07:06 very good afternoon ladies and gentlemen 07:07 07:07 i won 07:08 07:08 uh i warmly welcome all of you for 07:12 07:12 advocating indicator launch 07:15 07:15 a warm 07:43 07:43 um 08:02 08:02 we are having the simultaneous 08:04 08:04 interpretation services so if you need 08:05 08:05 to 08:06 08:06 listen to the same conversation in 08:07 08:07 english or tamil uh you can have that 08:10 08:10 facilities you will get the headsets 08:12 08:12 from our team members 08:13 08:13 uh so why both car indicator and what we 08:17 08:17 are planning to do is the question 08:19 08:19 uh so the the reason why we thought 08:22 08:22 is uh to launch the batkar indicator the 08:24 08:24 cost of living has always been 08:26 08:26 a discussion everyone talks about it uh 08:29 08:29 during new year times during festive 08:32 08:32 times it comes to the limelight 08:34 08:34 but no one really knows how to track it 08:36 08:36 of course there are many other 08:38 08:38 indicators and methodologies but 08:40 08:40 advocate we will 08:42 08:42 give something simplified 08:44 08:44 [Music] 08:46 08:46 there's a there's a gentleman who 08:47 08:47 generally comes to repair a roof 08:51 08:51 somewhat every month so when i asked him 08:53 08:53 about the cost of living 08:54 08:54 on and off i was like 09:01 09:01 so he has this very very nice way of 09:03 09:03 saying it 09:06 09:06 [Music] 09:21 09:21 entire earnings five rupees worth of 09:23 09:23 five thousand but when i get the salary 09:26 09:26 uh five i feel the five thousand rupee 09:28 09:28 is uh 09:29 09:29 just worth like five rupees so uh that's 09:32 09:32 why the cost of living is uh 09:34 09:34 so important to everyone so without 09:36 09:36 taking uh 09:37 09:37 further do i kindly invite nakia shiraz 09:40 09:40 from the advocada research team 09:42 09:42 to take you through the methodology and 09:44 09:44 to introduce the badkar index nathiyao 09:46 09:46 are you 09:48 09:48 thank you uh good afternoon everybody uh 09:51 09:51 it's lovely to see you here in our lunch 09:53 09:53 break uh before we begin the discussion 09:55 09:55 i'd like to quickly go over a few points 09:56 09:56 uh 09:57 09:57 about the bathkari indicator that we've 09:59 09:59 done today um 10:00 10:00 so looking at the indicator 10:04 10:04 right now 10:09 10:09 i like to go over the objective why 10:11 10:11 exactly we 10:12 10:12 wanted to uh present you with about car 10:15 10:15 indicate so this tracker essentially 10:16 10:16 aims to be 10:17 10:17 a simple tool a picture of sorts of how 10:20 10:20 everyday 10:21 10:21 prices would change for food prices 10:23 10:23 would change 10:24 10:24 right and when food prices change 10:27 10:27 essentially if food prices increase it 10:30 10:30 affects everybody 10:31 10:31 food price is something that affects 10:32 10:32 everybody on the day to day in their 10:34 10:34 day-to-day lives their consumption 10:35 10:35 patterns et cetera so we thought there 10:36 10:36 was some 10:37 10:37 that this was a factor that needed to be 10:39 10:39 uh that needed to be highlighted and 10:42 10:42 we want to do this uh to this through 10:44 10:44 this tool so 10:47 10:47 um using this tool our main objective 10:51 10:51 was for it to possibly be um a tool to 10:54 10:54 be 10:55 10:55 able to track policy that the the 10:57 10:57 effects that policies 10:59 10:59 could have on food prices 11:02 11:02 and i think it's also important to note 11:04 11:04 that policies 11:06 11:06 and policy makers should understand that 11:09 11:09 policies have 11:10 11:10 very indirect and direct effects on on 11:14 11:14 multiple things that happen in the 11:16 11:16 economy and 11:18 11:18 if these such policies affect food 11:20 11:20 prices something that is affecting us 11:22 11:22 every day 11:23 11:23 uh it should be something that we look 11:25 11:25 at 11:27 11:27 to quickly go over the methodology of 11:28 11:28 how we actually constructed this 11:30 11:30 um so why bath curry um when many of you 11:34 11:34 are probably wondering why 11:35 11:35 we've named this about curry indicator 11:36 11:36 et cetera so we thought that 11:38 11:38 uh it's something that's representative 11:40 11:40 of any average sri lankan household 11:42 11:42 right you go to you're most likely to 11:45 11:45 have a lunch or most likely to eat some 11:47 11:47 of these uh 11:49 11:49 items during your lunch time and we 11:51 11:51 thought why not 11:52 11:52 make this a representative basket that 11:54 11:54 everybody can relate to 11:56 11:56 so these are the items that we've taken 11:57 11:57 in our calculations 11:59 11:59 uh for the buckeye indicator 12:01 12:01 [Music] 12:03 12:03 where do we get where we get the 12:05 12:05 quantities from 12:07 12:07 we've approximated them using the 12:09 12:09 household income and expenditure survey 12:11 12:11 the most recent one being 2016. uh it 12:14 12:14 kind of 12:14 12:14 it it tells us how much 12:19 12:19 an average household would ideally 12:20 12:20 consume for that particular good 12:23 12:23 and we've used that to approximate uh 12:25 12:25 the quantities to kind of give us a 12:27 12:27 better understanding 2021. 