given the frequent changes it's hard to keep track, but the best source is the customs website's tariff calculator. It's not 100% up to date but it's the closest freely accessible source of tariff information.

Before the change in May it was something like this;

Petrol - customs duty of Rs.5 per litre and a surchage of 10% on this Rs. 5 which makes it R.s 5.50 per litre. Excise duty of Rs. 20 per litre, VAT 15% (in the last budget it was brought down to 5% but I'm not sure where this stands at the minute), Ports and Airports levy 3% and social responsibility levy of 1.5%. This is when petrol is completely imported as it is done by LIOC.

So if petrol costs Rs. 127 per litre CIF, the taxes on this would be Rs.38 at 5% VAT at Rs. 57 at 15% VAT.

According to Customs there are no tariffs, VAT, or any other levies on crude oil imports - and CPC refines 50% of its petroleum from crude oil imports (but still pays the VAT, excise on the petrol retail price).

For Diesel, again prior to changes in March, there was no customs duty or VAT, there was a Rs. 2.50 per litre excise duty, 3% PAL and 1.5% SRL.

But do check out www.customs.gov.lk - it's a great eye opener about how restrictive our import regime is. [link]

In the year since Al Gore took steps to make his home more energy-efficient, the former Vice President’s home energy use surged more than 10%, according to the Tennessee Center for Policy Research.

“A man’s commitment to his beliefs is best measured by what he does behind the closed doors of his own home,” said Drew Johnson, President of the Tennessee Center for Policy Research. “Al Gore is a hypocrite and a fraud when it comes to his commitment to the environment, judging by his home energy consumption.”

In the past year, Gore’s home burned through 213,210 kilowatt-hours (kWh) of electricity, enough to power 232 average American households for a month.

In February 2007, An Inconvenient Truth, a film based on a climate change speech developed by Gore, won an Academy Award for best documentary feature. The next day, the Tennessee Center for Policy Research uncovered that Gore’s Nashville home guzzled 20 times more electricity than the average American household.

After the Tennessee Center for Policy Research exposed Gore’s massive home energy use, the former Vice President scurried to make his home more energy-efficient. Despite adding solar panels, installing a geothermal system, replacing existing light bulbs with more efficient models, and overhauling the home’s windows and ductwork, Gore now consumes more electricity than before the “green” overhaul.

Since taking steps to make his home more environmentally-friendly last June, Gore devours an average of 17,768 kWh per month –1,638 kWh more energy per month than before the renovations – at a cost of $16,533. By comparison, the average American household consumes 11,040 kWh in an entire year, according to the Energy Information Administration. (read more)

Bono, lead singer of the rock band U2, is famous throughout the entertainment industry for being more than just a little self-righteous.

At a recent U2 concert in Glasgow, Scotland, he asked the audience for total quiet.

Then, in the silence, he started to slowly clap his hands, once every few seconds. Holding the audience in total silence, he said into the microphone, 'Every time I clap my hands, a child in Africa dies.'

From the front of the crowd a voice with a broad Scottish accent pierced the quiet ...

'Well, fookin' stop doin it then, ya evil bastard!' [link]

There was a phenomenal build‑up in subsidies in the budget, which are largely responsible for this huge deficit. These subsidies, totaling Rs. 407 billion include; petroleum Rs. 175 billion; electricity Rs. 133 billion; wheat Rs. 40 billion, and textiles and fertilizers Rs. 48 billion, of which only Rs. 114 billion were provided in the budget;

(6) Largely due to an exceptionally high fiscal deficit, balance of payments is facing unprecedented deficit as well. The current account deficit is projected at $ 11.9 billion or 7 % of GDP;

(7) Reserves have declined from a high of $ 16.5 billion in October, 2007 to less than $ 12.3 billion as at end April 2008. This has put pressure on the exchange rate which has depreciated by nearly 6.4 % during July 2007 to April 2008;

(8) Much of the deficit had to be financed from borrowing from the State Bank, which is like printing more money. As much as Rs. 551 billion (up to May 2008) have been borrowed from the central bank, which is unprecedented in country's history. It is not difficult to imagine what this printing of money means. With more money and no new production, only prices are likely to increase, which is what is happening. We have to stop this process otherwise the inflation will be running much higher than what it is at present, and as I noted it is already highest in country's history. [link] (emphasis mine)

The Panties for Peace campaign plays on the regime leaders’ superstitious fear that contact with a woman’s underpants will rob them of their power. Women around the world are asked to post their panties to local Burmese embassies in a bid to strip the regime of its power and bring an end to its gross violations of human rights, especially those committed against Burma’s women. [link]

Deane, I don't know a lot about Sri Lanka. I can see a few problems, though.

