Features
Implementing the Paddy Lands Act of 1958 – the Cultivation Committees
by Chandra Arulpragasam
Introduction: A Personal Note
In the CCS in early 1958, I was appointed Deputy Commissioner of the Agrarian Services Department, in charge of implementing the Paddy Lands Act of 1958. In setting out to draft the Administrative Regulations under the Act, I came across a number of structural, legal and operational considerations, which probably had not been foreseen by its authors. This was probably the first time that it was being looked at by an administrator with field experience – and the first time that it was being looked at by someone who was new to the Paddy Lands Act and to its thinking.
First, from a conceptual side, the concept and design of the Act did not fit, for example, the agrarian conditions of the Batticaloa district, which raised some problems of implementation. Secondly, because of the Act’s contentious nature, its legal provisions were likely to be challenged and its implementation obstructed. This made it necessary to examine its provisions from an adversarial point of view – which revealed many legal and administrative vulnerabilities. Thirdly, there were new problems of implementation. For example, the Act safeguarded tenants, but there were no records of tenants or of landlords. New records of land ownership, tenancy, etc. would have to be created from scratch before implementation could even begin.
In comparison, the land records in India, Pakistan and Bangladesh had been built up over a period of 200 years by the British imperial power. How could such records be created within six months before the Act would become operational in six districts of the country – as stipulated in the Act? Moreover, there were all sorts of potential legal and administrative problems in the elections of the Cultivation Committees. And so on.
The Commissioner of Agrarian Services happened to be abroad for three weeks. Thus, not only was I was the Acting Head of a Class I, Grade 1 Department at the age of 28 years, but I also needed policy-level help, because this was hitherto unchartered territory in the country. So I asked for an appointment with the Minister of Agriculture, Mr. Phillip Gunawardene, the author of the Act, whom I had never met or seen before. The Minister was charming, affable and even fatherly, over a cup of tea and cakes in Parliament. Getting down to business, I brought to his notice the number of legal difficulties and some of the administrative problems that needed his guidance.
I was so intent on my presentation of the potential legal problems of the Cultivation Committees that I failed to notice that he had tossed his spectacles on the table, which was a sign (I was told later) that he was losing his patience – and his temper. I was only half way through my list when he suddenly banged his fist on the table with a loud noise, stopping me abruptly. “Young man” he exclaimed: “Have you come across these difficulties in the field – or are they in your head?” When I pointed weakly to my head, “Go and work”, he thundered! “And when you come across these problems, then you come to me!” In complete disarray, I scooped up my files and scooted from Parliament, leaving a trail of paper in my wake! This was the first and last time that I saw Mr. Phillip Gunawardene.
Within a few months, he was isolated and pushed out of the Cabinet, to be succeeded as Minister of Agriculture by Mr. C. P. de Silva. This resulted in two difficulties that I had to face. Within a few months, every one of the legal and administrative problems that I had raised with the Minister had actually come to pass. But secondly, when I needed ministerial help, Mr. Phillip Gunawardene, was no longer there. Instead, there was a new Minister, Mr. C.P de Silva, his political foe, who was actually opposed to the Act, and who decided to let it fester in its own legal difficulties so as to discredit it countrywide. In fact, I had to battle with the new Minister to amend the Act in order to give effect to the intentions of Parliament, or to repeal it. I gathered that he was not prepared to go to Parliament to publicly repeal it, since it was publicly popular. As late as 1960, I was struggling to get the same loopholes plugged that I had pointed out to the former Minister (Mr. Philip Gunawardene) in 1958.
Although upset by my encounter with Mr.Phillip Gunawardene, I came later to recognize that I had been looking at it only from my own administive and legal point of view, not appreciating his political difficulties in going back to Parliament for amendments before implementation had even began! Although I never met Mr. Gunawardene thereafter, he must have appreciated my work, for he later paid me a handsome compliment in Parliament, as recorded in Hansard.
New Ideas: The Role of the Cultivation Committees
Starting from the premise that the state machinery, especially at lower levels, was subject to the influence of the landlords, the Paddy Lands Act created a new Agrarian Services Department at national level, devoted to its implementation. Moreover, in order to bypass the lower level of administration at field level (which was thought to be under landlord influence), it created Cultivation Committees with assured majorities for the actual cultivators. This attempt to bias the administration in favour of the weaker sections of the agrarian society represented a change from the view prevailing from colonial times, namely, that the administration would be neutral in its dealings with all sections of the public. It is relevant to note here that most of the agrarian reform programmes in Latin America started from the same premise. Similarly, they opted for separate, dedicated agencies for the implementation of their land reforms, outside their existing ministries. The experiences of Japan, South Korea and Taiwan were quite different because their land reforms were carried out under martial law, or with the active backing of the military.
