PERS 2015

Permanent URI for this collectionhttps://ir.lib.pdn.ac.lk/handle/20.500.14444/198

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The edges of capitalism: where shipbreakers meet Gully-Gold miners on the remnants of capitalist mode of production and the vicious conditioning of alienated labour: with special reference to Bangladesh and Sri Lanka
(University of Peradeniya, Sri Lanka, 2015-09-23) Rajapaksha, K.; Jahan, I.
Introduction The ultimate logic of market fundamentalism which advocates, market does allocate resources efficiently among competitive member of the society is simply nothing but ‘poor philosophy’ of ignorance and ambiguity (Marx 1953, Keynes 1962 and Chang 2010). Market is a power mechanism. It separates humans, ignores humanity, stripes empathy and teaches humans how to be extremely narcissistic. What you see as the edge of the capitalist society we are living in – or – what you see as the edges of the existing economic reality is not actually the ‘edge’ of it. What you see as the edge or the end of our political economy of life is absolutely nothing but a mental depiction of fundamentally fetish power arms of market mechanism. Purchasing power is not merely a monetary expression. It contains power – not only certain abilities to perform in the market but also a certain restrictions to perform as well. It is true that purchasing power indicates your identity in the market but at the same time it agitates yourself and reflects your true nature of isolation from other human beings in the society. As an internal organ of the development of capitalism, historically, this alienated nature of human beings flourished and survived the play as consuming and exploitation the very fact, alienated nature of humans under capitalism.1 Thus, this practice has been guiding us to demarcate our own ‘preferred-limits’ in the society – What is my range and what is not? – What do I care and what do I do not care? This study attempts to look beyond the given edges or demarcations of contemporary capitalism with respect to key labour exploitative mechanisms in Bangladesh and Sri Lanka. The focus of this study is to critically examine the historical transformation of capitalist market fundamentalism in Sri Lanka and Bangladesh, through a comparative aspect of analysis; with respect to labour exploitation and conditioning of alienated labour. The study put forward its hypothesis which as, the market fundamentalism (neoliberalism) historically left off– ignored – and inhumanly exploited – a group of people who belong to a certain class structure in the economy while it is heading towards the demarcated destination of capitalist development. The study argues that this ignorant is not something accidental or involuntary, as the theoreticians of market fundamentalism argues that this so called ‘externalities’ can be compensated through the internal mechanisms of market itself. The study tries to synthesise an argument that goes against this fundamentalism; which shows that, markets cannot do anything to take actions against this marginalization process and, more decisively, markets create the effect, markets sustain it and, more dangerously, as an internal mechanism markets need such a class structure to do certain activities and tasks in the process of fulfilling market’s ‘roundaboutness’.
Impact assessment of school infrastructure quality index on school enrollment: a study quantifying gender differentials in Punjab, Pakistan
(University of Peradeniya, Sri Lanka, 2015-09-23) Tanveer, F.; Bajwa, M. U.
Introduction Pakistan is struggling to alleviate poverty and terrorism from the territorial boundaries. In order to obtain fruitful results the government should invest in human capital. Given the recognized role of education as a medium for economic and social development, improving our understanding of the determinants of schooling is vital. This would enable policymakers to adopt policies to improve the allocation of resources, with the aim of increasing school enrollment and lowering the inequality in attainment. Therefore, this study identifies school infrastructure quality index (SIQI) to be an imperative explanatory variable in determining the probability of primary-middle school enrollment. A good school environment directly improves children’s health, school attendance and efficient learning. In that way individuals progress and become capable and productive members of society. Branham (2004) found a positive and significant relation between school enrollment and quality of school facilities. In a country like Pakistan, where females receive less education compared to males, analyzing the sample separately by gender becomes important (Burney and Irfan, 1991). Factors such as labor market discrimination, cultural norms, restrictions on female mobility cause low enrollment of girls in schools (Alderman, Orazem and Paterno, 2001). Secondly, the enrollment differentials across gender are evident as the Gross Parity Index of Gross Enrollment Rate (GER) primary schools in Pakistan is 0.85 suggesting that more boys are enrolled at schools relative to girls.1 These statistics increase the urge for policy proposition in educational sector in Pakistan. Moreover, government school system guarantees equitable geographical access to schools for people of all income levels. Those children who are neglected by their parents and are deprived of learning investments at home are expected to join government schools. Learning and Education Achievements in Punjab Schools (LEAPS) study of 2008 narrates that although the government is the main provider of education, the infrastructure quality of public schools remains poor compared to private schools.2 Moreover, unsafe school buildings and lack of all-girls schools are factors that hamper that female enrollment especially in the rural areas. Although, numerous studies have identified the demand and supply side determinants of schooling in Pakistan, very few have addressed the gender disparity in enrollment due to differences in school infrastructure quality in public schools. Therefore, this study aims to bridge the gap by constructing a school infrastructure quality index using all public schools in the districts of Punjab. The purpose of this study is to find the impact of SIQI on probability of primary and middle school enrollment of children aged between 5-14 years in 36 districts of Punjab over the period of 2007/08 and 2010/11. Further, this study examines is there any significant gender differentials in school enrollment with SIQI.