From 1/1/02 onwards, LKR depreciation has averaged 2.2% per year. This doesn't sound very good, at a time when inflation has been high. Could this be setting the stage for trouble in the form of a speculative attack and a large depreciation?

When inflation is at 25%, why should citizens hold currency notes or nominal bank deposits? What is the trigger at which dollarisation (or rupeeisation) takes off? When that happens, LKR money supply to GDP will drop, the revenue potential of the inflation tax will go down, and the government will then have to set about building a better fiscal system. But along the way, on this route, things could get very painful.

Either in such a crisis, or ideally before it, the government would have to evaluate a monetary policy reform. This involves rewriting the core legislation governing the central bank, and getting it going afresh. One possibility is to run a currency board - though a currency board to the Indian rupee might make more sense to the extent that Indian GDP probably has a higher correlation with Sri Lankan GDP when compared with the correlation against US GDP.

Are intellectuals in Sri Lanka thinking about these things? They should be. It's better to think through these things ahead of time. Crises are good times to do economic reform - provided fully articulated and well thought out reforms proposals are at hand and can be pressed into service. Else, crises can lead to all sorts of wonky ideas getting used.

I'm totally unsympathetic when central bankers make excuses about inflation not being in their control. Look around the world: There are a lot of countries, all of which are facing the same shocks, but inflation hasn't crossed 5% in lots of them.

There are two kinds of blunders taking place. One class of blunders is the intellectual one - of people who haven't properly figured out monetary economics being placed in roles of running central banks. The other kind of blunder is that of institutional design - of a central bank that is not properly structured to focus on the task of inflation. [link | comments section. we have seen this movie before, Ajay Shah June 7, 2008]

1. The question of why there wouldn't be market-led dollarization in high inflation is something I've thought about earlier. See my comments and LBO's fussbudget's thoughts here. What Ajay is saying is something a like people holding less of Sri Lankan Rupees and more of some other stuff, like foreign currencies. In Zimbabwe, where there's hyperinflation, there's a parallel black market trading in US dollars and other foreign currencies which is keeping the economy there still alive.
   
   
2. Most Sri Lankan economists I've met have long being advocates of Central Bank independence. Some have articulated the need for institutional reform by way of going for a currency board or inflation targeting (discussed towards the end in this post). Most economists seems to be publicly mum on the issue possibly because they don't want to spoil the relationship they have with the Central Bank. I'm just speculating here, but this can be a real possibility given there aren't a lot of think tanks with economists in their payroll in Sri Lanka. I will discuss more CB reform later, although I have said many times it would be impossible to make do without firing Cabraal as governor of the Central Bank.
   
   
3. As we all know the Central Bank of Sri Lanka thinks inflation is a petroleum phenomenon, unfortunately however, they don't articulate this theory very well, they should at least have produced a paper on this by now. Further, CBSL and it's governor have dismissed comparisons with other regional inflation rates as being incomplete because of the different ways they are being measured. While that is certainly true, you cannot possibly account for 20% point difference between Sri Lanka's inflation and say, Singapore's or India's for that matter.
   
   
4. Although there are some NeoKeynesians who still believe in cost-push inflation (Joe Sitglitz for example), not even Stiglitz will not come to the CB's rescue as the Central Bank has managed to sustain high inflation for a longer period of time, whereas Sitglitz beef with Milton's monetarism has to do with inflation at low levels. Bottom line is I know of no credible economist (if stiglitz qualifies as being credible), who's willing to argue that high levels of inflation for a longer period of time is possible without high money supply growth.
   
