Monday, October 31, 2005

sri lanka cuts phone links to 13 countries

telecommunications regulatory commission of sri lanka(trc) has requested sri lanka telecom(slt) to cut idd to solomon islands, vanuatu, the cook islands, the wallis and futana islands, papua new guinea, nauru, tuvalu, tokelau, western samoa, niue estonia, and kiribati.
block will be there for 3 months from next week.

according to director general of trc: "We have decided to do this because of modem hijacking," .

imo this is stupid. just because a small number of customers fall victim to this sort of easily preventable scam should whole countries be cut off? if customers get billed for calls they never made they should sort it out with their phone company and follow the simple procedure needed to prevent this.

you might object that since countries concerned are small and unimportant this is no big deal. well for one, sri lanka is small and unimportant, how would you feel if same was done to us by usa ? second, it is the principle that is important. if this sort of attitude prevailed internet itself would be banned eventually.

what's next? government blocking of all emails with word 'nigeria'?

Friday, October 28, 2005

harry j and the commercial bank

a lot of interest has been aroused by the mr jayawardena's (btw his full name in don harold stassen jayawardena, a easily verifiable fact some newspapers got wrong) attempt to remove mr m.j.c.amarasuriya from his directorship (thus his chairmanship) of the commercial bank(combank) board. an extraordinary general meeting of shareholders requested by two of the main shareholders of combank, namely distilleries co of sri lanka(dcsl) and sri lanka insurance corporation(sli) (both controlled by jayawardena) will be held on 2nd of november for that purpose. in fact because of the large number of shareholders who are expected attend, venue was changed from bank's auditorium to holiday inn.

before discussing the merits of the case i would like to point out some basic facts that are not considered in newspaper articles dealing with this issue. (please note that this is simplified for easy consumption )

how to get seriously rich.

since a main argument put forward by people opposed to jayawardana concerns his motivation, let us see what he has been doing in the past.

simple answer is he has been trying his best to get very rich. and the method he uses has been followed by lots of wise investors world over with spectaculars success. in fact if you are not a genius innovator or a big risk taker(as in venture capitalist etc. ), or a just plain lucky person and you do not want to do anything that is illegal, then this is the only method to get seriously rich.

method (simplified) consist of

  1. secure a steady cash flow
  2. take loan against the future cash flow
  3. use the money to secure another steady cash flow
  4. go to step 2

to take a example, from jayawardena's past, first he bought dcsl( step 1) (that almost monopoly spews out more than 1 billion in profit each year, with nothing much to do by way of reinvestment). then it's expected future cash flow made it possible for him to get loans (step 2) to buy sli, another cash cow(step 3). he has consistently followed these steps (as when he bought lanka bell (another cash cow) recently ).

control of combank will enable him to continue with this strategy. that is because he has bumped up against a problem when obtaining financing (that is step 2) for future deals because these deals are expected be large by sri lankan standards.

it is one thing to get 4 or 5 billion rupees against dcsl cash flow but something else to obtain the money needed to say, buy that ultimate cash cow the sri lanka telecom (probably about 40 billion or more) whenever the government sells it's remaining stake. while financing for this will be easily obtained by anyone with access to developed capital markets, sri lankan financial sector is so undeveloped that no private bank will be in a position to advance that kind of money. total assets(that is mostly loans to customers) of hnb the largest private bank(already more or less controlled by jayawardana) is only 153 billion in 2004. which means to get that kind of money (without breaching single borrower limits etc. that apply to banks), he has to get control of other available pools of money in sri lanka. and the prime target is combank.

what does a bank actually do.

banks take deposits from customers and pay interest for those deposits and then lend that money and receive interest from the borrowers. their profit is the difference(spread) between those two interest rates less costs (including regulatory costs) .

so, say a bank has 100 billion in deposits and it pays 12% on deposits( that is it pays 12b in interest). it has to park about 10% of deposits in central bank as a statutory requirement. so it has 90b to lend which it does say at 15%, then it will get 13.5b in interest. so it's profits before costs comes to 1.5b.

but that is what a bank is supposed to do.(of course they get income from other sources too. such as money market and foreign exchange dealings, other fees etc. but let's leave that aside for the moment)

but commercial bank is different. in most banks share capital and retained profits (called the shareholders' funds) is used up in various physical assets and such(buildings etc.), those assets mostly does not give a return. but in combank shareholders' funds exceeded any such requirement by 5.5b at the end of 2004. this excess is called free capital. why is this important.? because the free capital is well 'free', almost. since the dividends are paid as per 'par value' of shares(rs.10) and the net book value of a share was rs.172( at end 2004) cost of that 5.5b to the bank is negligible.

