Features
Adhering to Foreign Affairs Constitutional Mandate?
by Austin Fernando
Many criticisms are directed at the Ministry of Foreign Relations (MFR) (previously Ministry of Foreign Affairs -MFA) for alleged operational failures. Incidentally, the successes of MFR are not spoken much, not for want, but that is life!
For example, currently, there are criticisms against the ‘withdrawal threat of the Generalised Scheme of Preferences Plus (GSP+)’, and the March 2021 UNHRC Resolution. Even previously we have heard criticisms against Yahapalanaya over ‘co-sponsoring the UNHRC Resolution- 2015.’ The Mahinda Rajapaksa government faced criticisms over the handling of UNHRC Resolutions (2009-2013), and the withdrawal of GSP+. While some appreciated President R Premadasa for the Gladstone Affair, others criticised him. Criticisms were directed against President JR Jayewardene over the Falklands War issue. If looked at apolitically, every government has had its share of criticisms.
Constitutional Mandate for Foreign Affairs
It is appropriate to review the MFR/MFA operations through a constitutional prism. First, let us look at the fountain of power or the mandate for ‘foreign affairs.’ The Sri Lankan Constitutions maintained a centralised nature until the 13th Amendment introduced devolution and restructured administration. It demarcated the functions of the State. Accordingly, the functions of ‘Foreign Affairs’ in the List II- Reserved List were:
“This would include-
(a) Foreign Affairs: all matters which bring the Government of Sri Lanka into relations with any foreign country;
(b) Diplomatic consular and trade representation;
(c) United Nations Organization;
(d) Participation in international conferences, associations, and other bodies and implementing of decisions made thereat;
(e) Entering into treaties and agreements with foreign countries and implementing treaties, agreements, conventions with foreign countries.
In (a) above, two terms i. e. “all matters”, and “with any foreign country,” are important for MFR functioning. If the Constitutional intentions are to be satisfied, the MFR, other political and administrative hierarchies should adhere to this constitutional mandate.
The last few decades’ experiences show that adherence to these two ‘terms’ was seen sparingly. High political authorities have ignored these terms. We did not see any public outcry or even a restricted or nominal concern shown by the MFR, and its predecessors, against non-adherence, though occasional political outbursts happened. Examples for ‘outbursts’ were observed when the Indo- Lanka Accord was signed, UNHRC Resolution was co-sponsored, when the Indian Peace Keeping Force was invited, etc. These related to “international relations”, but with minute, or no stakeholder consultation before embarking. Looking at mandate (b), (d), and especially (e), obviously the role of the MFR spreads on a wide canvass.
Regarding mandate (c) the MFR holds sway. Many recent criticisms on (c) were on human rights, the Prevention of Terrorism Act, disappearances, reconciliation, returning refugees and repatriated workers suffering from COVID 19, etc. These have domestic political attachments and are complex
The list of violations of the 13A- List II stipulations is long. I recall a few experiences in my short service as a diplomat. (I have many more!)
Recent Foreign Relation Experiences
Following-up Agreements, Treaties, Conventions, diplomatic meetings are expected from the MFR. Coordinating with stakeholders inclusive of missions abroad, keeping them abreast of decisions matters. Does this happen? Yes, it happens in the breach. An example of default in information sharing by MFR was exposed when MFR requested the Delhi Mission for the proceedings and minutes of President Gotabaya Rajapaksa’s delegate meetings with Indian dignitaries while knowing that quite unconventionally none from the Mission accompanied the President! Really, the Mission should have requested them from MFR!
More seriously, I mention how decisions at President Gotabaya Rajapaksa’s discussions with Indian dignitaries were followed. During the 40 days of service after the President’s visit until I was recalled, the Delhi Mission did not receive any follow-up directives on the visit. Is it the respect to PM Modi and interest shown toward India, the outcomes of the visit, or is it only the non-adherence of the mandate? Indians are a sensitive and sensible lot!
Though PM Modi offered a 450-million-dollar Line of Credit as “India’s full assistance in taking” Sri Lanka “in the path of rapid development,” MFR did not exhibit that urgency, rapidity, reflected from lacking public knowledge about Indian projects since this pledge. These are the criteria exhibiting the direction of the path of rapid development.
Anyhow, the bi-lateral concerns were never conveyed to the Delhi Mission either by the Presidential Secretariat or MFR, and hence there was no mission follow-up. The mission could not automatically know items to follow up, being absent at presidential deliberations. Nevertheless, the citizens must know the outputs/outcomes of PM Modi’s pledges. We do not hear of new project information, or even whether Sri Lanka has formally accepted the pledges. After twenty months of the visit, it is not the best outcome for relations building for the President with the closest neighbour, friend, sometimes called the relative, especially when Indians reflect President’s relationships with China. The MFR’s mandate accommodates such review and information dissemination.