   
5. Thankfully the central bankers in Sri Lanka seems to be realizing this, although we haven't seen the effects of this recent (reported) monetary tightening reflected in the index just yet. Meanwhile, governor Cabraal keeps on harping that "core inflation" isn't all that high, although that too is about 9.6%.
   
   
6. My revised thoughts on the best institutional reform for Central Banks coming up soon.
   

"I, myself, am a Libertarian," he said. "I don't want big government to infringe on my right to tell other people how to live. [link]

Political theory deals with what is proper or improper for government to do, and government is distinguished from every other group in society as being the institution of organized violence. Libertarianism holds that the only proper role of violence is to defend person and property against violence, that any use of violence that goes beyond such just defense is itself aggressive, unjust, and criminal. Libertarianism, therefore, is a theory which states that everyone should be free of violent invasion, should be free to do as he sees fit, except invade the person or property of another. What a person does with his or her life is vital and important, but is simply irrelevant to libertarianism. [link]

Economic Liberalization still remains, sadly, the dominion of cities amp; certain strata of society within those cities.

So the state is PRETTY MUCH the only opportunity for most young people, especially on the road to becoming young people where most of the education depends on the government. (Think free education policies, no teachers for English amp; Math etc… ;)

While it may not be the exclusive domain of the state, the state is definitely majority stake holder, unless amp; until these economic liberalizations you are talking about trickle down to the majority living without it! (taking my earlier example of education, you have to give them an opportunity that doesn’t cost too much to opt for private education, if the country can’t find enough English teachers for state schools!)

Money is the motivator, but money needs to go to everybody, not be hoarded by a few!

So true, young people are the present, agreed! But where is the present going to get them without a state that can back the initiative? Stopping youth uprisings is going to be quite hard in this context! [link]

Eveything Weerawansa does is patriotic, including having sex with his wife/mistress.

Civilians in the north will be required to obtain Police passes to travel to Colombo or other areas in the south in terms of new measures introduced by the Government. This requirement will apply to those living in the districts of Vavuniya, Mannar, Kilinochchi and Mullaitivu. Those wishing to travel will be required to make a written application to the Police giving reasons for the visit, places where they would stay, the duration and intended date of return. [..]

“The pass system has already come into effect in the four districts,” Vavuniya’s Additional Government Agent S. Charles said yesterday. [..]

A Government official who did not wish to be named, said the new measures were intended to prevent infiltration of Tiger guerrillas into Colombo, its suburbs or other areas in the south. He said the string of recent bomb explosions necessitated the new move. “Now, any person in the north moving around without a valid pass from a Police Station will be liable for questioning or arrest in the south,” he added. [link] (emphasis mine)

A few weeks ago, I read a round of prognostications about $150-a-barrel oil and resolved to test the theory by putting my part of our "economic stimulus" money in oil futures. After all, if the doomsayers are right and we are "running out of oil," then the price has nowhere to go but up. I haven't actually bought the contracts yet--I'll get to why not in a second--but July futures are at $138/barrel right now.

I've often said that you can tell whether prognosticators really believe what they're saying by looking at their portfolios (NB: our portfolio is very equity heavy and consists mostly of index funds; we're playing it by the book). Someone who is genuinely, completely, totally convinced that oil will be $200/barrel in December should act on their wisdom, load up on December crude oil futures (currently $137/barrel), make an absolute killing, and then use the money for whatever they want, like alternative fuel research. [link]

1. First, theres' a tax Petrol (VAT, excise duties, so on)
   Some reports puts the proportion of the tax at about 37% of the total selling price which now stands at Rs.157 at state-owned CPC pumps.
   
   
2. Then the earnings from petrol, subsidize diesel.
   There is no real reason why diesel should cost less, but it does here in Sri Lanka. In some countries in fact, diesel is more expensive. Ironically, the richer sections in Sri Lanka have the diesel vehicles (thanks to a higher import duty on diesel vehicles) while middle and lower income earners who use motorcycles, three-wheelers, small vehicles etc are using petrol therefore subsidizing the rich kids. Some pro-poor policy.
   