so if the bank lends that 5.5b at 15%, it will get 0.8b in interest. but since it doesn't have to pay anything for that money this is pure profit. in other words 5.5 b in free capital equals 50b in deposits.

this the main reason why combank has been able to make consistently good profits while other banks' profits go up and down with the sri lanka's interest rate volatility. for instance in 2001, a very bad year for banks combank made more profits than all the other local private banks combined. yes, it has a lower cost to income ratio than other banks but this is the main reason.

anybody who controls combank will be able to release this free capital with minimum fuss, after all it belongs to the shareholders.

shareholders should have the final say

this free capital and the fact that he will be able to draw loans from a larger pool in the future is probably why harry j is trying to get control of combank and not because of ' reasons(that) are personal and mala fide' as claimed by amarasuriya in his letter to the shareholders dated october 5th .

most commentators object that according to law it's illegal to own more than 10% of a bank by one person or group acting in concert. while there is a rule like that, central bank has pointedly not acted. why ? maybe because these things are more flexible than people think and has been flexibly applied so far in sri lanka's banking history. do not expect central bank to act differently now.

second objection (which is also the justification for the above rule) is that a dominant shareholder will use depositors money for his own purposes, thus putting their money at more risk than necessary. but that is mere speculation and even professional bankers sometimes screw things up. central bank has done a good job as a regulator as far as commercial banks in sri lanka are concerned, there is no reasons to expect it will fail to do so in the future. if customers fear for their money, they should withdraw the deposits.

minority shareholders may fear that their interest will not be looked after, but if they do they can sell now. but comparison of dcsl share price and combank share price shows that though both have done phenomenally well in recent years dcsl has done much better.

silly unions at combank are threatening to strike on this. what could be more stupid and harmful to their bank? if hnb and comb are to merge in to one bank there will be some layoffs (in that case given that combank staff are more efficient by all measures, it's the hnb staff who should fear) but i don't think any such formal merger will take place.

another objection is that there will be less competition if a single group controlled both combank and hnb. that is not true because in sri lanka largest banks are the state controlled bank of ceylon and people's bank. if you want more competition best thing to do is to privatize those two.

in fact i believe most people object because they don't like jayawardana (he certainly doesn't fit the normal mold of the colombo elite) and what he stands for – capitalism. fact that they don't articulate this indicate that their objection has no validity in their own opinion nor should it deserve any consideration by us.

anyway shareholders own the bank so they should be allowed to decide what to do.

I don't know how the vote will go on 2nd but i hope share holder rights will prevail.

Thursday, October 20, 2005

black and white versus shades of grey

black or white? good or bad? for or against? unp or slfp? sinhala or tamil? war or peace? friend or foe? buddhist or catholic? male or female? straight or gay? rich or poor? in or out? passed or failed? young or old? in love or not? this or that?

we love simple questions and simple answers don't we? what could be more simple than a multiple choice question with two predefined answers?

of course most of us have the suspicion that in reality answers don't fit exactly in to these predefined concepts.

there is no pure black or total absence of color in reality. morality changes with the person and circumstances. one can be for and against at the same time. one is never satisfied with any political program. everyone in sri lanka is of mixed nationality. there is peace with war right now. some friends are worse than enemies. each person follow their own personal religion. there are 'masculine' women and gay men have love affairs with women. you can be rich but not rich enough. when you enter you also have to leave. passed but has only a 'b'. there are mature children and infantile adults. for each relationship love differs as its underlying emotions change their proportion in the mix. so on and so forth.

but we prefer not to think about all that complexity, it's always much easier to accept unrealizable definitions or ideals usually conjured up by somebody else. we let our unique individuality to be subsumed and defined by labels of all kinds. we unquestioningly submit to rules of behavior (some times real laws) that regulate our activity based on these one size fits all concepts.


is it because we prefer our mind to be clear so we can enjoy our creature comforts in peace? or is it because they provide security in a dangerous and irrational world? or is it because we don't want to be free and thus responsible?

the grand inquisitor in dostoevsky's brothers karamazov mocks the risen christ with these words:
'i tell thee that man is tormented by no greater anxiety than to find someone quickly to whom he can hand over that gift of freedom with which the ill fated creature is born'.