Observing fast-moving Chinese projects, the Indians wonder whether the Modi Pledges have been relegated to the backburner, and preference is elsewhere. This is of security and political connotations to Indians.
To my understanding, only the Solar Alliance’s $100 million offered for solar power projects are being processed. Concurrently, ADB-assisted solar projects in the Jaffna Islands and other projects such as road construction, the de-silting of the Tissamaharama tank commenced after Modi’s pledges; they are carried by Chinese firms. Balancing the Indian concerns as regards the Chinese power project in the Jaffna Islands could have been easy if the Solar Alliance project had been used. (Yahapalanaya was also responsible for this delay.) Indian drone surveillance of our coastlines also would have been redundant.
For comparison, I quote another Indian experience. Having provided $ 1.4 billion assistance to the Maldives, Indians again focused on the Maldives, which has a population of 530,953 (2019), financing major infrastructure development that included a $100 million grant and $400 million new line of credit. Indian External Affairs Minister Dr. S Jaishankar announced the creation of an air bubble with the Maldives to facilitate movement and the commencement of the cargo ferry service between the two countries.
The reason for such relationship-building by the Ministry of External Affairs (MEA) was the Chinese- Maldivian bond, which perturbed India. For India, it should have similar concerns with us as well. When similar Indian responses are not observed under even worse circumstances, it makes one wonder why. When India delays finalising the US$ 1,000 million facilitation requested by our government while Indian-Maldivian relations expand, one asks why. Have we failed to reach the promised “very high level” bilateralism, enunciated by President Rajapaksa in Delhi?
PM Modi pledged $450 million when President Gotabaya Rajapaksa visited India. Our former Presidents visiting India did not experience this kind of generosity. PM Modi showed similar generosity to the Maldivian President (US $ 1.4 billion), Bhutanese PM (Indian Rs. 4,500 crores), on their first visits. This may have made President Rajapaksa state that “he would strive to take his country’s bilateral relationship with India to a “very high level”. I doubt whether his effort has reached fruition.
Shouldn’t the MFR be held accountable for non-adherence to its mandate?
The Maldives succeeded while we were haggling over the Eastern Container Terminal (ECT), the Trinco Tank Farm Project (TTFP), Mattala, etc. Maybe, the Maldives accommodated Indian development activities. I do not support endorsing every Indian project as demanded. It is not necessary. Yet, considering the Indian marketplace economics, it is appropriate to finding middle-ground as we did in the case of the Colombo Port City. Commencing negotiations with Indians on the Western Container Terminal is a positive response.
For comparison, Nepal received Rs. 2,802 crores from Indian Annual Neighborhood Financing – 2020 provisions (irrespective of the brewing Kalapani boundary dispute), while Sri Lanka received only Rs. 2,317 crores over a decade. A few days before President Rajapaksa visited Delhi, without any MFR direction, I brought the neighborhood financing viz. Sri Lankan receipts issue with the Indian hierarchy, and the Indians convinced of the need to assist us. Probably, the sum of $ 450 million reflected this thinking. The MFR must study the reasons and pursue action to attract Indians.
At the request of Dr. Indrajit Coomaraswamy, Governor of the Central Bank of Sri Lanka (CBSL), the Mission negotiated with Indian authorities a $400 million Swap, and the CBSL succeeded. To save Sri Lanka from being placed on the “grey list” of the Financial Action Task Force, regarding money-laundering, the Mission intervened, and CBSL succeeded, not on MFA initiations, but the personal request of friendly Governor Coomaraswamy. Such rare interventions come under the purview of items (a) and (e) of the Mandate, but rarely used.
I would like to mention a lesson learned from PM Modi to prove how the Indians take foll-up action. In 2018, returning from the Maldives, he stopped over in Colombo, and the MoU 2017 would have been discussed. He sent a few officials, led by Dinesh Patnaik, Additional Secretary MEA to meet Colombo-based agencies. My understanding is that the MFA and my Delhi Mission had no role to play. This move or its outputs were never conveyed to the Delhi Mission. We learned it from MEA friends. This lack of cohesive adherence to items (a) and (e) of the Mandate by MFR and other stakeholders, bungles relations building.
MEA Minister S Jaishankar visited Colombo and met the representatives of the incumbent adminstration and demonstrated India’s interest and support. It was a total embarrassment to us to receive information about this visit from ‘Indian Express’ journalist Subarjit Roy, and not from MFR! True to MFA/ MFR tradition, no intimation was conveyed to the Delhi Mission Long live the ‘dead’ Mandates (a) and (e)!
