Features
From building businesses in the Far East to the main board of R&C
(Excerpted from the autobiography of Lalith de Mel)
From time to time head hunters had been contacting de Mel about leading initiatives in developing markets. So he sought an appointment with the Chief Executive and asked him bluntly whether he was a potential Board candidate. He would go no further than to assure him that he was on the shortlist for the Board. The CEO sensed de Mel might leave and did not want that and so the conversation veered to what he would like to do next.
He had often argued at the Group’s strategic discussions that the Far East was an area of great potential. So he was asked whether he would like to move to the territory and make a serious effort to build a series of new businesses for Reckit and Colman in the area and was promised all the financial and human resources he required.
He decided to take on this role. He also decided that if he was not appointed to the Board after his stint in the Far East, he would move to one of the other groups which were contacting him about working for them in a regional role in the Far East. He thought it would be much more fun spending the rest of his working life in the East than in the West.
So he came home and told his wife and family that he was thinking about moving to Singapore. His wife thought Singapore was exciting (she really enjoyed her stay there). His daughter Chiara had just finished the first term of GCSE at a school which was her fourth school as they had also sent her to Colombo for a few years in the Sinhala stream at St. Bridget’s. He was worried about the disruption and decided that he would not push her and gently floated the idea. She too was up for it. The only condition his daughter imposed was that she wouldn’t move unless they took their dog, a Cavalier King Charles Spaniel called Dusty, to Singapore as well. So he took off to Singapore with his wife, daughter, Dusty and their Sri Lankan housekeeper.
Building businesses in the Far East
The two top items on the agenda were finding a house and a school. The company had a nice spacious house with a large garden, something that was very rare in central Singapore. Everybody liked the house so housing got a tick. The next item on the agenda was a school. His daughter got a place at United World College, so that too was ticked. The next was getting to school and back. Singapore was extremely safe and they didn’t have an issue with sending their daughter back and forth from school using public transport.
In the former British colonies, people spoke English. A reasonable amount of English was also spoken in Thailand. The Indonesians did not speak English. It was a very large market and it was useful in Indonesia to speak Bahasa to get around the market and ask a few meaningful questions. It was also useful for his golf since the caddies in Singapore and Malaysia spoke Bahasa. So he put that on the agenda.
The Far East was the one major gap in the Reckitt & Colman portfolio of countries. They had a big business in the USA, a good presence in Canada, businesses across Latin America and Europe and in the major markets in Africa, Australasia and South Asia.
“I had been making the case for developing the Far East regularly at the Group’s annual conference on strategy. I had said many times that this region would at some stage in the future be a huge consumer market. The individual markets would all grow at a different pace, but they would all grow. Those not familiar with the territory saw a hazier picture.
China had not opened up and may never do so. Japan was difficult. The news about Indonesia, Thailand, Taiwan, Philippines and Korea was more about political turmoil and less about big consumer markets. There were many claims on the Group’s resources, and the Far East was perceived as something that would be a long haul and years of losing money. Every year they said ‘let’s look at it again next year’.
They were also turned off as foreign investment was regulated in every country in some form or the other and the route may be joint ventures and that did not appeal. Approval was required from various authorities and there was the smell of corruption in the air in most of these countries. All this meant complexity and that did not appeal to the Group.
That was the background when I accepted the challenge. I said, ‘I will set out what I will endeavour to do’ and wanted approval in principle. I added that I wanted to be left in peace to get on with it without a host of corporate planning and finance staff visiting, nit-picking and debating the viability of my plans.
I said I would set up an operating entity with own or joint manufacturing facilities in Singapore, Malaysia, Thailand, Philippines, Taiwan, Indonesia, China, a marketing entity in Hong Kong and Joint Ventures in Japan. The target for completion was three years. I said this would provide the basic infrastructure that would enable the Group to progressively build its business in the region in the future. I added that if we did not put these starting blocks in place, we would never be able to benefit from the growth in the region.
Chief Executive, John St. Lawrence knew that if I did not get a clear yes, without a variety of conditions and reviews before each tranche of funding, I would walk away.
I got approval without any conditions and was up and running straightaway. I had already built a factory and had an office in Singapore and used this as the support base for the new businesses. At the end of three years I delivered. I did everything that I said I would do.
During this time I never visited the UK. I did not step into the corporate office for three years and I did not attend any of the annual conferences. I blocked all efforts by corporate planning and finance staff to visit the region to ask their usual probing questions to justify their roles. If they wrote, it went into the bin. But I religiously reported every month on progress to my Group Director, who fortunately had the good sense to leave me severely alone.