Friday, October 14, 2005

why do we like rainy days?

title is a bit presumptuous of me, it should read 'why do i love rainy days?' but i like it better as it is.

anyway i love days like the past few.

part of it may have to do with a particular rainy september long time ago when i was 13. in a two or three week period that year due to extended school holidays i found myself alone at home and discovered the pleasures of reading( little women, jane eyre, and a children's(but complete) bible were the first). of course i have read before, but this was somehow different. since then rainy days meant reading and with each day memories have become accumulated and reinforced to a such a extent that sound of rain outside, feel of a couch, and emotions generated by characters from beloved novels have all become one irresistible sensation.

then there are the physical sensations and connected memories. why is it that a little relative drop in temperature almost doubles one's sense of touch? i used to think this was not a common phenomenon but have since confirmed that others (perhaps not all) experience the same. there is no better day to make love and to hold one's beloved tightly to oneself. i heard it somewhere that at rainy periods poetry submissions to newspapers trebles. in fact all kinds of sensations seems to get heightened by rain (as long as one doesn't get drenched of course :-)) for instance i love the feel of cigarette smoke on such days though i am not a smoker. if i ever start smoking it would certainly be on a rainy day.

even though one's senses work overtime one feels not the slightest reason to do any 'real' work. it's not exactly sloth but one just don't want to get up and do anything. one feels bored by the movies and the news, earthquakes and elections notwithstanding, one lets emails pile up because the whispering sound of the pc becomes bothersome, but on the other hand one doesn't want to sleep. i was up for the last 22 hours doing absolutely nothing except reading occasionally, but am still wide awake. in fact i am writing this to feel tired.

i know this post is filled with contradictions and is probably stupidly vain. if so it's ironic that not long ago i called someone 'ostentatiously vain' among other things because of a post in a blog.
well, on rainy days one has to be self indulgent and forget logic.

Sunday, October 09, 2005

so called liberal party's freedom of expression!

lanka citizen 'blog' has just published it's parent, the so called liberal party of sri lanka's media policy.

and it includes among other platitudes the following provision.

The enactment of Legislation to ensure to any person the right of reply, with equal weightage for such reply.

as i posted earlier 'lanka citizen' itself does not give the right of reply. what kind of a hypocritical party is this? do they have a right to call themselves liberals? one is reminded of extreme nationalist (almost fascist) 'liberal democratic' party in russia. only these fellows have minuscule support.

even the so called 'liberals' are welcome to comments here.

Saturday, October 08, 2005

when is a blog not a blog?

if you get the latest posts in sl blogosphere through kottu you would have noticed the posts from lanka citizen (from so called liberal party of sl). last time i checked 6 of the last 10 entries at kottu were from this blog.

now i have no objection to very frequent updates of one's blog or expression of extreme political views in one's blog. but the difference in lanka citizen blog is that it closes the comments for all posts from the start. when this happens it ceases to be a blog and becomes a propaganda website and imo should not be included in the 'blogroll'. even the unp's blog allowed comments though it was far from perfect, read about that here.

it is of course up to administrators of kottu to decide and they are free to do whatever they want (btw we are also very thankful for their service). but on the other hand we are free to protest.

i have also sent a email on this to indi AT which is the contact address in kottu.

what's your opinion?

Thursday, October 06, 2005

three colors trilogy

first, this is not a review. just my thoughts about these films, if you want reviews go to internet movie database and see internal and external reviews there(here are the links blue, white, red).

ever since i first read the reviews of krzysztof kieslowski's 'three colors : red' in 1995 and saw the accompanying incredibly beautiful stills, i wanted to see it and the other two films of the trilogy. but had to wait till last weekend to do that. though i bought the dvd set about two months ago i decided to watch all three, one after the other in one sitting, so had to wait until i got the time. in the end, i watched them separately. it took at least a day to digest each, even though they are relatively short (none going over 100 min).

and it was a one of the most rewarding cinema experiences of my life. they were so intense, so richly detailed and so visually stunning that i feel compelled to watch them again and again. even if you don't understand french or has difficulty with it (as i do) i recommend that you watch the films with the english subtitles off, at least on repeat viewing so as to not to miss anything.

literally everything in them is there for a reason connected with the theme or the plot of the film, from background details to the speed in which the camera moves. they are filled with symbolism but never in a obscure way, one can easily grasp the meaning of symbols and admire the director's stylistc creativeness. unlike say, tarentino films which are also richly detailed, but which require that you know something about the genre he is parodying/paying tribute to by each film to fully appreciate his stylistic virtuosity, as well as his usual crop of 'in' jokes.