12:30 12:30 uh you can also 12:33 12:33 you can also check everything that i've 12:35 12:35 said and the methodology and the exact 12:36 12:36 details on the website that's all there 12:38 12:38 for you 12:39 12:39 to go through if you want and thank you 12:42 12:42 thank you for your time and i think we 12:44 12:44 can start the discussion 13:05 13:05 um 13:35 13:35 [Music] 13:57 13:57 [Music] 14:40 14:40 [Music] 15:11 15:11 is 15:35 15:35 [Music] 16:08 16:08 [Music] 16:53 16:53 invite so we have a panel discussion to 16:54 16:54 talk about this move and of course 16:56 16:56 after that we all can enjoy the same bad 16:59 16:59 curry i would say with some additional 17:01 17:01 items 17:02 17:02 also outside and we have kept the price 17:04 17:04 list as well so you can see 17:06 17:06 how the prices have moved over time and 17:08 17:08 uh 17:09 17:09 how uh the bad curry the cost of your 17:11 17:11 bath curry is going to be 17:13 17:13 uh in in probably we can track it how it 17:16 17:16 has been changed over a period of time 17:18 17:18 with that i accordingly invite anita 17:20 17:20 varus 17:21 17:21 on anita varsivitarana our research 17:23 17:23 manager of advocate 17:25 17:25 to moderate the panel discussion anita 17:28 17:28 oreo 17:28 17:28 thank you so i'd like to briefly 17:31 17:31 introduce our 17:32 17:32 panelists with us today we have deshale 17:35 17:35 de mel rehana taufique and nikiya shiraz 17:38 17:38 deshal dimel is an economist with 17:40 17:40 experience across government private 17:41 17:41 sector and academia 17:43 17:43 a few highlights of his career would be 17:45 17:45 serving as economic advisor to the 17:47 17:47 minister of finance from 2017 to 17:49 17:49 2019 and leading negotiations on trade 17:52 17:52 and services as a member of the national 17:54 17:54 trade negotiation committee for sri 17:56 17:56 lanka's first bilateral trade and 17:57 17:57 services agreement with singapore 17:59 17:59 rihanna tauffik is an economic 18:01 18:01 researcher by profession 18:03 18:03 and a frequent blogger her article the 18:06 18:06 big sri lankan breakfast index may be 18:08 18:08 something that you would have read in 18:09 18:09 the papers a few weeks ago 18:11 18:11 she has a msc in economics from the 18:13 18:13 university of warwick and a bsc in 18:14 18:14 mathematics and economics from the 18:16 18:16 university of london 18:17 18:17 she has previously worked at both verite 18:19 18:19 research and the institute of health 18:20 18:20 policy and presently works for a u.s 18:23 18:23 based food technology company 18:25 18:25 nakia shiraz is a research executive at 18:28 18:28 the advocate institute 18:29 18:29 she has a bsc in economics and 18:31 18:31 industrial organization from the 18:33 18:33 university of warwick 18:34 18:34 and her current work focuses on 18:37 18:37 international trade theory and tax 18:38 18:38 policy 18:39 18:39 while her research interests are in 18:41 18:41 international trade public finance and 18:43 18:43 public policy 18:45 18:45 uh so without further further ado let's 18:47 18:47 uh start this discussion 18:49 18:49 um sudeshal if you could kind of kick us 18:51 18:51 off by 18:52 18:52 telling us a little bit about how you 18:54 18:54 started this index because 18:55 18:55 this was really something that i believe 18:58 18:58 you thought of about 18:59 18:59 10 years ago and and so about 10 years 19:02 19:02 ago you felt that this was something 19:04 19:04 worth 19:04 19:04 tracking worth worth putting in some 19:06 19:06 time in uh could you could you speak a 19:07 19:07 little bit about that yeah thanks anita 19:09 19:09 thanks to kata for the invitation to be 19:12 19:12 on the panel today 19:13 19:13 um yeah i think it was it's going 19:15 19:15 through my emails when we're discussing 19:16 19:16 this and i 19:17 19:17 found it was 2011 when i first brought 19:18 19:18 to dean talking about this bad curry 19:20 19:20 index and then we spoke about it again 19:22 19:22 five years later in 2016 saying that hey 19:24 19:24 you know we should get this going 19:26 19:26 and five years later 2021 we have 19:28 19:28 actually got it going so it's kind of 19:29 19:29 been like an election probably you know 19:30 19:30 you talk about it every five years but 19:32 19:32 finally it has come to uh it has come to 19:34 19:34 be um but i mean yeah 19:35 19:35 it's the the idea was kind of similar to 19:37 19:37 what ghana was referring to earlier the 19:40 19:40 the fact that in sri lanka um often 19:42 19:42 times um 19:44 19:44 what what people what people generally 19:46 19:46 refer to with regard the biggest issue 19:48 19:48 with people for the economy or 19:49 19:49 with regard to the economy for people is 19:52 19:52 uh gina via them about 19:53 19:53 miller right and oftentimes that seems 19:56 19:56 to be at odds with the the formal 19:58 19:58 inflation indicators uh so inflation in 19:60 19:60 sri lanka has been for the last 20:02 20:02 12 years at single digit level right so 20:04 20:04 before 2009 we had double digit 20:05 20:05 inflation 20:06 20:06 but from the last 12 years it's been a 20:08 20:08 single digit in uh single digit levels 20:09 20:09 but still 20:10 20:10 people still constantly have a lot of 20:12 20:12 concerns about 20:13 20:13 uh gmd they have about and so on so at 20:16 20:16 that time also that same idea was there 20:18 20:18 that we need to fight would be great if 20:19 20:19 you can find something that 20:21 20:21 can give a little bit of meat or a bit 20:22 20:22 of quantification to this concept of 20:24 20:24 german rhythm or or bottom line this was 20:27 20:27 a fairly simple way of doing it 20:29 20:29 i mean it's it's similar to the way that 20:32 20:32 the big mac index by the economist 20:33 20:33 magazine is able to give purchasing 20:36 20:36 power parity in a very 20:37 20:37 simplistic but easy to relatable manner 20:40 20:40 i felt that this is something that can 20:42 20:42 help sri lankans to understand what is 20:44 20:44 the actual cost of 20:46 20:46 your packet of price um and you know 20:49 20:49 what goes into it and that can be 20:50 20:50 just like a more tangible way to uh to 20:53 20:53 address the 20:54 20:54 the whole issue of uh given great 20:57 20:57 um so we also have rihanna tawfiq with 20:60 20:60 us who 21:01 21:01 published an article recently in the 21:02 21:02 papers on something very similar the 21:05 21:05 big sri lankan breakfast index rihanna 21:07 21:07 could you tell 21:08 21:08 us a little bit more about this and what 21:11 21:11 your findings were 21:12 21:12 sure thanks so with the breakfast index 21:16 21:16 big sri lankan breakfast index i had 21:18 21:18 basically two 21:20 21:20 goals in mind one was to come up with 21:23 21:23 an easier way a more relatable way to 21:25 21:25 understand the cost of living the cost 