Female workers in garment industry in Bangladesh: does economic independence transform into ‘Empowerment’?
(University of Peradeniya, Sri Lanka, 2015-09-23) Sumana, Ferdausi Mahojabin
Introduction Garments industry of Bangladesh can be distinguished as the most crucial source of inclusive economic growth as this sector engages the largest number of poor women in the formal sector of the economy. Even though these employment opportunities have given positive benefits to the low skilled women workers through better standard of living, a puzzle that still remains unanswered is that to what extent their economic freedom is translating into power of exercising their choices in lives? The existing literatures of garment workers of Bangladesh can be grouped in two. One group argues female garment workers are being empowered and their living standard are being improved even though there is unfriendly environment at work place. The other group of the literature argues, garment workers are being severely exploited in their workplace. Only limited number of studies is available on the issue of their empowerment dynamics that specifically opt for inquiring to what extent female garment workers are empowered after being economically independent. This is an important issue to look into since the future of these women workers is going to be an important sign of future economic development of Bangladesh via indirect route of growth (Kabeer and Natali, 2013). Therefore, this research will try to dig into the empowerment dynamics of the female garment workers of Bangladesh to understand to what extent these women labor are empowered.
Currency depreciation and J curve analysis: a case study based on Sri Lanka
(University of Peradeniya, Sri Lanka, 2015-09-23) Lakmal, Hasitha; Perera, Prasanna
Introduction The variability of foreign exchange rates affects many economic activities in all over the world. Currency depreciation or currency devaluation directly affects to decrease imports and increase exports. Therefore trade balance will be favorable. The currency devaluation immediately raises the domestic currency price of imports. The quantities of imports and exports don’t adjust right away. Therefore trade balance deficit increases in the short run. As time passes, the quantity of imports fall and quantity of exports rises. Eventually, the trade balance moves toward a surplus. This type of system can be called a J curve (Yarbrough and Yarbrough, 2003). Real exchange rate devaluation badly affects on trade balance in the short run but it favorably affects in the long run. Therefore, there is a J curve effect regarding bilateral trade in Thailand (Bahmani-Oskooee and Kantipong, 2001). Although in long run bilateral real exchange rate devaluation or depreciation favorably affects on trade balance but not in the short run (Dash, 2013). However, according to Perera (2009) and Vijayakumar (2014), bilateral foreign exchange rate positively affects on trade balance between Sri Lanka and USA in both long run and short run. But no studies have been conducted to examine the effect of currency depreciation (Sri Lanka introduced freely floating exchange rate system in 2001) on bilateral trade balance between Sri Lanka and her main trading partner India using J curve analysis.