The only visitors I permitted were the Chairman and the Main Board Executive Directors.”
To summarize, de Mel established a company and business in Singapore with good manufacturing facilities, a company and business in Malaysia with manufacturing facilities, Joint Venture in Thailand with the Thai partner having manufacturing facilities, a new Joint Venture with a factory in Indonesia, a Joint Venture with an old trading firm in the Philippines which had manufacturing facilities, a new company with manufacturing facilities in Taiwan, a Joint Venture with the Chinese Government authorities, two manufacturing Joint Ventures in Japan, one in food and one in consumer products, and a new company in Hong Kong that was the resource base for developing China.
He had visits from the Main Board Directors. Some of them may even have had doubts that he had created so many businesses so quickly and wanted to see for themselves whether it was just a name board on the wall or whether there were actual manufacturing facilities, staff, products in retail outlets and a distributing network. They all went on trade visits and saw Reckitt & Colman products on the shelf, including the newly-launched Dettol plaster, soap and shower products, which have now grown to be mega products. The Chairman, Sir Michael Colman, had also visited and been impressed with what had been achieved in a short time.
From this model of developing a region in a rush, the key learning was to have top quality local management staff and de Mel put a lot of time and effort into making sure that he managed to get the appropriate staff. He never used any expats in the countries (except for a small corporate team of one Pakistani and one Indian in his corporate office in Singapore).
After two- and- a-half-years, when most of it was done, Corporate Headquarters insisted that he should do the Advanced Management Program at Harvard Business School and so it was off to the USA and Harvard. Multinationals put emphasis on evaluating and training their senior employees and one of the places considered best for this was the Harvard Business School and its acclaimed Advanced Management Program (AMP) for professionals higher up in the organization.
Lalith de Mel with wife Shiranee at the Harvard Business School AMP Graduation function
AMP was an uninterrupted and highly-condensed MBA for top business executives who could not spend a year away from the business. So the program had what they would usually do in a year condensed into four hectic months. Therefore he spent four months in Harvard away from his duties in Singapore doing exactly that.
It expected full commitment, especially because the program was to enhance not only the leadership capacity of the participants but also that of the organizations they worked for. It was for potential business leaders who were one or two levels away from the position of CEO and identified by the employer as persons vital to the company’s future business plan.
The program enabled the participants to meet and learn under recognized thought leaders, skilled educators, ground-breaking researchers, active corporate board members and award-winning authors. The majority of those who joined the program came from companies with an annual revenue in excess of $250 million and should have had at least 20 to 25 years of work experience including substantial time as a senior executive. Thus, a participant would be studying together with an elite group of business leaders groomed to graduate to the next level of the corporate ladder.
As a highly-integrated and fully-immersive program, its intention was to bring out analytical skills and cross-functional perspectives in a short period of time. Therefore AMP would ensure development in management skills, strategic insights, innovative thinking and initiating change as they were key qualities expected by the employer to drive their businesses. AMP was restructured to fit the current economic landscape so that the skills acquired could be applied in the participants work environment at the current point of time.
The ultimate perk of having completed the AMP is that one becomes a lifelong member in the Harvard Business School alumni and has exclusive access to its growing global network as well as resources and tools to keep learning. Though it was a stressful program that required a lot of hard work, Lalith enjoyed the course and successfully completed it.
At last an Asian director, appointed to the R&C main board at age 53 53
“My aspiration as a Regional Director was eventually to get on the Main Board of Reckitt & Colman PLC, which was a major top 100 company in the UK. I knew this was not going to be easy to achieve because it was an old traditional British company and a major top 100 public company in the UK. The Chairman at the time was Sir Michael Colman, a baronet. During my time at Corporate Headquarters, the Main Board Directors were all British with one exception, an Australian. I was the first non-British person to be a Regional Director. I had come through that glass ceiling and I wondered whether I could go through the next and get on to the Main Board.
The Main Board was composed of the Chairman, Chief Executive, six Group Directors and four Non-Executive Independent Directors. The challenge was to become one of the six Executive Directors. An opening came about only when one of the Main Board Members reached retiring age or was removed. At the time de Mel returned from Harvard, the Chief Executive and one other Director were due to retire and two slots were available.