The Act was also innovatory in that it represented the first time in any country in South and South East Asia that legal powers in the implementation of tenurial reforms and the management of irrigation and cultivation at field levels were given to an elected body. The idea that an elected body of semi-educated farmers could take over functions from the government bureaucracy was clearly revolutionary at that time. For example, since the rent payable on a particular field was fixed as one-fourth share of the harvest, how could a distant court know how much the gross harvest of a particular field was? The Act recognized that such factual questions at field level could only be answered at field level. The failure to recognize this and to provide for beneficiary participation in implementing such reforms has been one of the greatest weaknesses of similar programmes in other countries of the region at that time.
The first role of the Cultivation Committees was to help in the implementation of the tenancy provisions of the Act (Sections 8-19). The Committees were also authorized to act as intermediaries between landlord and tenant in the collection of rents, etc., thus reducing the personal hold of landlords over their tenants. The Cultivation Committees were thus expected to play an important socio-psychological role in bolstering the confidence of the tenant-cultivators to actively claim their rights under the law.
Secondly, the Cultivation Committees were given important development functions, with powers for the advancement of paddy cultivation in their areas. They were given access to technical advice in the form of Agricultural Extension Officers and Village Cultivation Officers, who were made ex-officio members of the Committees; but with a right only to speak but not to vote at their meetings. It was hoped that with such technical advice emanating from within, and adopted by the Committees, would enable both paddy production and water-management to be greatly improved by the farmers, acting on their own volition..
A third major innovatory function of the Cultivation Committees was in respect of (irrigation) water management, with the Committees taking over the functions of the Irrigation Headmen (Vel Vidanes) at field level. These functions, among others, included enforcement of rules relating to cultivation dates, clearing of channels, fencing, etc, as well as improving water management. This was in a context where bureaucratic and technical means of water management at field level had already failed. The Paddy Lands Act of 1958 thus predated international recognition of the need for farmer participation in water-management by at least 20 years! In practice, however, the Cultivation Committees under the Act of 1958 never made any progress in this field because they were legally invalidated soon after their formation.
A fourth innovation was in the field of agricultural extension. It was evident then, and more evident now, that agricultural extension systems based on the western models of one extension worker dealing face-to-face with each individual farmer were completely unrealistic in most developing countries with a multitude of small farmers. For example, in Nepal, an extension agent would have to walk one whole day to even reach 50 farmers in remote vellages! No developing country in the world could afford such a system in the context of multiple small farmers, which would require a quadrupling or more of extension workers. Ironically, this has been the recommendation of FAO and the World Bank for decades since the Paddy Lands Act of 1958! It is therefore obvious that a two-stage system or a group system of extension had to be devised, either with the extension agent working through farmer leaders, or through a system of group-extension, as envisaged by the Paddy Lands Act. Thus, the Act’s introduction of such a group extension system with farmer education and participation in the planning and implementation of such self-decided programmes of agricultural development was at least 40 years ahead of its time.
Lastly, the tenurial provisions of the Paddy Lands Act needed to be supported by a broader package of institutional support for smallholder agriculture, in order for the Act itself to be effective. Such a package was provided by the establishment of the multipurpose cooperatives, agricultural credit for smallholders, a fertilizer subsidy, a guaranteed price for paddy and a pilot crop insurance scheme. It is important to recognize that the Green Revolution could not have taken off in Sri Lanka around 1967 if the institutional support structure for small-scale paddy farming had not been laid in the late 1950s, alongside and with the Paddy Lands Act.
While the Act provided for an active role by farmers’ organizations (the Cultivation Committees), it is clear that the latter were not neutral farmer organizations. It was known, for example, that the village cooperatives in most countries of South Asia were under the control of the big landlords. The Paddy Lands Act, therefore, went to great lengths to neutralize the overweening power of the landlords by weighting these Committees heavily in favour of the actual cultivators. The landlords, however, retaliated by getting the Cultivation Committees declared legally invalid. This had the effect of cutting off the implementation structure at the knees, with no feet on the ground, making field level implementation impossible.
Thus one of the main laudatory features of the Act, namely, its provision for beneficiary participation, proved also to be its Achilles heel, leading ultimately to its collapse. Although such local farmers’ associations weighted in favour of the actual tillers succeeded in Japan, Taiwan and South Korea, they were supported by martial law, or by military force. In contrast, our Cultivation Committees were subject to a judicial system under the rule of law in a democracy. In fact, it even allowed a President of a Village Tribunal to famously declare from the bench: “Pillippua Parippua-ge kumburu panatha appete epa” (We do not want lousy Phillip’s Paddy Lands Act!)