Sustainability of community based microfinance programmes in livelihood development for war affected areas in Sri Lanka – Experience from the rawakening project (RAP)
(University of Peradeniya, Sri Lanka, 2015-09-23) Chandrasekara, Darshani; Senarathne, Niluaka
Introduction Microfinance can be considered as a concept which has received high recognition in community development programs due to its attempts in involving marginalized groups in the mainstream development process. The establishment of the Grameen Bank by Muhammad Yunus was the major milestone that resulted in the identification of microfinance as a community development strategy among development thinkers. In fact, community based microfinance became popular along with the introduction of participatory development or people centred development where the decisions are made at grass-roots level. The term microfinance is often confused with microcredit and therefore, prior to understanding how sustainable community based microfinance programs are, it is important to differentiate between the two terms. Microcredit refers to the provision of small scale loans to poor people and microfinance refers to the process through which financial services are provided, such as initiating savings institutions or insurance schemes (Sengupta and Aubuchon, 2008). Taking microfinance as one of the main strategies, Community Livelihoods in Conflict Affected Areas Project which is known as the Re-awakening project was initiated in 2005 in the North Eastern Province. The aim of the project was empowering people in the war affected areas of Sri Lanka through capacity building and livelihood development to foster sustainable social and economic reintegration. The project was initiated through two major components namely, village rehabilitation and development, and essential rehabilitation and improvements to major irrigation schemes. The study mainly focuses on how microfinance was used as a mechanism in village rehabilitation and development and the extent to which it was sustainable. The project implementers selected war affected and poverty stricken villages for the project, based on specific criteria developed by them and covered 1,039 villages in twelve districts. Project officers then publicized the project through posters and leaflets and called a meeting of the villagers in which 80% participation of villagers was deemed necessary. During the meeting, the participants were informed about the project and also about the formation of a Village Development Organization (VDO) through which activities related to microfinance would be implemented. VDO is composed of several small groups, each made of 5 to 7 villagers. The villagers are given the freedom to form such small groups based on residential proximity. Thus small group members are usually neighbours who are well known to each other. The whole process of forming groups and the VDO takes approximately three months. The VDO also includes 5 subcommittees, namely those on microfinance, social audit, infrastructure, procurement and economic promotion. Based on the number of people in the village, Rs.6000 is allocated per person and a fund is formed. Once the fund is formed, 50% of the fund is allocated for livelihood development, 40% for infrastructure development and 10% for capacity building. When the activities are implemented, a young educated resource person from the village itself is appointed to manage the tasks of the VDO. Once the VDO is established a Village Development Plan (VDP) is prepared using the data gathered from a Participatory Rural Appraisal session. The VDP evaluates the families based on their economic status through which the poorest families are given the first priority in the livelihood development process. The villagers are given loans ranging from Rs. 30,000.00 to Rs. 200,000.00. However the applications by the villagers should be processed through the recommendation of the small group in which he/she is a member. The application is then sent to the microfinance subcommittee for evaluation and the final decision of granting the loan depends on the approval of the Maha Sabha (the VDO assembly). The loan amount is then decided by the Livelihood Development Officer who visits the beneficiary for the final evaluation.
The structures of desire and dispossession: Class-nature of neo-urban structuralism in post war Sri Lanka (A revisit to David Harvey’s conceptualization on capitalist city)
(University of Peradeniya, Sri Lanka, 2015-09-23) Rajapaksha, Kalpa
Introduction Human-cities are not simply a set of material constructions, a set of buildings, transportation networks and mode of transportation, and identities of metropolitans. Historically, cities have been signified the highest achievement of conquering political economic ideology, or the justified framework of capital accumulation and transformation, contemporarily the ideology of capitalism realism. They appear, at a specific geography and in a certain epoch of a society, with a set of ideological positions and with a set of propositions of logics of surplus generation and capital accumulation. As a result of that very ideological positioning and the logics of surplus generation and capital accumulation, a city of capitalism is the ideal site to be seen the glorified-desire and muted-dispossession of capitalism itself. At a wider sense of this argument it is more than that. David Harvey elaborates the broader picture of capitalists’ city and its camouflaged-true-nature of contradictions in production, reproduction, surplus generation and class-nature of urbanization comprehensively (see Harvey 1985, 2001, 2010). This study fundamentally depends on the theoretical foundation which David Harvey unearthed and developed regarding urban structuralism in capitalist development and the class-nature of urbanization. The study can be called as a theoretical revisit of Harvey’s key arguments,on the city, urbanization and class-nature of neo-urbanization in the post-war Sri Lankan context and a revisit to the grounded dynamics of neo-urbanization which take place in the same context.
Unemployment, official economy and the dimensions of the shadow economy: an empirical analysis for Sri Lanka using SEM approach
(University of Peradeniya, Sri Lanka, 2015-09-23) Samaranayake, D.I.J.; Dayaratna-Banda, O.G.