21:27 21:27 of food in sri lanka 21:29 21:29 and second i wanted to investigate the 21:31 21:31 merit behind 21:33 21:33 you know how politicians generally use 21:35 21:35 the cost of living and the price of 21:36 21:36 like price of vegetables price of rice 21:38 21:38 as a hook 21:39 21:39 in their campaigning so i actually 21:41 21:41 wanted to investigate the merit behind 21:44 21:44 that concept or that trick 21:47 21:47 so my big sri lankan breakfast index 21:49 21:49 basically 21:50 21:50 documents how much it costs for a family 21:54 21:54 of four to five people 21:55 21:55 to have the breakfast combination of 21:58 21:58 like a chicken curry a party poo 22:01 22:01 poo sambal and bread and i document it 22:05 22:05 over i have 22:06 22:06 i use data from 2012 annual data from 22:08 22:08 2012 to 22:10 22:10 2019 and then 2020 thankfully i also 22:13 22:13 have 22:14 22:14 weekly data um would you like me to talk 22:17 22:17 about 22:18 22:18 the findings so what i basically found 22:21 22:21 with 22:22 22:22 uh let's say 2020 which was um you know 22:24 22:24 weird year for everybody 22:26 22:26 thankfully there was weekly data as well 22:28 22:28 so what i found was that 22:31 22:31 uh from the from the start of 2020 22:34 22:34 till the end of 2020 my breakfast index 22:38 22:38 had inflated by 22:39 22:39 22 percent but when you come when you 22:42 22:42 look at the 22:44 22:44 uh the the ccpi and the uh 22:47 22:47 food inflation that's documented in that 22:49 22:49 basket of goods it's around 11 percent 22:52 22:52 so my basket of goods was almost double 22:54 22:54 that 22:55 22:55 and when i looked at the annual data 22:58 22:58 from 2012 22:59 22:59 to um 2000 basically 2020 23:03 23:03 and this there has been like obviously 23:05 23:05 there's been like a suck 23:07 23:07 like different governments throughout 23:08 23:08 that entire period but what's 23:10 23:10 really like stood out was that the cost 23:12 23:12 of 23:13 23:13 this basket of goods has increased it 23:15 23:15 has not come down 23:17 23:17 so um those were my broad findings yes 23:21 23:21 thank you rihanna that's very 23:22 23:22 interesting and on that note i'd like to 23:25 23:25 um nakia's so nokia you do you did the 23:28 23:28 work on the indicator from 23:30 23:30 advocate's side and one 23:33 23:33 one kind of difference we see is that 23:35 23:35 what we're putting out is an indicator 23:37 23:37 not an index 23:38 23:38 uh could you speak a little bit about 23:40 23:40 that um 23:41 23:41 why why is this the case uh sure yeah of 23:43 23:43 course anita first i'd like to say 23:45 23:45 a thank you to uh deshaw for all his 23:47 23:47 help uh with the bachari indicator 23:50 23:50 and i think we had the discussion about 23:52 23:52 calling this an uh 23:53 23:53 index a few times and the main reason 23:55 23:55 why we went ahead with an indicator 23:57 23:57 uh was the fact that we wanted it to be 24:00 24:00 a simple tool to be able to track 24:02 24:02 uh the effects that policies could have 24:04 24:04 on food prices something that 24:06 24:06 affects everyone and with uh 24:09 24:09 our indicator that we have right now it 24:11 24:11 is still possible to do 24:12 24:12 uh something like that we can still see 24:14 24:14 prices changing 24:15 24:15 um if uh if they're affected by certain 24:19 24:19 seasonal changes if they're affected by 24:20 24:20 policy we can still track that 24:23 24:23 so we felt that indicator was still a 24:26 24:26 good 24:27 24:27 option to go ahead with and 24:30 24:30 the second reason was more of a 24:31 24:31 technical um 24:34 24:34 uh reason that we had for calling this 24:36 24:36 an indicator and it was uh 24:38 24:38 uh basic um what base would we use um 24:42 24:42 if you were calling this an index 24:43 24:43 because you'd have to make sure that the 24:44 24:44 base year would 24:45 24:45 have to essentially be relatively free 24:48 24:48 from like external biases to make sure 24:50 24:50 that 24:50 24:50 the tracking process is fairly not 24:52 24:52 biased um 24:54 24:54 if we are using a base here how often 24:55 24:55 would we change it to like account for 24:57 24:57 like changing consumer patterns 24:60 24:60 etc and also the weightage how would we 25:02 25:02 eat it etc 25:03 25:03 and all these things are um things that 25:06 25:06 we talked about and that we have 25:07 25:07 solutions for 25:08 25:08 and an index is possibly a 25:12 25:12 tool that we could also do in the future 25:14 25:14 if 25:15 25:15 we need to great so one thing that kind 25:19 25:19 of came out in the initial discussion 25:20 25:20 that you made was 25:22 25:22 that we're thinking of the indicator as 25:24 25:24 as a tool for policy makers 25:26 25:26 and rihanna this was something that i i 25:28 25:28 felt came out of your 25:30 25:30 uh index as well um uh 25:33 25:33 something that seemed to be highlighted 25:34 25:34 in your article was was the impact of 25:36 25:36 price controls 25:37 25:37 uh could you speak briefly on that sure 25:40 25:40 so in my index i use data from the 25:43 25:43 department of sensors and statistics 25:45 25:45 they publish 25:45 25:45 annual and for the past couple of years 25:48 25:48 they 25:49 25:49 uh also publish the weekly data so they 25:52 25:52 collect data from 25:53 25:53 retail markets in colombo a couple of 25:56 25:56 retail markets and 25:58 25:58 for the annual data they collect from 26:00 26:00 around the country 26:02 26:02 um so in the when i was looking at 2020 26:05 26:05 which is uh the year that the turmeric 26:07 26:07 ban 26:07 26:07 came into effect and that was like a 26:09 26:09 really hot topic 26:11 26:11 so when i was collating the data what i 26:13 26:13 realized was 26:14 26:14 that um in some periods data was not 26:17 26:17 available 26:18 26:18 so this item was not available in the 26:21 26:21 markets 26:22 26:22 and similarly with like satan fish or 26:26 26:26 dal some of these items are not 26:28 26:28 available during 26:29 26:29 during