Features
Cold War to COVAX: New US President rallies allies, but no brave new world in sight
by Rajan Philips
Six months in office, President Biden took his first foreign trip last week, attending the first in-person G7 summit after the pandemic over the weekend, at Carbis Bay in Cornwall, England, and meeting with Vladimir Putin on Wednesday in Geneva. In between, he attended a summit gathering of NATO member country leaders on Monday and met with the European Council on Tuesday. The G7, NATO and the EU meetings became occasions for diplomatic China bashing. And China responded in kind and more, through its Embassies in London and in Europe rather than by the mandarins in Beijing. China’s “wolf warrior” diplomacy might be irksome to old school sensibilities, but China seems to be in no hurry to change its modes of diplomacy to please anybody.
Everything is different now from the geopolitics of Cold War. Russia is no longer the West’s main adversary, and capitalism and socialism are not the same weighty words as they once were. Vladimir Putin is, at best, or worst, mostly a significant spoiler. It is China that looms large from the East, pre-occupying western powers, but the terms of engagement now are more competitive and less conflictual. The world is currently without any serious skirmishes, internal or otherwise. There is a lull even in the Middle East, and there are hopes that it might continue with both Benjamin Netanyahu and Donald Trump out of power, at least for now. But where violence has receded, the pandemic has taken over. And Cold War politics has given way to vaccine politics.
When history fails to turn
Yet, after much haggling and despite promises to do a lot more, G7 leaders were not able to come up with anything more than one billion vaccine doses when 11 billion of them are needed to immunize the world’s population. Gordon Brown, former British Finance Minister and later Prime Minister, has called the G7 summit another missed opportunity in the history of summits, “another turning point where history failed to turn.” He blamed G7 leaders for their failure to honour the pre-summit promise of Prime Minister Boris Johnson to vaccinate the entire world.
Besides Johnson, more than 100 former world leaders had called on G7 leaders to pledge $44bn of the $66bn needed to vaccinate the world, or eight billion doses and not one billion. A joint Norway-South Africa plan had worked out that eight billion doses donation would involve 27% contribution from the US and 22% contribution from the EU. The current US promise of 500 million doses amounts to 50%, which is a significant share but of the pathetically scaled down one billion promise of the Group of Seven countries. In early May , President Biden announced America’s support for waiving western vaccine patents to facilitate worldwide production and supply of COVID-19 vaccines. His radical turn surprised many, but found no support in G7 and the summit once again “failed to turn.”
Aid and welfare agencies are palpably disappointed with the poor show of vaccine generosity by the wealthiest of the world’s nations, and these civil societies are not likely to be enthused by President Biden’s clarion call for democracies of the world to unite against its autocrats. Nor are other G7 countries entirely enthusiastic about agreeing with the US policy towards China. A number of them do not want to alienate China which they see has a necessary role to play in the global economic recovery after the pandemic. To non-American observers, Biden’s position on China is not very different from that of Trump; what is different is the absence of Trump’s narcissism and racism. And America’s allies, while relieved at the exit of Trump and the entry of Biden, are also unsure that there will not be another political recession in the US similar to what they have had to unexpectedly encounter over the last five years.
Even though China was the main subject at the summit, the final statement reflected a balance between the pushes and pulls between America and its allies. Perhaps the sharpest note in the 70-point G7 statement could be the reopening of the ‘origin’ controversy involving the coronavirus. The summit’s call to make a “science-based” determination of the origins of COVID-19 may have better served its totally legitimate and objective purpose if the call too could have found a science-based origin rather than adversarial politics. Unfortunately, there is no international mechanism to facilitate such a consensus.
As Secretary General António Guterres rued last September marking the 75th anniversary of the United Nations, “the pandemic is a clear test of international cooperation — a test we have essentially failed.” The G7 summit, while it was positively different with Biden displacing Trump as America’s President, came nowhere near to rectifying the failure of international cooperation that the Secretary General was alluding to. There are many things about China that are not at all unexceptionable, but isolating a giant of a country and economic powerhouse is not the way to foster international co-operation, or to determine the truth about the origins of COVID-19.
Two days after G7, NATO got in on the act of targeting China, for first time in its deliberations, and calling China’s actions as a threat to “rules-based international order.” China responded calling NATO to stop “slandering” and to “devote more of its energy to promoting dialogue”. That NATO’s take on China may have been more a manifestation of bureaucratic overreach and not political consensus became evident from the notes of caution that came from the British and French leaders, among others. Prime Minister Boris Johnson asserted that nobody “around the table wants to descend into a new Cold War with China.” France’s Emmanuel Macron had earlier admonished that “China has little to do with the North Atlantic,” while Germany’s Angela Merkel had apparently emphasized that western alliances are “not about being against something, but for something”.