Diplomatic formalities
Apart from the constitutional mandate formalities in foreign affairs are serious businesses so much so, in India, there are no shortcuts available to foreign envoys to access the higher levels of administration without approaching the MEA.
In Sri Lanka, we have observed all superior politicians and administrators meet diplomats without reference to the MFR/MFA. Indians probably do so selectively due to logistical reasons. Here, I experienced this due to personal attitudes toward the Foreign Office. The proceedings of such discussions at higher levels are not shared with the MFR. It prevents informed diplomatic decision-making. The tacit fault lies in those who permit direct access and refrain from reporting to MFR.
In India, a representative of the MEA always sits at discussions. At one-on-one meetings with the Prime Minister, for instance, such representation is absent. From the manner matters are pursued by the MEA, it is obvious that the contents of such discussions are shared with the MEA.
While MEA does not permit direct access to State Government authorities without MEA clearance, we have generally ambassadors directly dealing with our provincial authorities, which could create difficult managerial issues. During my tenure in Delhi, I remember a Governor of a Province, and previously even Chief Ministers showed keenness to deal with India and State Governments, which is ‘dangerous.’ Mandate (a) helps manage this issue.
MoU -2017- A Specific Study
I take the case regarding a Memorandum of Understanding (MoU) signed between Sri Lanka and India in 2017 for economic cooperation, to prove how these Mandates default. I suspect the MFR pursued this MoU only as a reference to a Cabinet Memorandum, though it had much broader implications.
I may quote an issue from the MoU i.e., the Trincomalee Tank Farm Project (TTFP)– as a case study to prove where the silence of the MFA and general apathy and uncertainty of governments create problems even to successor governments. The TTFP had been an undecided issue before the 2017 MoU. The TTFP 2003- Agreement was followed by the government from 2011 to 2018, but dilly-dallying was observed throughout.
For the 2017 MoU Cabinet Memorandum, observations were submitted on TTFP by two Ministers, namely Ravi Karunanayaka, ‘noting’ the Memorandum, and Chandima Weerakkody on the structure of the Project. A ‘confirmed’ Cabinet decision was taken to sign the MoU with stakeholder consultation. But the signed MoU has detailed the Cabinet-approved MoU, though the Cabinet decision has drawn conditions (i.e., further “consultation”, and “separate Cabinet memoranda pertaining to the joint projects.”)
Conceptually, there are two major issues- i.e., the structure of the Project and land ownership. The latter is a crucial issue with Attorney General’s and Cabinet’s decisions showing mixed responses. On these, can someone challenge the legality of revisions in Section iv of the signed MoU? These could have been avoided through “stakeholder consultations” and “separate Cabinet Memoranda” as agreed by the Cabinet. These issues may rekindle negativity and delay finality.
I quote the Supreme Court’s LMS judgment that declared: “A pre-condition laid down in paragraph 1.3 is that an alienation or disposition of State land within a Province shall be done in terms of the applicable law only on the advice of the Provincial Council. The advice would be of the Board of Ministers communicated through the Governor, the Board of Ministers being responsible in this regard to the Provincial Council.” (Sri Lanka Law Reports [2008] 1 Sri L.R: page 172) Considering this status, I contend that the work steps applicable to Section iv of the signed MoU need review. If not, cannot Section iv be challenged on “procedural invalidity?”
Now that the Eastern Container Terminal (ECT), Mattala, the Sampur Solar Power projects (in 2017 MoU) have not been carried out, Indians will naturally pursue the TTFP vehemently. Financially strong parties coerce or intrude on allied economic issues through emergent openings. I am not a lawyer, and I contend that due to the country’s financial crisis, we have provided such an opening to India through TTFP. India may have deliberately strategised indecisiveness on the $1,000 million facilitation. It could resurface if/when Finance Minister Basil Rajapaksa negotiates the financial facilitation. Can he also strategize negotiating on the quoted “procedural invalidities”?
To my mind, the TTFP could also become an economically exciting allied project. Unfortunately, this is not much discussed publicly. In the MoU 2017, Section v reads as “v. A Port, Petroleum Refinery, and other industries in Trincomalee, for which GOSL and GOI will set up a JWG by end June 2017.” These openings will allure renegotiation to reach middle ground, and newly negotiated terms to evolve paths to lessen political embarrassment and summon economic prosperity.
Conclusion
There may be other Missions and personnel with experience with non-adherence to the Constitutional Mandate. Such experiences and issues must be made use of by those concerned in executing the Constitutional Mandate for Foreign Affairs.
I have mentioned India because whenever Indo-Sri Lanka relations deteriorate, Sri Lanka faces political and diplomatic embarrassment, as we have experienced in 1987 during the conflict, in 2013, and 2021 at the UNHRC. Avoiding such situation is the “job” of the main Mandate holder, the MFR.
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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