the gathered periods um so what i 26:32 26:32 realized was that 26:34 26:34 um like 26:37 26:37 and also when some prices like are 26:40 26:40 gathered 26:41 26:41 the data says that it's higher than the 26:42 26:42 gaza price so that was 26:44 26:44 rather strange because i mean this is a 26:47 26:47 government organization that's 26:48 26:48 collecting the data 26:49 26:49 and it's a government that's 26:51 26:51 implementing these gadget prices but 26:52 26:52 there's 26:53 26:53 doesn't seem to be like a link between 26:55 26:55 uh the two 26:56 26:56 uh you know the agencies 26:60 26:60 so um i think in like in a sri lankan 27:02 27:02 context where 27:03 27:03 a lot of the a lot of the times 27:05 27:05 producers and manufacturers of 27:08 27:08 essential items like rice and like say 27:11 27:11 dal 27:12 27:12 they operate in kind of a monopolistic 27:15 27:15 or rather like a cartel like environment 27:18 27:18 so they actually have the uh 27:20 27:20 the capacity to almost hold consumers 27:24 27:24 hostage and they there's no obligation 27:26 27:26 for them to 27:27 27:27 provide um the 27:30 27:30 these essential goods at those gadgeted 27:34 27:34 so i think that's what i uh you know 27:36 27:36 came across in my 27:37 27:37 uh analysis and uh 27:41 27:41 yes so thank you rihanna so that's very 27:44 27:44 interesting 27:44 27:44 especially the note you made that i mean 27:46 27:46 it's both both organized both institutes 27:48 27:48 are government 27:49 27:49 right the government is mandating the 27:51 27:51 price control and the government is 27:53 27:53 recording the data 27:54 27:54 um i mean so i think this this really 27:57 27:57 highlights the the need 27:58 27:58 for for policy makers to be able to see 28:02 28:02 the impact of that decision 28:03 28:03 and to be able to evaluate whether you 28:05 28:05 know a decision they have taken is 28:07 28:07 actually working is it what is the 28:08 28:08 impact it's having um 28:10 28:10 so thank you that's very interesting 28:12 28:12 finding yes and i think the policies are 28:14 28:14 not really 28:15 28:15 consumer-centric although maybe like 28:17 28:17 they think it is but it's not really 28:19 28:19 consumer-centric 28:20 28:20 because what we see is that the 28:22 28:22 government is basically encouraging 28:24 28:24 rent-seeking behavior and it's similar 28:27 28:27 with 28:27 28:27 like say the the latest hot topic the 28:30 28:30 sugar tax 28:31 28:31 sugar right so uh i actually looked at 28:34 28:34 the data 28:35 28:35 for weekly data for sugar as well 28:38 28:38 and despite the taxation tax coming down 28:42 28:42 from 50 rupees a kilo to 25 28:44 28:44 cents the retail price fell very 28:47 28:47 marginally 28:48 28:48 so again it's not the consumer who's 28:51 28:51 making the benefit 28:52 28:52 actually the consumer is not affected 28:55 28:55 right 28:56 28:56 that's uh that's very interesting to 28:58 28:58 hear as well on the tax side 28:60 28:60 um that you can when looking at prices 29:02 29:02 you're able to see their final impact on 29:04 29:04 the consumer's perspective and 29:06 29:06 i mean for a policy maker that would be 29:07 29:07 very interesting because consumers are 29:09 29:09 at the end of the day at that water base 29:11 29:11 uh so 29:11 29:11 to see the net the the the net impact 29:13 29:13 your decisions are making on your voters 29:16 29:16 would be something that hopefully um 29:18 29:18 policy makers would want to take into 29:20 29:20 consideration 29:21 29:21 um so uh moving from that 29:24 29:24 uh so to this 29:27 29:27 i'd like to ask if you could explain a 29:30 29:30 little bit more on how 29:32 29:32 like trade and other policy decisions 29:34 29:34 will have an effect on prices because i 29:36 29:36 feel like 29:37 29:37 we when it comes to like very direct 29:40 29:40 changes like a price control 29:41 29:41 or uh tax removal we can see we 29:44 29:44 intuitively understand that there will 29:46 29:46 be an impact on prices although 29:48 29:48 clearly the change is not what we might 29:50 29:50 expect um 29:51 29:51 but moving beyond that to more broader 29:54 29:54 policy 29:54 29:54 how do you see that impacting prices 29:57 29:57 sure i mean again if you look at 29:58 29:58 um 2020 when we had restrictions on 30:01 30:01 quite a few 30:02 30:02 imports um that has a very clear and 30:05 30:05 direct impact on pricing right so 30:07 30:07 when you have if you say for good you 30:09 30:09 have both imported 30:10 30:10 imported supply and domestic supply you 30:12 30:12 take out 30:13 30:13 the imported component of that then your 30:14 30:14 overall supply comes down 30:16 30:16 and if your demand stays the same that 30:17 30:17 means your price is obviously going to 30:19 30:19 go up right so 30:20 30:20 in the immediate short term you will 30:21 30:21 naturally have an increase in price of a 30:23 30:23 good where you have a restriction on 30:24 30:24 imports 30:25 30:25 um in the medium term if your domestic 30:28 30:28 supply can increase 30:29 30:29 to um to to compensate for the decline 30:32 30:32 in the imported 30:33 30:33 the imported supply then that price can 30:35 30:35 normalize and come back 30:36 30:36 down to uh where it was previously but 30:39 30:39 that again depends on the cost of 30:40 30:40 production of the domestic product 30:42 30:42 compared to the imported product 30:43 30:43 so if your cost of production for the 30:45 30:45 domestic product is higher than your 30:47 30:47 imported product 30:48 30:48 then that will translate into a 30:49 30:49 permanent increase in price for the 30:50 30:50 consumer 30:51 30:51 right so typically what will happen what 30:53 30:53 happens in uh 30:54 30:54 in sri lanka and in other countries as 30:56 30:56 well is that the 30:57 30:57 the government will if it wants to 30:59 30:59 protect a particular domestic 31:01 31:01 industry it'll impose a tax to 31:04 31:04 effectively match the difference between 31:05 31:05 your imported price and your 