A team of two Non-Executive Directors were given the task of selecting the next CEO. The favourite for the role was the most senior Director. I knew him well; he was a Regional Director occupying the next office when I came to London and we were good friends. We also played cricket together for the R&C London team. Early in his career he had been appointed to the Main Board and was the longest on the Board, so I felt that if my friend Peter Maydon was appointed, perhaps I would have a chance of getting on the Board. The final recommendation of the Non-Executive Director selection team was a surprise; they recommended a very young man, Vernon Sankey, who was the youngest on the Board. The full Board, after considering it, decided to appoint him.
The top team in the company comprised the Group Directors, the Regional Directors and Heads of the major businesses. We all attended various residential conferences from time to time so knew each other well as we ate together and had a few drinks at the bar together in the evenings. When I heard that Vernon Sankey was appointed I was surprised, but I did not feel uncomfortable because I knew Vernon quite well.
The appointment of an executive director of a major public company was an important task. After internal discussions, the chairman would make a recommendation to the full board which would make the final decision. The head of human resources had a large role to play as he was responsible for managing management succession for all the key jobs and he had a short list for all the jobs and had all the career information about potential candidates.
The retiring chief executive would also participate as the prospective candidates had all worked for him. The incoming chief executive would have a big say because the new board would be his team. An agreed decision would be recommended by the chairman to the full board.
On the day that the Board announced the appointment of Vernon Sankey, I was in Singapore. I remember the day well. Late in the evening, I had a call from Vernon in London and he said he would like me to join the Board as a member of his team. At last, the objective of getting on the board of this UK top 100 company was finally achieved. When 1 was appointed I got a flood of letters of congratulation.
Those who did, and would report to me, probably felt it was prudent to congratulate the new boss. What I found gratifying was to receive many letters from former colleagues. I have quoted below from three interesting letters.
Ted Wright when he was Group Director of the Overseas Group invited me to work in London as a Regional Director. This is what he said:
What a cheering announcement we found when we got back from a trip to France this week! I was truly delighted with the news of your appointment to the Board with responsibility for the whole Pacific Rim (West).
I well remember the day when I decided that your abilities were never likely to be adequately exploited if stayed in your native Sri Lanka and it’s immensely satisfying to see one’s predictions proved correct. You have mastered every challenge thrown at you and, I know will do the same with the new ones… With all good wishes for a most successful future,
Yours,
Ted
A letter from Stan Ward who was the Head of HR. He had retired by the time I went to Singapore. I was delighted to learn that far back when Stan was Head of HR, I was in the frame for a Board appointment.
I cannot say how delighted I was to hear the news of your appointment. Heartiest congratulations and best wishes for your future success.
Forgive me if I’m indiscreet, but it was always an ambition of mine that You would get on the Board, so I’m doubly pleased that one of my favourite ‘old boys’ has made it… Again, every good wish and warmest congratulations and regards,
Stan
A letter from Peter Knee, the last Group Director I reported to before being appointed to the Board:
“…you have worked hard and successfully for the promotion and also waited overlong for it. May the fact that it has now occurred be seen by you as a well-deserved recognition of your talent and achievements, and by the R&C world at large as both and more. And here I am thinking particularly of encouragement it will bring to all those in many countries who may have wondered whether R&C would cease to be a British international company and start to become a truly described multinational one. It has!”
The euphoria of the appointment and the congratulations received soon evaporated and became a memory of the past. It was overtaken by the challenge to prove beyond any doubt that those who appointed me had made a correct decision. I was aware that there would be some who were unhappy with the decision, particularly those who saw themselves as candidates for the Board. If my performance had bumped along and if I had difficult issues with senior managers, they would have gleefully pointed out publicly that I was not up to it.
This was not a job for life. If you did not perform, you had to go and take early retirement! That was the polite way to say that one was fired. During my tenure two Main Board Directors and one Chief Executive took early retirement.
Returning to the UK
We had kept our home and so we had no problems on that score. Our worry was Chiara, our daughter’s education. Fortunately she had a good track record with eight As at GCSE in Singapore. She got a place at the very elitist boys’ school Westminster that had just started taking in girls for Advanced Levels. We were always concerned about whether the many changes in schools due to my movements would affect her studies. Fortunately they did not. She got three As in her A/Level exam and the Certificate of Excellence for Economics given for the best two papers in Economics. Much to our disappointment she would not go to Cambridge after being offered a place at my old college after a gap year and instead went to Warwick University, which had a good reputation for Economics. She did well as usual and got a first class in her BSc Economics.
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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