here even the very few details that seems not to make sense become clear when you see all three. so if you see a old stooped person pushing a empty bottle to a high recycling bin, don't worry, if you don't get it, you will in the end. as for 'in' jokes there is only one about a imaginary dutch composer but it's woven in to the plot (in both blue and red) so doesn't matter.

it's always better to watch a film without any preconceived notions about them so don't watch the extras included in the dvd before watching the film (for that matter don't read the introductions that come with classic novels). a work of art can have several interpretations so don't limit yourself before hand.

if you already don't know, the themes of the films broadly corresponds to the ideals of the french revolution (liberté, egalité, fraternité ) and the colors(blue, white, red) to the french flag.


set in paris, this one features juliet binoche, one of my favorite actresses in her best ever performance to date, all the while looking very chic. whole film is tightly focused on her, in fact there is only one scene without her.
she plays a women, julie, who loses her husband and daughter in a road accident. how does one mourn such a loss? can anyone live in a complete state of liberty? what is the value of liberty? or is the whole thing about regenerative power of love? as i said there may be several interpretations.
music plays a greater role here than in the other two movies. it is almost a character here, director forces one to see it with frequent blackouts(or whiteouts) and unfocused or still shots.


in spite of what your dvd cover says the main character is karol played by polish actor zbigniew zamachowski and not the character played by julie delpy. he plays a polish man divorced by his french wife for failing to consummate their marriage. it is mostly set in warsaw. again the theme is examined in a personal level. it's about humiliation (absence of equality) and getting even (regaining equality) and like in blue it questions the value of equality. its also about love and resurrections. this one is much more comic than the other two with a fair amount of laughs.


this is now one of my all time favorites (others are one flew over the cuckoo's nest, godfather 1 and 2, pulp fiction and bladerunner) . it simply glows, like 'noble' valantine the model, played by radiantly pretty irene jacobs (ok, i may be having a bit of a crush here, but that is the point. anyway the part was written with her in mind, with her input).

she runs over a dog in a geneva road and then meets its crusty and cynical owner, a retired judge, played magnificently by french actor jean-louis trintignant, who illegally spies on his neighbors' phone conversations. there is also a young law student living across the street from valentine, whom she never seems to meet.
it's a film about people connecting or not connecting, about compassion and understanding, about fraternity and love, and about destiny and second chances. but unlike the ambiguous questioning endings in other two films, here the end is almost blasphemously conclusive (in fact it concludes them too, i am trying hard to avoid spoilers here). one is invited to take a existential leap of faith ( i know kieslowski explicitly denied that he was following kierkegaard and repeatedly denied being a moralist but ...).

imo it is a deeply religious film, in spite of appearances (and i am not the only one see reviews). at the very least, one wants to do 'good' at the end.

what a godlike way to end his career as a director.

now where in sri lanka can i find the double life of véronique and dekalog films?

ps. blue won best film (golden lion) and best actress at venice. white best director (silver bear) at berlin. red did not win anything at cannes to the surprise of many. winner of palme d'or that year, tarantino for pulp fiction said it deserved to win instead of his film.

at the oscars, since the film was stateless (produced a by frenchman, directed by a pole and set in switzerland) academy refused to admit it to the best film in foreign language category. but the ordinary members of academy (that is actors, directors, techncians etc.) successfully petitioned it to be nominated to the best film category, then an unprecedented step for a foreign language film. however best film oscar went to forrest gump beating both red and pulp fiction. ha!

now, i have nothing against forrest gump but if you want to see the difference between a very good film and a great one watch forrest gump and red one after the other, especially since they broadly deal with similar themes - compassion and brotherhood.

Saturday, October 01, 2005

a political quiz

here is world's smallest political quiz/survey (it's also called the original internet political quiz). if you want to know where you fit in to the political map answer the 10 questions given.

map in question is the nolan chart (here is the wikipedia entry on nolan chart).

quiz is presently hosted by advocates for self government (wikipedia entry about them).

here is a washington post article on nolan chart and this quiz. here are some other reviews.

i am writing this after reading the recent post on durga and michael's blog about a different longer political quiz.

btw i was described as a libertarian after both quizzes :-)

to learn more about libertarianism see,

libertarian faq.

so what kind of a political animal are you?