Introduction Economists and policy makers still have a series of issues when accounting all unobserved market fractions in a challenging market economy. These challenges get worse within complex market structures in developing economies. One of the challenges is the expansion of unofficial and hidden economic activities which is generally known as the ‘Shadow Economy’ (SE). It includes economic activities which fall outside of the government accounting and represents some form of unofficial economy and a part and parcel of criminal and informal transactions. Schneider (2004) illustrates an increasing trend for the size of shadow economy in Sri Lanka between 1999-2003 periods and it was 45.9% of average. However, Schneider et al. (2010) estimate 43.9 % of SE as an average from 1999 to 2007. Moreover, their results demonstrate a decreasing trend in the relative size of SE over the years. However, the relative proportion of the SE still seems to be a problem in Sri Lanka. The affiliation between SE and unemployment rate also an identical matter considered by number of researchers. According to Alanon and Antonio (2005), high rates in unemployment encourage more individuals to find a job in the SE. On the other hand there is also a possibility to limit the job opportunities in the SE due to very high unemployment levels. In Dell’Anno and Solomon (2008), there was positive relationship between unemployment rate and the SE for the countries they use in the study. The empirical results used by Davidescu and Dobre (2012) mention that there is a strong evidence of uni-directional causality1 running from unemployment rate to SE at 1% level for U.S.A. This study basically attempts to estimate the Sri Lankan Shadow Economic activities as a percentage of official estimates by using unemployment rate as a key proxy, while revolving the wheel of non-clarified zones and market functions through overstepping into the traditional official estimates.
'Flying high beneath the wings of red dragon’ cats-paw states and rising Chinese hegemony in South Asia
(University of Peradeniya, Sri Lanka, 2015-09-23) Samaranayake, D.I.J.; Rajapaksha, Kalpa
Introduction In the geopolitical globality, the stability of a certain global hegemony is not realistic when a leading state cannot keep the control over proxy states. The proxy states are more or less in persuading power in their own terms and strategies in a dynamically competitive geopolitical agenda. The ‘Proxy’ refers to the alternative agents who can be instrumented momentarily with a greater stand point of strategicopportunisms of capitalist world power. Generally, this kind of research identify the fact that magnetising, weakening states and their politics to be ‘unconditionally opportunistic’ in persuading power and neo-liberal economic prosperity. This study objectifies the role of China which is the Communist head with Capitalist body. Some of the existing literatures also provide an imperative access to this statement (e.g. see: Foot, 2006; Callahan, 2008; LUE, 2010). Recent experience from China-Sri Lanka bilateral relationships indicates that how China uses ‘its aid – the dragon kiss’ (material and normative forms of power) to cripple the intensity for better cooperation along with the neighboring states in South Asian region.
A study on the nature of the customers who used IT driven banking services of Commercial Banks
(University of Peradeniya, Sri Lanka, 2015-09-23) Abeyrathna, B.G.C.M
Introduction Numbers of sectors are maintaining their services with quality and systematically by using information technology. Around two decades before, commercial banks started to apply information technology for their services. In the first stage, IT was used only for internal affairs. However nowadays, it has been developed as a self service provider. Currently, banks offer services with high quality and efficiency by using IT driven services such as ATM, Mobile banking, Internet banking etc. If there is an enormous queue inside the bank for small scale and small transactions, it will disturb the banks essential, valuable and prominent transactions. Therefore, customers have been given opportunities to paying bills, exchanging money, and inquiring the balance at home by a telephone or a computer. A research was conducted in New Zealand banking sector and the results show significant relationships among online customer service quality, online information system quality, banking service product quality, overall internet banking service quality and customer satisfaction (Rod et al, 2008). Moreover, it was identified a positive relationship between IT and efficiency of banking services (Naseem et al, 2012). Further, a comparative study in Japan and South Asian countries revealed a positive relationship between IT and productivity of the banking activities (Swierczek and Shrestha, 2003). Commercial banks can be identified as with internet banking facilities and without internet banking facilities. It means some commercial banks use more and more internet banking facilities for their transactions. It was conducted a comparative reserch using this kind of two commercial banks. This research comparatively showed favourable amount of profit and efficiency of activities exist in banks which with internet banking facilities than the other banks (Malhotra and Singh, 2009). Furthermore, It was identified lack of knowledge exist in Sri Lankan clients regarding IT driven banking services. Therefore it was mentioned that the problem of returns of investment on IT driven services are questioning (Suraweera et al). No studies have been done regarding the nature of the customers who use IT driven banking services of commercial banks in Sri Lanka. Therefore, this study is mainly focused on whether there is any special group of customers’ using IT driven banking services of commercial banks.