Positive Initiatives
Besides COVID-19, the summit focused on human rights, again targeting China over human rights violations in Xinjiang and in Hong Kong. A somewhat positively competitive response to China was the announcement of a new global infrastructure plan. In an obvious counter to China’s Belt and Road infrastructure initiative, the G7 group at America’s prompting has come up with an initiative of its own, called “Build Back Better World (B3W).”
The new plan is expected to raise about $40 trillion by 2035, and will focus on improving “climate, health and health security, digital technology, and gender equity and equality” conditions in developing countries. By comparison, China’s Belt and Road initiative launched in 2013 is bankrolled solely by China to the tune of $160 billion and is expected to focus more on hard infrastructure projects. The rest of the world can only applaud the two initiatives while hoping that the two promoters will allow other countries to proportionately benefit from both, and not from one or the other.
An even more far reaching summit outcome is the agreement on global corporate taxation. Already in the run-up to the summit, G7 Finance Ministers had reached a deal on (1) source-taxing corporations (i.e., to tax businesses in the countries where they conduct business and earn income); and (2) a global minimum tax proposal of 15% on businesses. The 15% rate is lower than the business tax rate in every G7 country, so this is not a tax increase in those countries. But what it will do is to expose to taxation multinationals and digital companies that now keep running for tax holidays and tax havens. Netherlands, Luxembourg, Singapore, and Ireland are among the more established tax havens, where “phantom investments” flow but no physical manifestations (as in factories, sales, or jobs) are seen. According to the IMF, “phantom investments” account for 40% of the world’s much coveted FDIs (Foreign Direct Investments). Is Sri Lanka’s Port City meant to be a magnet for its miniscule share of phantom investments?
The G7 agreement over global taxation is really the culmination of a much broader effort involving more than 100 countries working over a number of years. And the estimated revenues from global taxation are quite significant – ranging between $250 billion to $600 billion annually. While the G7 agreements is a big step forward, there are obstacles ahead as nothing can be done without the support of everyone. US Treasury Secretary Janet Yellen mooted the idea for global taxation long before the G7 summit, but it will have to pass muster in the US congress. There is broad support in the EU, but Ireland could be an outlier. The next forum for the global taxation effort will be the gathering of G20 Finance Ministers in Venice in July. Large countries from every continent including China and India will be at the table. Its outcome will offer clues about the pace of global taxation reform.
From Nixon to Biden
The Guardian in one of its editorials last week recalled something that no one in the US or China would seem to have bothered to note so far. It is that next month would be the 50th anniversary of Henry Kissinger’s secret mission to China to prepare the path for President Richard Nixon’s historic visit to China in February 1972. The visit lasted a week, “the week that changed the world,” as President Nixon famously declared. No one, not even President Biden, is going suggest that the new President’s first week of foreign forays in England and in Europe is going to change the world. But there is no denying the extent to which the world has changed between Nixon’s visit to China in 1972 and Biden’s visit to Europe in 2021. It is not that Nixon’s visit changed the world, but only that he seized the opportunity in a world that was already beginning to change.
Henry Kissinger reportedly assured Chinese leaders that “It is the conviction of President Nixon that a strong and developing People’s Republic of China poses no threat to any essential US interest.” Fifty years later, President Biden is calling on democracies to come together against the world’s authoritarian powers, primarily China. In a sense, Biden’s meeting with Russia’s Putin in Geneva last Wednesday caricatures Nixon’s historic visit to China. The summit was a useful necessity even if it was mostly meant for the domestic audiences of the two leaders. Putin wanted to show Russians that under him their country is still a force to reckon with, even though it no longer has the armour of a Soviet Union. For Biden, it yet another demonstration that Trump is gone and America is back. Yet, it was useful that the two leaders have opened a dialogue, which is essential if any headway is to be made, especially in the Middle East.
But it will be paradise lost if America and the West were to fail to open a new dialogue with China without isolating it or ganging up on it. Western leaders made the same mistake after the collapse of the Soviet Union, when they isolated Russia and invited all the former Warsaw Pact countries to join NATO and gang up on Russia. But there is no comparison between Russia without the Soviet Union and 21st century China that is set to surpass the US as the world’s biggest economy in a matter of decades. Yet, there are also growing backlashes against China even as its economic power grows, not only in the West but also in China’s own backyard and wider Asia. The EU, Lithuania and Hungary have recently blocked or put on hold economic partnership prospects with China. On the other side, Australia, South Korea, India, and South Africa are open to aligning themselves with G7 countries. They were all in sidebar attendance at the G7 summit.
If there is paradise to be regained, it can only be through the working of multilateralism. For all its unanticipated problems, the 21st century is remarkable for growing reality of multilateralism in spite of its serious institutional limitations. Beefing up the world’s multilateral institutions should be the first order of business for world leaders in whatever forums they gather. That was not anyone’s agenda at the G7 summit. Nor is it likely to be uppermost in China when it will celebrate, on July 1, the centenary of the Chinese Communist Party.
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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