The Department of Agrarian Services organized rounds of field-level meetings, trying to encourage the Cultivation Committees to hold fast, promising that legal amendments would soon be forthcoming to remedy their legal incapacity. But in fact, these amendments came too late. They were passed only after the landlords had already evicted their tenants, and only after the Cultivation Committees had been seen to have failed in their cultivation and irrigation duties, thus losing the confidence of the farmers themselves.
It is also necessary to consider the socio-political climate in the villages at that time. There was euphoria among the tenant-cultivators and agricultural workers when the Act was passed, heightened by their participation in the formation of the Cultivation Committees, which they felt would support them against arbitrary eviction and higher rents.
This enthusiasm was reflected in other aspects of cultivation too. Fertilizer consumption doubled in the first year of the formation of the Cultivation Committees, but collapsed in the year following their legal invalidation. This collapse caused great demoralization among the cultivators, since they had gained great socio-psychological support from the Committees in standing up for their rights. With their collapse, many tenants surrendered their rights, accepting their plight as “hidden tenants” with no rights under the law. There was chaos in the paddy fields too, since there was no agent/agency left to ensure that the fields were fenced or the water issued. Hence, by the time the Cultivation Committees were re-legalized by the Paddy Lands (Amendment) Acts of 1961 and 1964, the latter served only to close the stable door after the horse had bolted. The Committees never regained the vigour and vibrancy that accompanied the first flush of their formation under the Act of 1958.
Legal and Administrative Challenges: The Collapse of the Cultivation Committees
It is left only to record the legal arguments that led to the collapse of the Cultivation Committees of 1958 – which provides a lesson in itself of how legal finagling can upset progressive legislation. A Cultivation Committee was to consist of twelve (12) members (Section 29). “Of the prescribed number of elected members of the Committee: (a) not less than three-fourths shall be elected by the qualified cultivators……; and (b) not more than one-fourth shall be elected by the qualified owners….” Clearly the intention was to give greater weight in the Committees to the actual cultivators as opposed to the landlords.
In administrative terms, it was clear that there had to be two separate elections: one for the owners to elect their members, and one for the actual cultivators to elect theirs. This required that separate electoral lists be prepared for the owners and separate ones for the cultivators. Given the predictable opposition from the landlords, every name on every electoral list was liable to be challenged, while the elections themselves could be disputed in law. I had pointed this out to Mr. Phillip Gunawardene in my first and only encounter with him.
But there were even more serious problems. Since the law and relevant regulations stipulated that all Cultivation Committees shall have twelve members, the refusal by landlords to elect their representatives would render most of the Committees invalid. This again was a potential problem that I had brought to the notice of the Minister in my initial and only meeting with him – for which I was chased out by him! Faced with this situation on the ground one year later, we took the position (with the agreement of the Attorney-General) that if the landlords failed to elect their three representatives, the cultivators could elect the full twelve members of the Committee, since they (the cultivators) were entitled to elect a number “not less than three-fourths” of the Committee. The landlords then consulted Mr. H. V. Pereira, the highest legal luminary in the country. His brilliant mathematical argument in the appellate court was that since the landlords were to elect “a number “… “not more than one-fourth”, and since the qualified owners had elected nought representatives, and since nought is not a number, the Cultivation Committees were not legally constituted! On this abtruse mathematical argument, the Court decided that the Cultivation Committees were not legally constituted!
All past and future actions of such Committees were also declared null and void! This ruling encouraged the landlords to boycott the Cultivation Committee elections all over the country, thus rendering them legally invalid and their actions legally void. Thus the implementation machinery of the Act at field level was completely demolished on the basis of this legal argument! Since these Committees had by law taken over important irrigation and cultivation functions (the vel vidanes having been abolished) their invalidation led to a breakdown in the common arrangements for cultivation and irrigation, thus causing complete chaos in the field. And the Minister in charge of its implementation (Mr.C.P. de Silva) was not prepared to pass the needed amendments to plug the legal loopholes.
This placed me, as the implementer, in a professionally unenviable position. On the one hand, my duty was to implement the Act; but on the other, my own Minister who was also supposed to be implementing the Act, seemed intent on making its implementation impossible. Nor was he willing to repeal the Act, since it still had popular appeal. Two Commissioners of the Agrarian Services had been transferred out of the Department because they had agreed to sign the needed amendments to plug the loopholes in the Act. After more than two years of this unequal and unsuccessful struggle, I capitulated and sought a transfer out of the Ministry.
(The writer, a former member of the Ceylon Civil Service, later worked for a long period at the UN’s FAO in Rome).
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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