Undernourishment in dveloping nations in Asia: investigating the macroeconomic links
(University of Peradeniya, Sri Lanka, 2015-09-23) Musfir, A. H. M.; Jayasinghe-Mudalige, U. K.; Edirisinghe, J. C.; Herath, H. M. L. K.; Udugama, J. M. M.; Lokuge, L. D. M. N.
Introduction Food security is defined as ‘a situation that exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life’ (FAO, 2002). The major dimensions of food security include, food availability, accessibility and utilization, and lack of which, individually or collectively, could lead to a ‘food insecure’ society. The specific objective of this study was to examine empirically the relationship between a set of key macroeconomic indicators on prevalence of undernourishment in the Asian region – the most populous region in the world and possesses the highest undernourished population, and about two-thirds of the world’s hungry live in Asia.
An empirical analysis of households electricity demand in Ampara district in Sri Lanka
(University of Peradeniya, Sri Lanka, 2015-09-23) Aslam, A. L. M.; Nigel, J.; Lebbe, S. M. A.
Introduction Electricity plays a crucial role in the socio economic development of a country (Beenstock et. al., 1999). Sri Lanka is one of the nations which produces electricity from a mixture of sources such as hydro power, thermal power, wind power and bio energy (Public Utility Commission for Sri Lanka, 2012). Hydro power is the primary source of electricity in Sri Lanka and generates electricity in ten large and one small power station in the Laxapana, the Mahaweli, and the Samanala complexes. In 2013, the electricity generated by hydro power was 6,918 GWh. The thermal power is the second source of electricity in Sri Lanka which produces 4,772 GWh and the generation of power through Non- Conventional Renewable Energy (NCRE) sources, including mini-hydro generation was 1,171 GWh in 2013. Bio energy is another source of power in Sri Lanka to supplement the electricity to Ampara and Monaragala districts which is made by using paddy husk. The electricity generated by bio energy was 260 GWh in 2013 (Central Bank report, 2013). In Sri Lanka, electricity is mainly used for residential, religious, general, industrial, and hotel purposes. Numbers of consumers of the above categories have continuously increased in the past. The number of domestic consumers are 88% of the total number of electricity consumers in 2011.The largest share of 40% of the total electricity units has been sold to domestic users in 2011 (Public Utilities Commission of Sri Lanka, 2013). Electricity demand has been analyzed theoretically and empirically using different approaches (Beenstock et. al., 1999; Athukorala et al., 2007; Abosedra et al., 2009). These studies have considered different factors that influence the household electricity demand patterns according to the context and have analyzed the household electricity demand both at micro and macro levels. Complementing the existing studies, the present study will investigate the empirical realities of the households electricity demand in Ampara District in Sri Lanka. Hence, this study attempts to fill the research gap on household electricity demand through empirical test in the selected District. As there is a lack of research on this important issue, this empirical study is aimed to address this gap and this study was conducted in Ampara District of the Eastern Province of Sri Lanka.
The present of past slaves: the socio economic situation of Sri Lankan Kaffir people
(University of Peradeniya, Sri Lanka, 2015-09-23) Kopinath , C.; Herath, H.M.D.R.
Introduction Sri Lankan Kaffir is a group of people or an ethnic group living in Sri Lanka for nearly four hundred years. They were traditionally scattered in some parts of the country, mainly Negombo, Batticaloa and Trincomalee; but they are largely found today about 45 in number, in Sirambiyadiya, a small village located in Puttalam District (Hussein, 2009). The Kaffir community had its early origins in the slave labor brought into the country from Africa during the colonial period. Colonial powers brought them as a part of the naval force, domestic workers, soldiers, servants, sailors, merchants, mystics, mothers, musicians, linguists, dancers, divers, concubines, commanders, administrators, nurses, nannies, palace guards, and bodyguards living a range of experiences across diverse societies, cultures, conditions, and periods (Omar, 2011). Kaffir people are referred to as Kapiriyo in Sinhala and as Kapili in Tamil without any specific meanings attached to those terms. However, the term Kaffir has a different meaning. It is often used in much of the Indian Ocean world (outside of East Africa) to describe any person of African descent, regardless of religion or faith (Jayasuriya, 2000; Gwyn Campbell, 2006; Omar, 2011). According to the first census of Sri Lanka there were 245 Caffres1 (Kaffirs) living in Sri Lanka and only one Kaffir was found in Colombo town, others resident in other parts of the country (Ferguson, 1873). Kaffirs served as slave people in Sri Lanka and their music tradition, dance, dressing patterns, their language, and religious practices are unique (Brohier, 1973). Sri Lankan Kaffirs are a distinct ethnic group, but are not known to many of the other Sri Lankan groups. They are now no longer a community of slaves, but still live under relatively poor socio economic conditions and without the recognition of others that has been taken as a research problem of this study. 1 The term Caffres was used to denote Kaffir people in the early census of Sri Lanka Ferguson (1873).