31:07 31:07 um and your domestic price um so that 31:10 31:10 way 31:10 31:10 that way your the the domestic producer 31:13 31:13 is artificially kept 31:14 31:14 uh kept more competitive um and 31:17 31:17 this so it does obviously has a 31:19 31:19 beneficial impact for domestic producers 31:21 31:21 but it does have uh it does mean that 31:23 31:23 your consumers 20 million consumers 31:25 31:25 are paying a permanently higher price on 31:27 31:27 on those products so 31:28 31:28 i think that is the most the most direct 31:30 31:30 way in which um 31:32 31:32 new trade policy has an implication on 31:34 31:34 on prices in 31:35 31:35 particular in this kind of country so 31:37 31:37 there's a number of uh 31:39 31:39 agricultural products which are which 31:40 31:40 have fair amount of protection 31:43 31:43 we see the same in construction material 31:45 31:45 as well there's a lot of 31:47 31:47 protective tariffs that are imposed on 31:48 31:48 construction material in order to 31:50 31:50 protect domestic producers 31:51 31:51 but that means that there's the 31:52 31:52 construct for a power 31:54 31:54 for a family to construct a house your 31:56 31:56 price goes up or hotel to 31:58 31:58 for a tourism company to set up a hotel 31:59 31:59 your price goes up which means your 32:01 32:01 prices that you that you sell to the 32:03 32:03 tourists will also be higher so your 32:04 32:04 competitiveness gets eroded that way as 32:06 32:06 well 32:06 32:06 so there are a number of implications of 32:09 32:09 um 32:10 32:10 of of import controls or trade policy 32:13 32:13 implications on prices and domestic 32:15 32:15 economy 32:16 32:16 thank you desha um so uh nikia if you 32:20 32:20 could speak a little bit now so what 32:22 32:22 we're hearing uh from 32:24 32:24 our two panelists is that there are 32:27 32:27 there's a significant number of 32:29 32:29 decisions that will have an 32:31 32:31 impact on prices at the end of the day 32:32 32:32 so from the perspective of 32:34 32:34 uh putting out this indicator making it 32:36 32:36 publicly available 32:38 32:38 um why should a concerned citizen 32:41 32:41 why should a researcher why should a 32:43 32:43 policy maker be interested in this 32:45 32:45 indicator what what is what 32:46 32:46 why should anyone go to that website 32:48 32:48 sure that's a good 32:50 32:50 question um and i'd like to start off 32:52 32:52 with saying that the indicator 32:54 32:54 is telling us about the price changes of 32:56 32:56 our daily meals 32:58 32:58 right so it it affects affordability on 33:01 33:01 the day-to-day lives of people it 33:02 33:02 affects how people can afford to buy the 33:04 33:04 food that they need 33:05 33:05 um so and also according to the 33:08 33:08 household and income expenditure survey 33:10 33:10 around 35 of an average household 33:13 33:13 they'll spend around 35 of their 33:15 33:15 expenditure on food 33:17 33:17 and this is a fairly big amount of 33:20 33:20 expenditure on on food 33:21 33:21 so um and also and like um 33:24 33:24 rihanna also mentioned uh and we also 33:27 33:27 want to kind of highlight 33:28 33:28 is the fact that um that this would 33:31 33:31 that this could potentially act as a 33:33 33:33 tool to kind of see 33:34 33:34 policies as they come into effect um and 33:37 33:37 see the effects that they could 33:38 33:38 potentially have on food prices 33:40 33:40 um whether they are indirect or die in 33:43 33:43 indirect effects because um 33:45 33:45 there are no hard effects um and that's 33:48 33:48 something that needs to be uh 33:49 33:49 highlighted i think 33:50 33:50 thank you so especially like i think 33:52 33:52 there has been a lot of discussion 33:53 33:53 happening about 33:54 33:54 um on the agricultural and uh creating 33:57 33:57 food self-sufficiency 33:59 33:59 um so it would be interesting to see 34:01 34:01 what the 34:02 34:02 actual impact of these decisions are on 34:05 34:05 the on the day-to-day prices 34:06 34:06 of of your rice and curry um 34:10 34:10 so before we open the floor for 34:12 34:12 questions 34:13 34:13 uh rihanna an interesting thing that i 34:16 34:16 noticed in your article was 34:17 34:17 that you also covered the period of 34:19 34:19 lockdown um 34:20 34:20 and you had a few kind of findings on 34:23 34:23 that especially on the side of like 34:24 34:24 import restrictions that 34:25 34:25 shall mention do you see an alignment 34:28 34:28 with the 34:29 34:29 with what was discussed here and your 34:30 34:30 findings in the 34:32 34:32 breakfast index yes of course uh so like 34:35 34:35 in my opinion 34:36 34:36 the very recent import restrictions are 34:38 34:38 more than just to prevent uh 34:40 34:40 for like protectionist policies right 34:42 34:42 they're mainly like a 34:43 34:43 looks like a monetary policy kind of 34:45 34:45 decision uh but if we take the terminic 34:48 34:48 ban 34:48 34:48 which uh was apparently to help domestic 34:51 34:51 production 34:52 34:52 so that came into effect 15 months ago 34:55 34:55 so at that time a kilo of turmeric was 34:58 34:58 715 rupees right 34:60 34:60 so now 15 months later a kilo of 35:02 35:02 turmeric is 2 35:03 35:03 400 rupees so that's three times the 35:06 35:06 price 35:06 35:06 um so if it is for protectionist 35:11 35:11 reasons what is the effect on the 35:13 35:13 consumer is it the consumer who's 35:16 35:16 you know taking the bearing the brunt of 35:18 35:18 this 35:19 35:19 policy decision and in the first week of 35:22 35:22 2020 the breakfast index um so that's 35:25 35:25 the start of 35:26 35:26 january when sri lanka was not in 35:28 35:28 lockdown 35:29 35:29 coronavirus was just a buzzword at the 35:32 35:32 time 35:33 35:33 and it stood at 565 rupees 35:36 35:36 right and in the last week of 2020 35:39 35:39 december 35:40 35:40 it was 678 rupees so that's 35:43 35:43 an increase of about 120 um 35:46 35:46 rupees a meal right so of course this is 35:50 35:50 like 35:50 35:50 a very over simplified