Gajalakshmi Paramasivam

05 October  2017

Cronyism or Subjective Power

[SriLankan Airlines is set to award its CEO Capt. Suren Ratwatte, the bother of Prime Minster Ranil Wickremesinghe’s senior advisor Charitha Ratwatte, a performance bonus of Rs 10 million despite the airline continuously making losses. Sources close to the Board of Directors of the national carrier told Colombo Telegraph that they had vehemently opposed the proposal put forward by Chairman Ajith Dias, seeking a Rs 10 million bonus for his CEO, whom he claims achieved less actual operating deficit in comparison to the budgeted operating deficit of the airline.] Colombo Telegraph

I must say that I was a little bit upset when I first read the report. The reason being the following recent recording in relation to the Chairman:

[Today  a friend and colleague Yasmin Majeed of  Sri Lankan Airlines, shared  with me, her  return  of exponential value.  Yamin’s last day at Sri Lankan Airlines before she retired, was 22 August 2017.  I rang today (11 September 2017) to share with Yasmin, her farewell experience. Yasmin said that on 22^nd despite a tight  schedule during the day, she had sent out farewell messages to others at Sri Lankan Airlines and that she had received a response back from the Chairman – Mr. Ajith Dias, saying he did not know until then that Yasmin was retiring. Yasmin then went onto share with me how touched she felt when the Chairman had invited Yasmin as his special guest at the farewell function organized for a more senior manager who also was retiring. To me THAT is the goodness that Sri Lankan Airlines needs and has – beyond the rights and wrongs of business. It is an inside feeling that Yasmin will carry with her and as a good contributor  to human resources at the workplace it is natural that Yasmin would have had that invitation from another such carrier – Mr. Ajith Dias. I felt I was honoured by the Goodness in Sri Lankan Airlines for sharing my goodness with them at their time of need. To my mind, that is how ancestral powers are shared with the current generation. ]

At the first read of the Colombo Telegraph article, I must say, I felt apprehensive that I was misled into accrediting Mr. Dias as per my friend’s experience. Even though Mr. Dias is only a small form in the structure I carry in terms of my investment in Airlanka / Sri Lankan Airlines, he was important in terms of my heirs at Sri Lankan Airlines – starting with Mrs Yasmin Majeed. I did not get from the then Chairman, the recognition that Yasmin got from the current chairman but then in terms of years of work – mine at Airlanka are only a very small fraction of that of Yasmin whose whole working life was in the National Carrier. But due to a healthy contribution – my investment in Airlanka and its healthy practices – continue to empower the Airline – whenever there is someone who is receptive to it – even though we may not know each other. That is the soul value of our work.

This urged me to look deeper and I found the following report by Lanka Business Online (LBO):

[SriLankan Airlines has recorded an unaudited group loss of 6.49 billion rupees for the financial year before finance and one-off charges, the carrier said.

This is an increase from the 2.90 billion rupees loss recorded in the prior year.

“But it’s a significant improvement from the deficit that had been budgeted for the year,” the airline said.

Based on draft accounts, the total operational revenue increased to 136.68 billion rupees from 129.48 billion rupees in the prior year.

The airline marked an year of transformation in its recently ended financial year, carrying the highest number of passengers ever in the airline’s history.

“The depreciation of the Sri Lanka Rupee against the US Dollar had a significant negative impact on the airline, as a majority of costs in the global airline business are USD denominated.”

During the last quarter of the financial year, the airline’s performance was adversely affected due to the runway re-surfacing project at Colombo’s Bandaranaike International Airport – which required that the airline cancels over 600 flights during the period.

The airline has completed the integration of Mihin Lanka’s operations into the SriLankan network during the year.
At the end of the year, SriLankan was serving 36 international destinations from its hub in Colombo, with an operating fleet of 24 aircraft.]