Causal relationship between international trade and tourism: empirical evidence from Sri Lanka
(University of Peradeniya, Sri Lanka, 2015-09-23) Chandrasiri, D. P. D. D.; Samaranayake, D.I.J.
Introduction Sri Lanka has an inherit benefit of having a highly diversified tourism product which could be pitched against any other well established tourism destination in the world. It is highly labor intensive and very significant source in employment which recorded over 1.2 million tourist arrivals in 2013 with 26.7% of growth compared to the previous year (Central Bank Report, 2013). Furthermore, continues performance within the industry is validating by the Master-Card ratings in 2015, ‘Colombo’ is the city with the best growing tourism sector in the world. The collaboration of such fast gaining industry with trade protocols and economic growth of a country may vital for an under developed country to achieve an adequate position within modern market structures. Shan and Wilson (2001), and Kadir (2010) use Granger causality test in heterogeneous panels to investigate the nature of causality vary among travel and trade flows of some under developed economies. Their findings indicate that there is a bilateral causality between trade in goods and the tourism expenditure for respective countries, which stimulates us to investigate the domestic phenomena where fewer researches were taken.
Prevalence of intra industry trade: Analysis of firm level total factor productivity in Pakistan’s manufacturing sector
(University of Peradeniya, Sri Lanka, 2015-09-23) Ali, Haq Shujaat; Arisha, Akbar
Introduction Trade in today’s world has moved away from inter industry trade and towards intra-industry trade. Consumers in France can buy both French made Peugeot cars and imported German Mercedes. Similarly, consumers in Germany can also import Peugeot and many other cars from around the world while Mercedes is exported all over the globe. This represents a perfect example of intra industry trade that is marked by product differentiation and the ability of firms which produce essentially similar products to compete in the international market. The underlying mechanism that enables such trade to take place is productivity at the firm level. This is different than the concept of comparative advantage where countries as a whole specialized in industries for which they had abundance of relevant factors of production such as labor, land, technology and skilled human and financial capital. On the other hand, the concept of trade originating from differences in firm level productivity means that within a country, all those firms export which have a sufficiently high rate of total factor productivity that enables them to compete at the international market. This is exogenous of the economy’s overall comparative advantage and a firm may be exporting products in which the country in general may not have the best factors of production. This can happen if the firm proactively improves its method of production through import of technology, develops human capital, takes advantage of economies of scale and moves along its learning curve through learning by doing. With an ideal mix of such factors, it is possible for any firm producing any product anywhere in the world to become an exporter. A second explanation of intra industry trade analyzes the effect of product differentiation. Consumers may be willing to pay extra for a product if a firm creates a market niche for its brand. Most of the existing literature found that increase in total factor productivity (TFP) leads to increase the exports (e.g., Baldwin and Gu 2015; Haider, 2012; Wagner, 2005; Girma et al., 2004; Bernard and Jensen, 1999) Moreover, Krugman (1979) sets up a model of non- comparative advantage trade. But he does not directly examine the causal relationship between TFP and exports. He found that trade and trade gains occur even between countries that have similar technology, taste and factor capabilities. Melitz (2003) examine how intra-industry trade is incorporated into world trade. He shows how trade leads to less productive firms exiting the export market and only the more productive firms remain. Taken together, the results indicate that a relationship exists between TFP and exports. Hence, this paper will analyze how improvement in productivity affects exports.