extrapolation but 35:53 35:53 if you go by that 35:54 35:54 um that figure that means a family would 35:57 35:57 need 35:58 35:58 about 10 000 rupees extra 36:01 36:01 to you know keep maintaining their food 36:04 36:04 habits 36:06 36:06 and this is not really practical 36:08 36:08 considering that sri lanka is not 36:10 36:10 at full capacity tourism is you know 36:13 36:13 barely opening up and 36:15 36:15 i think they're projecting like probably 36:17 36:17 end of the year that it might be back at 36:19 36:19 you know normal capacity uh so i think 36:22 36:22 with 36:22 36:22 the uh obviously with lockdowns and as 36:25 36:25 dasha said 36:26 36:26 we have to expect some you know price 36:29 36:29 increase because there was a disruption 36:30 36:30 on 36:31 36:31 supply chains but i think uh in sri 36:34 36:34 lanka it's 36:35 36:35 it's it's much more than just kovid now 36:38 36:38 because the overall macroeconomic 36:40 36:40 situation 36:41 36:41 with you know the death situation and 36:43 36:43 foreign exchange crisis so 36:45 36:45 i i think it has a lot more impact than 36:49 36:49 purely these supply chain um you know 36:51 36:51 disruptions 36:52 36:52 and also it's a bit worrying because i 36:54 36:54 was reading the 36:55 36:55 um the fao their state of uh 36:59 36:59 state of food security and nutrition in 37:01 37:01 sri lanka so they actually say that 37:03 37:03 about 37:03 37:03 53 percent of sri lanka's population 37:07 37:07 are not able to afford what they call a 37:10 37:10 healthy diet 37:11 37:11 right so that's a huge number and that's 37:14 37:14 a big issue if you're talking about cost 37:15 37:15 of living 37:16 37:16 uh you know is sri lanka okay we may be 37:19 37:19 you know food secure but are we 37:20 37:20 nutrition secure and sri lanka has 37:23 37:23 historically had really high 37:25 37:25 malnutrition rates among young children 37:28 37:28 about 37:28 37:28 like 17 percent of kids under 5 years 37:31 37:31 are stunted which means that they are 37:33 37:33 not 37:34 37:34 the hype that they should be and about 37:36 37:36 another 15 percent 37:37 37:37 are wasted which means they're not they 37:39 37:39 don't have the muscle mass that they 37:40 37:40 should be 37:41 37:41 so really i think when it comes to trade 37:44 37:44 policy 37:46 37:46 when it comes to uh you know like 37:49 37:49 cross-cutting policies we need to focus 37:51 37:51 on what is the 37:52 37:52 overall objective if it it has to be to 37:55 37:55 improve the health 37:56 37:56 of consumers and the health of sri 37:59 37:59 lankans because otherwise 38:00 38:00 it's you know where are we going right 38:04 38:04 thank you um so now i'd like to open the 38:07 38:07 floor for questions from our audience 38:09 38:09 we have an in-person audience as well as 38:12 38:12 an audience online 38:14 38:14 um so if anyone would like to start the 38:16 38:16 discussion 38:17 38:17 yes let's get travia mike 38:31 38:31 yes uh thank you i think uh i think 38:34 38:34 that's very 38:36 38:36 informative uh i believe from when i 38:38 38:38 just look at the chart 38:40 38:40 if i'm reading it correctly i think that 38:42 38:42 also shows something like a 10 38:45 38:45 increase in prices over last year's i 38:48 38:48 think 38:49 38:49 uh rihanna's index showed about 20 38:52 38:52 different 38:53 38:53 but i think one aspect that may be worth 38:56 38:56 emphasizing 38:57 38:57 impact of the pandemic on incomes if job 38:60 38:60 losses 39:01 39:01 uh we've seen income losses amongst the 39:03 39:03 informal sector 39:05 39:05 i don't know if you have looked at any 39:08 39:08 of 39:08 39:08 how badly people have been 39:12 39:12 affected in terms of the pandemic in 39:14 39:14 this way in terms of 39:16 39:16 income and in that context 39:19 39:19 the rising prices of food 39:22 39:22 whether you've looked at those 39:26 39:26 randomly would anyone like to tackle 39:29 39:29 that 39:30 39:30 michelle um i don't i don't have the so 39:32 39:32 i know that in terms of um 39:35 39:35 in terms of unemployment up to q3 39:37 39:37 unemployment reached 5.8 39:39 39:39 right so there was an increase in the um 39:41 39:41 in the number of people who are 39:42 39:42 unemployed and also the labor force 39:44 39:44 participation declined 39:45 39:45 to some extent as well um we don't have 39:48 39:48 uh 39:49 39:49 we don't have that much data in terms of 39:50 39:50 the actual income levels in uh 39:52 39:52 i think typically the hies is the the 39:54 39:54 best source for that and that is a three 39:56 39:56 yearly service so that we haven't got 39:57 39:57 the latest for that 39:58 39:58 uh but i think you're right in terms of 39:60 40:00 it's a it's effectively a double whammy 40:02 40:02 right because you obviously have a 40:03 40:03 negative shock in from a income 40:05 40:05 perspective and a shock in terms of 40:07 40:07 um in terms of your the costs of 40:10 40:10 essential or number of essential 40:11 40:11 products 40:12 40:12 uh i mean just to add to that i think we 40:15 40:15 shouldn't be seeing this as a kind of a 40:17 40:17 a substitute for an inflation index 40:20 40:20 right because obviously the inflation is 40:21 40:21 inflation index has to capture a far 40:23 40:23 broader 40:24 40:24 far broader set of products so this is 40:26 40:26 really kind of a snapshot of a 40:28 40:28 a very significantly important subset of 40:30 40:30 that but i think it becomes 40:32 40:32 particularly interesting because 40:34 40:34 inflation 40:35 40:35 if you forgot to say cpi um a lot of the 40:38 40:38 the 40:38 40:38 components of that are not really market 40:40 40:40 driven so if you take 40:42 40:42 within fuji surf there are a number of 40:43 40:43 market uh 40:45 40:45 number of controlled items but beyond 40:46 40:46 that about 32 40:48 40:48 of the ccpi is 40:51 40:51 water gas electricity and housing um 40:54 40:54 and full so fuel prices we know our 40:56 40:56 control electricity water not market 40:58 40:58 driven 40:59 40:59 uh