was something exclusively Sri Lankan, I’ve got news for you).

Cochin was good but my journey isn’t over, so I and a friend of mine took the train in the evening – next-stop Bangalore.

What i want for Valentine's

A USB Rocket launcher!. To take on um.. Terrorists. See it in action Here, Here and Here and if you really love me you could get me one of these helicopter thingies.. to shoot at. Otherwise I'll just have to shoot cats...after i deal with the terrorists.

[via Indiauncut]

Child Soldiers are allowed..

In the Appu Army. Kamone Malli, Kamone!

Photo via Cricinfo, they have the story here.

Cochin and Liberty

It was such a sudden decision to pay a visit, one of those “F-it! I’m going” moments. So I dropped off a few emails, had a Facebook wall-to-wall conversation, picked up my bags and off I went. The b4Ur27 thing from SriLankan is still on, so you can gets a return ticket to Cochin for about 12,000 LKR including Taxes. I was planning returning from elsewhere, so my ticket was a bit more.

After about an hour’s flight I arrived in Cochin sometime in the morning, The Cochin airport is quite nice, having seen the one in Bangalore, (which frankly looks like the fort railway station) I’m pleasantly surprised. They seem to have got everything in order, a nice duty free section, mobile service providers, money exchangers..the works. I approach the money exchange guys and they put on an animated show calling to their booth, it’s as if I entered the Sunday Pola (market), I grin to myself – I’ve arrived in India.

The most depressing thing about traveling to India these days is the exchange rate. The Sri Lankan Rupee is one of the few currencies in the world which is actually falling against the dollar. When I first traveled to India sometime in 2006, I could get 1 INR for about 2.2 LKR. Now I have to give 2.8 LKR to get the same rupee, so every time I spend cash I keep multiplying it by 3, India is no longer a cheap place for Sri Lankans. The cause is of course those morons at the Central Bank print too much money to finance Mahinda’s spending habits; and no, having one of his buddies as the head of the CB doesn’t help either – at least for the rest of us. I’m increasingly of the view that we should abolish the central bank (or radically reform it), more on that later.. some other day.

Anyway, after reminding myself a few impolite details about Mrs. Cabraal(snr) I made my way outside the airport building. I was late for the seminar I was here for and the taxi fare from the AirPort service didn’t sound reasonable so I was looking for an ‘Auto’ (that’s a tuk-tuk for the rest of you) There doesn’t seem to be a whole lot outside, but I manage to catch one autowallah (3-wheeler buggers) roaming around the premises. I tell him the location I want to get to and he breaks into a long monologue in what I presume to be in Malayalam, the local language. I have two options, one is to confess I’m a Sri Lankan, speak to him in English and pay the premium for foreigners.. or speak in my picked-up Hindi and make him think I’m from up north. I go for the latter and to my relief, his Hindi is not that good either. This works to my advantage as I manage negotiate a decent fare, and get in the black and yellow Tuk-tuk.

Soon we are in a slightly bumpy road with a lot of greenery either side, people were right – Kerala is a lot like Sri Lanka. The autowallah tries to pull me into a conversation on what I’m doing in Cochin and where I come from, after trying my best to keep up with the little Hindi I know, I finally confess I’m from Sri Lanka. He asks me whether I know Tamil, I tell him I don’t. He asks me how I know Hindi, I tell him “Bollywood” which is only partially true. Come to think of it, it is rather embarrassing I can understand/utter Hindi better than I can speak Tamil. In my defense, they didn’t teach us Tamil in School, and when they finally figured out they should in about grade 9, I couldn’t be bothered. Hindi on the other hand is naturally closer to Sinhalese, it’s of the same Indo-Aryan roots and we’ve got a lot of common or very similar words and phrases. Plus of course there’s Bollywood and unlike Kollywood- the south Indian version, they make good movies. So that, and the fact that I seem to visit India often and the few English words they use when speaking in Hindi, I can pretty much understand or at the very least get a general idea of what they are talking about when somebody speaks in Hindi. This doesn’t quite work for Tamil.

We approach the city and the Cochin traffic makes me talk less and look around more. The place look like a busy section in the outskirts of Colombo, lots of people, dust, tuk-tuks and at one point I see one bearded politician-bugger dressed in white in front of a picture of a modern train. I could have been home. The only difference seems to be random cut-outs of (I presume to be) Malayalam actors, kind of fat fellows in silly looking pants and sunglasses with fair women. I pass by some communist graffiti and I’m reminded that Kerala is governed CPI(M) and I’m actually in commie country.

The drive is taking about an hour now and I’m fast getting bored when I suddenly spot we are passing the place I’m supposed to get down, I yell Rukoh Rukoh!! (Stop!) .. I’ve made it.

End of Part 1... Continued in Part 2

Saying Good Things about Sri Lanka

seems to be too damn hard.

Steve Hanke on Slaying Sri Lanka's inflation

He argues for a return to a currency board regim . CATO has the article here. Also covered by LBO.