An empirical analysis of industrial exports and exchange rates in Sri Lanka
(University of Peradeniya, Sri Lanka, 2015-09-23) Ekenayake, E.M.G.P.; Kankanamge, Anuruddha
Introduction Industrial exports have earned 74.2% from total exports in 2014 with the consistence of textiles and garments, diamonds, gems and jewelry, petroleum products (Central Bank of Sri Lanka (CBSL) Annual Report, 2014). One of the major policy which is implemented by Sri Lankan government is devaluation of rupee against US dollar to increase competitiveness of exports in international markets (CBSL Annual Report, 2011). International agencies like World Bank and IMF also recommended devaluation of local currency to promote exports in developing countries related to the theory (Fischer, 1998). For example, Marshall Lerner condition supports devaluation of currency under some specific conditions (Kulkarni and Clarke, 2009). Empirical research also supports this view (Aziz, 2012; Boy and Caporale, 2001). The existing literature provides evidence of not only the mean exchange rate but also the volatility of exchange rate creates adverse effects on exports of developing countries like Sri Lanka (Arize, Osang and Slottje 2000). However, there is no sufficient empirical evidence that examines the impact of exchange rate in Sri Lanka particularly on industrial exports. Also the previous studies (Ekanayake and Chatrna ,2010; Hooy and Choong, 2010) identified inconsistent results. Thus, this paper attempts to fulfill the above research gap by empirically investigating the effect of exchange rate on real industrial exports in Sri Lanka.
What next with NIFA? evidence of currency divergence in South Asia
(University of Peradeniya, Sri Lanka, 2015-09-23) Samaranayake, D.I.J.
Introduction The global financial crisis in 2007/08 was considered as one of the worst economic crisis in the world. It paralyzed lots of economic activities in the world and generated negative results after the Great Depression1in1929/30s. The crisis played a major role in the failure of key businesses and declines in consumer wealth in trillions of U.S. dollars. Therefore, lot of intellectual as well as public discussions takes place in various countries to identify the key issues behind this crisis. New International Financial Architecture (NIFA) becomes a one of popular topics among those discussions. According to the ‘Report of the Task Force of the Executive Committee on Economic and Social Affairs of the United States’ in 1999, NIFA was introduced as a framework to prevent financial crisis. Maintaining the dominance of U.S. dollar as world currency and capital account liberalization are two major aspects of NIFA. It exerts pressure on subordinate regions such as South Asia to peg their currency below the value of U.S. dollar (Wade,2008). However, NIFA failed to defend the capitalist giant; U.S from financial crisis in 2007/08. As a result of that adverse fallouts from the crisis were damaged the economies of both developed and least developed countries in the world (Crotty,2009). Therefore, subordinate regions such as South Asia needs to think of their own way to prevent from such destructive neo-liberalize waves .Some of economists have done several studies to identify the relevance and challenges behind the currency convergence in South Asia (Khalid and Rajaguru, 2004; Chowdhury et al., 2008; Mohsin, 2011). However no specific study is done to examine the effects of NIFA on currency convergence. Therefore this study focuses on the effects of NIFA on the monetary integration of the region.
A policy beyond formalities: Fuelling privet sector investment in Bhutanese economy
(University of Peradeniya, Sri Lanka, 2015-09-23) Choden, Kinga; Samaranayake, D.I.J.
Introduction Investment is a process of adding more value to the already existing stock of capital. In Bhutan, investment has been playing a vital role in building up the private sectors through making profitable investment. But the private sector investment in Bhutan is still in limited number though the country has stepped through 50 years of development. As a result private sector investment has been an overwhelmed issue ever since and Pokhrel (2014) has mentioned the importance of doing business in Bhutan and describe the situation that the private sectors are facing regarding the investment. Ease of doing business for Bhutan is important where people who are interested to take up the business and people who have already taken interest must find it easy to do business in particular economy. Five indicators are used by the Ease of Doing Business Index (EDBI) to measure how easy it is to do business from a regulatory and bureaucracy perspective. According to the Doing Business Report (2015) Bhutan rank highest on getting credit (71th) while at the other end, it ranks lowest on resolving insolvency (189th). Therefore, this study has perform a bottom to top analysis on 5 EDBI indicators to identify whether there is a relationship between limited private sector investments and bureaucratic formalities in the Bhutanese economy.