so all of those are do not not really 41:02 41:02 move in line with actual 41:04 41:04 uh shifts in prices so i think that's 41:05 41:05 why an index or indicator of this nature 41:08 41:08 gives us a 41:09 41:09 kind of a different way of looking at uh 41:11 41:11 pricing that is useful to kind of 41:13 41:13 complete the picture 41:14 41:14 thank you uh just yeah i think we have a 41:17 41:17 question over here 41:18 41:18 if we can get a mic 41:55 41:55 the breakfast index has four 41:58 41:58 items that's chicken curry poulsamble 42:02 42:02 and bread 42:03 42:03 so the chicken curry would include items 42:05 42:05 like chicken and the coconut milk and 42:08 42:08 you know the other spices and stuff and 42:10 42:10 the parikh also similar 42:12 42:12 so as i said it was it's a very over 42:15 42:15 simplified 42:16 42:16 extrapolation but just from 20 42:19 42:19 start of 2020 when it was 565 rupees 42:24 42:24 and at the end of 2020 it is 674 rupees 42:30 42:30 so that's 42:30 42:30 almost like 120 something increase so 42:33 42:33 that is just for one meal 42:35 42:35 for a family right the breakfast index 42:37 42:37 is just one meal 42:38 42:38 so if it if you uh you know 42:41 42:41 just the triple that by three square 42:44 42:44 meals and then take the monthly 42:46 42:46 uh dc it comes to about ten thousand 42:48 42:48 rupees 42:49 42:49 but that's a very over simplified but i 42:51 42:51 think it's in the right direction 43:11 43:11 foreign 43:25 43:25 organization united nations organization 43:29 43:29 uh state of food security and nutrition 43:32 43:32 around the world 43:36 43:36 they track it over like a period of time 43:39 43:39 so in that they have 43:40 43:40 come up with regional based 43:44 43:44 food food and dietary guidelines 43:48 43:48 uh that's based on eat landsat you know 43:52 43:52 recommendations so based on that what 43:55 43:55 they say is that 43:56 43:56 you know there's a like a starch content 43:57 43:57 that people have to get 43:59 43:59 there's a protein intake uh there is 44:02 44:02 like 44:02 44:02 you know other vitamins so based on that 44:05 44:05 what they say is that 44:06 44:06 50 percent of sri lanka's population 44:09 44:09 cannot afford to have 44:11 44:11 that kind of healthy diet yes thank you 44:14 44:14 i think we have a question 44:16 44:16 from over here 44:23 44:23 can i just i'd like to contribute to the 44:25 44:25 previous question as well 44:26 44:26 so i think with the income loss what 44:30 44:30 obviously comes to our minds is okay you 44:32 44:32 can substitute certain items away and 44:35 44:35 go for cheaper products but i think like 44:38 44:38 say this basket of goods that's been 44:40 44:40 used in the bhaktari index and even in 44:42 44:42 my index 44:44 44:44 are not really luxury items right these 44:46 44:46 are everyday 44:47 44:47 essential items and these are necessary 44:49 44:49 to have a nutritious diet 44:51 44:51 so is it really fair for us like or is 44:54 44:54 it really fair for policy makers to 44:56 44:56 expect people 44:57 44:57 to substitute away from these items and 44:60 45:00 go for 45:01 45:01 what's called cheaper products so i just 45:03 45:03 like to you know float that 45:04 45:04 thank you i think we have a question for 45:07 45:07 you um 45:08 45:08 i have picked up a few buzz words 45:12 45:12 from what you have discussed just now 45:15 45:15 bread was one of them not 45:18 45:18 come down was another not available was 45:22 45:22 another 45:25 45:25 price reduction was another now 45:28 45:28 taking those words into consideration 45:32 45:32 when 45:33 45:33 has ever been a reduction in prices for 45:36 45:36 food 45:37 45:37 that has never been so so i think all 45:40 45:40 you all are dreaming 45:41 45:41 you think that there's going to be a 45:42 45:42 price reduction in food and whatever you 45:44 45:44 may say in here 45:45 45:45 or discuss here will never happen 45:49 45:49 the other thing is production which is 45:51 45:51 very important 45:53 45:53 now how much of production have we done 45:55 45:55 now can we 45:56 45:56 be self-sufficient in what we produce 45:60 45:60 for the population in our country have 46:02 46:02 you looked at that 46:04 46:04 i don't think so now based on all 46:07 46:07 on those aspects of it could we have 46:10 46:10 answers to that question 46:15 46:15 so in terms of in terms of process you 46:18 46:18 do have some seasonality as well right 46:19 46:19 so if you look at typically 46:21 46:21 between november and february prices 46:24 46:24 tend to increase 46:25 46:25 and then they come down uh they come 46:26 46:26 down at some point we saw that last year 46:28 46:28 we've seen that this year also 46:30 46:30 the seasonality is one important factor 46:32 46:32 to keep in mind the second factor to 46:33 46:33 keep in mind is the impact of policies 46:35 46:35 so you do have so for instance the you 46:38 46:38 do have taxes that can be imposed on 46:40 46:40 on food items and those taxes can be 46:42 46:42 removed from food items as well 46:44 46:44 uh so that is something that there is a 46:46 46:46 control of in terms of the actual 46:48 46:48 uh in terms of the actual price of the 46:49 46:49 product so it is not entirely 46:52 46:52 outside the realm of possibility that 46:53 46:53 certain prices can reduce and increase 46:56 46:56 over time 46:56 46:56 um in terms of the second point you 46:59 46:59 referred to on 46:60 46:60 um on self-sufficiency so i think what 47:02 47:02 the panel was speaking about was the 47:04 47:04 fact that 47:05 47:05 there is the the aspiration of 47:07 47:07 self-sufficiency has a cost 47:09 47:09 attached associated with it as well so 47:11 47:11 in order to to 47:12 47:12 enable self-sufficiency it is at times 47:14 47:14 required to 47:16 47:16 restrict imports but then that means 47:18 47:18 that the price that the consumer 47:20 47:20 faces also has to increase as well so 47:22 47:22 there is a trade-off from the policy 47:24 47:24 makers