   
3. Finally, the Ceylon Petroleum Corporation (CPC) makes a multi-billion rupee loss.
   The burden of which must be financed by the taxpayer -- which is basically everyone who buys anything. From January this year, the CPC has made a loss of about Rs.7 billion (700 Million US$)
   

"Sri Lankan consumers of petroleum products are not only paying for the rise in international prices," Sarvanandan said.

"They are also paying for the bloated bureaucracy, corruption and wastages at the Ceylon Petroleum Corporation. Privatisation of the CPC is long overdue. " [link]

Dallas Alahapperuma revealed last week that the state-run Sri Lanka Transport Board lost 4.0 billion rupees last year, and had 37,000 employees and had 6,000 excess employees at least.

Meanwhile private buses ran at a profit. The state rail service had 17,000 employees, lost 8.5 billion rupees.

Last year Sri Lanka Railways charged ordinary citizens 50 cents a passenger kilometre while state workers were charged only 5 cents a passenger kilometre. Rail workers were charged only 3 cents. [link]

Women are more decent than men.

Fewer women than men itch to lord it over others. Also, women are less willing than men to perform the countless asinine stunts and soul-shriveling pandering necessary to win political office. [link]

"From our population (21 million), there is one public servant for every 17 citizens and that is the world biggest public service sector," public administration minister Karu Jayasuriya said. [..]

The island's public servant to citizen ratio is larger than India's ratio of one to 80 citizens and USA's ratio of one to 240, he said.

"The state sector is too big for a poor country like ours… Some sectors are filled from various appointments given at various instances and for different reasons."

Last year Sri Lanka earned 508 billion rupees in taxes, but 282 billion went for the salaries and pensions of state workers, indicating that 55 cents out of every tax rupee collected went to state workers. [..]

The public sector expenses grew mainly because of hiring of unemployed graduates, new recruitments to the public sector, including the security forces, and payment of allowances.

Sri Lanka also has more than 100 ministers. Jayasuriya himself crossed over from the opposition and helped make the magic number.

Jayasuriya says that despite the overstaffing, the administrative sector in the public service has a dearth of 1,600 employees. [link]

• There are lot of problems in the world - commutable diseases, AIDS, malaria, climate change - it would be great if we can solve all those problems. But we don’t.
  
  
• contrary to the practice many development forums, there should be a focus on solutions to problems, rather than problems themselves. Because at the end of the day it's solutions that matter no matter how grave the problem is.

Many policymakers in emerging economies argue that serious monetary tightening is not warranted: higher inflation, they say, is due solely to spikes in food and energy prices, caused by temporary supply shocks and speculation. Higher interest rates cannot call forth more pigs or grain. They expect inflation to ease later this year as higher prices prompt an increase in supply (food prices have started to edge down over the past month) and as sharp rises in commodity prices drop out of year-on-year comparisons.

Yes, food inflation is likely to slow later this year; but that does not mean rising headline inflation can be ignored. The synchronised jump in global food prices suggests that there is more to the story than disruptions to supply. Prices are also rising partly because loose monetary conditions in emerging economies have boosted domestic demand. These economies have accounted for over 90% of the increase in global consumption of oil and metals since 2002 and for 80% of the rise in demand for grain. This partly reflects long-term structural forces, but it is also the product of a money-fuelled cyclical boom. Peter Morgan, of HSBC, says that the initial shock to food prices may have come from the supply side, but the strength of income and money growth helps to validate higher prices. Were monetary conditions tighter, rises in food prices might be offset by declines elsewhere, keeping inflation under control. [..]

According to conventional wisdom, the monetary-policy mistakes that caused the Great Inflation are much less likely today because central banks are independent of politicians. But unlike the Federal Reserve and the European Central Bank (ECB), many central banks in emerging economies (notably China, India and Russia) are not fully independent. In another echo of the 1970s, they often face intense political pressure to hold rates low to boost growth and jobs.

Emerging economies are also in danger of repeating the blunder of central bankers in the rich world in the 1970s: they focus on core inflation as a reason for holding interest rates below the headline inflation rate. But negative real interest rates then further boost demand, while rising inflation expectations trigger bigger pay claims. Unless central banks tighten their grip soon, inflationary expectations could surge. [link]