Dynamic causal relationship between government expenditure and government revenue in Sri Lanka
(University of Peradeniya, Sri Lanka, 2015-09-23) Edirisinghe, Navoda; Sivarajasingham, Selliah
Introduction An opposite fiscal policy is a vital ingredient for sustainable economic development. Sri Lanka is often suffering from a persistent fiscal deficit one that has been increasing in an exponential way in nominal as well as real values. Many scholars have drawn their attention to comprehend the budgetary movements and the causal relationship between government revenue and government expenditure since, it is essential to address unsustainable fiscal deficit and evaluate the government’s role in the management of resources. Moreover, such evaluation clears the way for sound fiscal policy formulation and implementation to achieve rapid and sustainable socio-economic growth (Obioma & Ozughalu, 2010). Persistent behavior of budget deficit raises many unanswered questions in existing literature. The direction of causality between the government revenue and government expenditure is still a puzzle. Theoretical literature explains the causal relationship between government revenue and government expenditure by considering four hypotheses. The tax-and-spend hypothesis, proposed by Friedman (1978) explains that raising taxes will simply lead to more spending. The spend-and-tax hypothesis, proposed by Peacock and Wiseman (1961, 1979) postulates that government expenditure causes government revenue. The third school, fiscal synchronization hypothesis argues that government may take revenue and expenditure decisions simultaneously, because the two variables interact interdependently (Meltzer & Richard, 1981; Musgrave, 1966). Finally, fiscal neutrality school or institutional separation hypothesis which was introduced by Baghestani and McNown (1994) is based on the perspective that government revenue and expenditure decisions are independent of one another. Using bounds testing approach for Sri Lanka Narayan (2005) identified government revenue Granger cause government spending in the short run. In the long run, government spending Granger causes government revenue. Using Engle Granger Co-integration approach and Error Correction Model (ECM) for Sri Lankan Ravinthirakumaran (2011) found bidirectional causality between revenue and expenditure which supported the fiscal synchronization hypothesis. According to the existing literature, it proves that only limited numbers of studies have concentrated on this issue in Sri Lanka and no one has extended their analysis to identify the short run and long run dynamics and budgetary movement. By considering these research gaps, this study investigates the direction of causality between government expenditure and government revenue for Sri Lanka.
Impact of supermarkets on small traders and neighborhood stores in Karachi, Pakistan
(University of Peradeniya, Sri Lanka, 2015-09-23) Akhtar, Neha Nadeem; Shahid, Shahan
Introduction This paper is an attempt at filling the current void in literature concerning the impact of large supermarkets on small neighborhood stores in Pakistan. After examining possible reasons for their growth and reviewing existing literature from Hong Kong and Turkey — countries which have experienced a similar process in their history — we use a survey to determine consumer perceptions about supermarkets. Additionally, we use data from our survey to plot supermarket consumers on a map to assess their geographical reach. This exercise allows us to deduce the impact these stores are likely to have on small retailers.
Potentials for foreign exchange earnings in Sri Lankan tourism industry: considering leakage and linkage effect
(University of Peradeniya, Sri Lanka, 2015-09-23) Tennekoon, P.W.; Rajaratne, E.P.M.
Introduction Tourism is one of the fastest growing industries globally and especially in the developing countries. International tourism is crucially needed for foreign exchange earnings, employment, income, government revenue and stimulation of regional development. The tourism industry is a cluster of goods and services that incorporates numerous inter- related industries such as infrastructure, transportation, hotels, food and beverages industry etc. which can create a spillover effect across all the sectors. Even though the tourism sector has opportunities to significantly contribute to regional economic development, tourism and hotels tend to use large wholesale retailers rather than small enterprises. Due to several reasons such as shortage of capacity, poor quality and general unreliability of service delivery, the tourism related companies import goods, services, and skilled labor that alleviate the industry’s positive impact on the local economy (Hall, 2008). This is because the revenue from the industry often flows back to foreign owners and suppliers. More than two-thirds of the revenue from international tourism never reaches the local economy because of high foreign exchange leakage (Pleumarom, 1999). In view of the fact that one third of tourism spending accounts to food (Belisle, 1983), maximizing linkages to local food sector could have a significant impact on reducing leakage. Leakage from at least six factors: (i) the cost of goods and services purchased to satisfy the needs of visitors, (ii) purchase of materials and equipment from other countries to provide infrastructures for tourism, (iii) payments to foreign factors of production, (iv) expenditure for promoting a destination abroad, (v) transfer pricing and (vi) payment of profits, dividends, royalties, and incentives etc. to attract investments in the sector (Mill and Morrison, 1999). The foreign exchange earnings are usually overstated as leakages neglected and not taken into consideration. The leakages must be subtracted from foreign exchange earnings in order to estimate the real possible economic impacts associated to tourism. Therefore there is a research worthy area in Sri Lanka regarding the net foreign exchange earning capability of the tourism sector is left out for serious studies. The problem of this research, therefore, relates to the net foreign exchange earnings of the tourism industry in Sri Lanka.

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