perspective 47:25 47:25 in terms of those two objectives that 47:27 47:27 the policy maker would want to see 47:29 47:29 some degree of self-sufficiency and food 47:31 47:31 security in that sense 47:32 47:32 but at the same time they wouldn't want 47:33 47:33 to overburden the consumer in terms of 47:36 47:36 the price that the consumer has to face 47:37 47:37 so that balance is i think what is uh 47:39 47:39 what is important and what is required 47:41 47:41 from a policymaker's perspective 47:44 47:44 a few more can i 47:48 47:48 if you could keep it brief so that we 47:50 47:50 could thank you um 47:53 47:53 you have said that uh spoken about 47:56 47:56 stunting and you also said 48:00 48:00 uh increasing or good diet i don't think 48:04 48:04 there's anything 48:05 48:05 lacking in our diet because life 48:08 48:08 expectancy in this country is now up to 48:10 48:10 74 48:11 48:11 years so that means we are eating 48:13 48:13 healthy aren't we 48:14 48:14 um yes well i guess that's debatable 48:16 48:16 because if you look at the prevalence of 48:18 48:18 say non-communicable diseases diabetes 48:22 48:22 you know these kind of the 48:24 48:24 cardiovascular disease these 48:26 48:26 just because we are living up to 70 48:28 48:28 whatever years doesn't mean we are 48:30 48:30 living healthily 48:31 48:31 up to that year i think the healthy life 48:34 48:34 expectancy of sri lanka is 48:36 48:36 somewhere around 50ish i'm not 48:38 48:38 completely sure but 48:40 48:40 yes so life expectancy and healthy 48:41 48:41 healthy life expectancy there's a bit of 48:43 48:43 a gap 48:45 48:45 yeah it has gone up from 59 48:48 48:48 in the 1950s and now it's 74. so if 48:52 48:52 you're not too bad you know 48:53 48:53 so based on the bad curry that you're 48:56 48:56 eating 48:56 48:56 i think it's not too bad not too bad 48:59 48:59 really 48:60 48:60 or not thank you thank you 49:04 49:04 i guess that's a matter of perception 49:08 49:08 do we have any other questions from the 49:10 49:10 [Music] 49:16 49:16 uh audience on the launch of the index 49:18 49:18 um one of the things that make 49:20 49:20 the big mac index useful is that it 49:24 49:24 you know compares prices across many 49:26 49:26 countries any plans to expand this 49:28 49:28 index more enterprises initially at 49:32 49:32 least in south asia to make it more 49:34 49:34 relevant and also 49:35 49:35 maybe other developing countries um 49:38 49:38 that's actually a good question and 49:39 49:39 initially since our main motivation was 49:42 49:42 the big mac 49:43 49:43 index and it does look at prices across 49:45 49:45 the world it is a possibility that we 49:47 49:47 could 49:47 49:47 look into again it depends on 49:50 49:50 the comparability we'll have to make 49:52 49:52 sure we get the prices and 49:54 49:54 the goods that we use because buck curry 49:56 49:56 is very synonymous in sri lankan 49:57 49:57 household so if you're going across 49:59 49:59 south asia or any other regional 50:01 50:01 neighboring countries we'll have to look 50:03 50:03 into those things but it's something 50:04 50:04 that we could do 50:05 50:05 okay i think we have time for one last 50:08 50:08 question before we close 50:12 50:12 is there anyone okay oh yes okay 50:15 50:15 we will 50:21 50:21 the standard response every time prices 50:24 50:24 get 50:25 50:25 the debate gets a bit heated is for the 50:27 50:27 government to impose price controls 50:29 50:29 but uh could you comment on how 50:30 50:30 effective that has been 50:32 50:32 in controlling the price um i think 50:35 50:35 rihanna 50:35 50:35 can yes i think basically it's not 50:39 50:39 effective 50:40 50:40 because as i said the uh you know 50:43 50:43 consumers are not sort of in a price 50:45 50:45 making position in sri lanka 50:48 50:48 you know a lot of the essential items 50:50 50:50 are 50:51 50:51 controlled by a few uh you know entities 50:54 50:54 and they have the 50:55 50:55 and uh so if you take that 27 essential 50:58 50:58 items 50:59 50:59 gather that came in uh in february 51:03 51:03 i actually just i wrote down a couple of 51:06 51:06 some of their numbers yeah so a kilo of 51:09 51:09 cuddler is supposed to be 175 rupees 51:11 51:11 according to the gadget 51:13 51:13 desert but based on the census you know 51:16 51:16 the data collecting 51:17 51:17 it was actually 255 rupees and 51:20 51:20 uh tin fish is supposed to be 265 a tin 51:24 51:24 but actually it is about 303 rupees 51:26 51:26 attained and 51:27 51:27 uh say a kilo of broiler chicken uh is 51:31 51:31 55 rupees more than it should be so i 51:33 51:33 think 51:34 51:34 it's pretty clear that it's not as 51:36 51:36 effective on a lot of items as 51:39 51:39 you know maybe the government sort of 51:41 51:41 thing 51:43 51:43 all right um so i'd like to 51:46 51:46 thank our panelists for joining us today 51:49 51:49 and 51:49 51:49 a special thank you to their chef 51:51 51:51 assisting advocate with this and giving 51:53 51:53 us the opportunity to launch this 51:55 51:55 indicator 51:56 51:56 um we i would like to invite the 51:59 51:59 audience to take your lunch tickets we 52:01 52:01 have 52:02 52:02 uh rice and curry outside 52:05 52:05 and the 52:08 52:08 sorry sorry we have rice and curry 52:10 52:10 outside 52:11 52:11 uh and we also have a booth to 52:14 52:14 if you would like to give a voice clip 52:17 52:17 uh on 52:17 52:17 the bad color indicator any interesting 52:19 52:19 takeaways you have 52:22 52:22 we have a little media booth set up 52:24 52:24 outside you can reach out to any of our 52:26 52:26 staff for further information on that 52:28 52:28 i'd also like to thank our streaming 52:30 52:30 partners verite research sri lanka 52:32 52:32 students for liberty 52:33 52:33 the morning economy next citizen dot lk 52:37 52:37 other economy and business sri lanka 52:40 52:40 thank you if you would like to be a part 52:43 52:43 of future events like this do follow us 52:45 52:45 on our social media pages 53:32 53:32 you