As per LBO report – read through a mind that is conversant with Total Quality Management, the current management of the Airline has done well. As per the Colombo Telegraph report:

[Writing to Colombo Telegraph, former aviation professional Rajeewa Jayaweera said:  “In a bizarre development, a proposal has been made to award a performance bonus of LKR 10 Mn to CEO Ratwatte on the basis, he had achieved his target. What is meant by achieving target is Actual Operating Deficit being less than Budgeted Operating Deficit. It is understood his contract letter contains a clause of a performance bonus of LKR 10 Mn in case of achieving his target.”]

First of all it is only a proposal and not a decision duly approved by the Board of Directors. In terms of ‘saving’ our investments in the institution, the reduction of losses is positive achievement. It may seem bizarre to a surface reader – but it is positive management in terms of rebirth. It is important to measure performance within the boundaries of that which one could influence. Given the restructure that took place due to political reasons – one cannot get reliable derivations by using historical method. One needs to use current value methods and hence the relativity with Budgeted measures starting from zero base in terms of history.

In terms of the CEO being relative of the Advisor to the Prime Minister – in Sri Lanka – anyone who claims that Terrorists were defeated when the LTTE was defeated – disqualifies her/himself from the entitlement to ‘Administration clean of  Cronyism’. Without the backup of his immediate family, Mr. Mahinda Rajapaksa is not likely to have defeated the LTTE. Hence all those who claim that Terrorism was defeated by the Government – are promoting Cronyism at the same time.

If the current Management of Sri Lankan Airlines is to be reborn as a Commercial Airline – it needs to include in its Corporate wisdom, the  Independent Commercial values that all investors have made in that Airline. In the meantime, those who are common to both – Politics and Commerce - are needed to neutralise the old influences – the best example being the current President of Sri Lanka. Mr. Dias, the Chairman is the parallel of the Prime Minister and Mr. Ratwatte, the CEO is the parallel of the President in the current structure of Sri Lankan leadership. They need each other during this transitional stage. Here in Australia also – when Americans come as CEOs – they expect big monies which are usually opposed by Australians who have stayed at ‘home’. If Mr. Jayaweera were to return to Sri Lanka as advisor to the current incumbent of the position he vacated, he also is likely to expect to be paid much more than he was when he left the position. He would if he had continued to improve that position in his mind and raise it to global standards. Like ‘Land-only’ meausres ‘Money only’ measures would be misleading in an institution that is highly subjective in its work practices. Sri Lankan Airlines has to become independent of its political influence to earn the eligibility to be measured on commercial basis – the same way Subjective influence in Politics has to die before Sri Lankan Parliament’s performance  could be measured through the Democratic system. A clerk at Sri Lankan Airlines would earn AND spend at a higher level than a clerk within Public Service. Our children for example spend and earn at a higher level than we did. The difference is enjoyed through ownership – so that when they enjoy we feel that we are enjoying. Likewise, true owners of the Airline who are the parents of the current workers.

Here in Australia, where we are Politically discussing the effects of the proposed same-sex marriage laws, our former Prime Minister Mr. John Howard warns us of the need to protect religious rights. These effectively are taken as Christian rights. As a Hindu, this is not unlawful. Until majority Australians are practitioners of religion even one religion practiced in Australia by its fundamental laws has the moral authority to dismiss the relevant law from the system of Natural Justice / Karma. But to invoke that power in current politics Mr. Howard ought to have evolved with the position that he held when he was in Parliament. To my mind, Mr. Howard was effectively dismissed when the secular system had more practitioners than the Christian system. That usually comes with economic prosperity to which Mr. Howard did strongly contribute.

Sri Lankan Politicians seem fearful of eliminating ‘Buddhism foremost’ advantage from the Constitution and hence the transition to Democracy is handicapped. On the other hand if the secular system were to be hastily promoted – majority Sri Lankans would think that they have lost their investment in the system of Government known to them. Better the opposition than indifference leading to takeovers by unscrupulous foreign powers, to whom Sri Lanka is nobody’s business.