Features
100% Organic Agriculture:A costly experiment leading to National Disaster – II
by Professor W.A.J.M. De Costa
Senior Professor and Chair of Crop Science
University of Peradeniya
(continued from yesterday)
Measures that contravene the principles of organic agriculture
According to President Gotabaya Rajapaksa, one of the key advantages of converting Sri Lanka’s agriculture into 100% organic is the expectation of a higher price premium for its agricultural products in the global market. It was also argued that any reduction in yield would be off-set by the higher price premium for organic food products. However, with the realisation that crop requirements of potassium and phosphorus, two major plant nutrients which are essential for production of any crop on an economically viable scale, could not be supplied with organic fertilisers, the government decided to import Potassium Chloride (KCl) and to use Eppawala Rock Phosphate (ERP) as sources of potassium and phosphorus, respectively.
Similarly, it dawned upon the advocates of 100% organic agriculture that some of the key pests, diseases and weeds, in large scale agricultural crops, in Sri Lanka, cannot be controlled by exclusively organic means. Blights and soft rots in a range of vegetable crops caused by various bacteria (including Erwinia species) are a case in point. Consequently, the government has allowed the import of certain synthetic pesticides and herbicides.
These are rational moves that bring the initial idealism of 100% organic agriculture back to reality. However, the downside is that despite the rhetoric of 100% organic agriculture, Sri Lankan agricultural products will not receive international certification as ‘Organic’. Therefore, the expected higher price premiums will not materialise and farmer incomes will plummet because of the decreased crop yields.
Many soil scientists, who have expertise on fertiliser, have pointed out that the claimed concentrations of nitrogen, the foremost plant nutrient that is required for crop production, in the organic fertiliser that was to be imported from China, could not have come exclusively from its organic source, the seaweeds. They expressed the strong possibility of this organic fertiliser being fortified with an inorganic source of nitrogen, such as urea, to raise its nitrogen concentration to the levels that were claimed. Therefore, it is possible that this consignment was ‘organic fertiliser’ only by name.
A darker side of this issue emanates from reports of these agrochemicals being smuggled into the country, from India, via the Southern coast. It is reported that the government, and the relevant regulatory authorities and armed forces, are turning a blind eye to this activity. Such tacit approval by the government is akin to how it managed the COVID19-related restrictions during recent months. Therefore, while the government tells the whole world that it promotes 100% organic agriculture, agrochemicals are used on the ground. A similar situation prevailed when the ban on Glyphosate imports was in place, from 2015 to 2018, where smuggled Glyphosate, of dubious quality, was available in the blackmarket.
On 13 October, a government media release claimed commencement of the distribution of 30,000 tons of ‘organic potassium chloride’ imported from Lithuania. It is difficult to determine whether this is a demonstration of ignorance or an attempt to delude the farming community and the general public. There is nothing called ‘organic potassium chloride’. Potassium chloride (KCl) is an inorganic fertiliser obtained from the Earth’s mineral deposits. For well over 50 years, KCl has been the main form of potassium fertiliser for agricultural crops all over the world, including Sri Lanka. In organic agriculture, potassium is supplied in the form of crop residues (e.g. rice straw) which contain potassium as a component of their tissues.
Promised payment of compensation to farmers for loss of crop yield
In the immediate aftermath of the issuance of the Gazette notification, in May, when the strong possibility of plummeting crop yields was pointed out by several stakeholder groups, the Cabinet Minister said that farmers would be compensated for loss of yield due to the absence inorganic of fertiliser and synthetic agrochemicals. The advisors to the Minister, and the few hard-core organic agriculture advocates, claimed that these compensations could be paid from the substantial savings of foreign exchange that would become available because of the ban. However, to this date, this promise has not been fulfilled, despite a significant proportion of the national farmer population, growing a wide range of crops, including paddy, pulses, onions, potato, low-country and up-country vegetables, tea and various horticultural crops, including cutflower and pasture, already incurring substantial losses of production due to the ban of inorganic fertiliser and synthetic agrochemicals during the yala season of 2021.
Ministry officials, task forces and advisory panels
The dis-jointed management (or mis-management) of this vital national issue is exemplified by various personnel in-charge of the Ministry of Agriculture and in advisory panels to the President and the Minister. The Secretary to the Ministry of Agriculture, at the time of implementation of the ban, who showed enthusiasm and optimism for successfully implementing the conversion to 100% organic agriculture, resigned after three months in office, reportedly over a disagreement with a key proponent of the inorganic fertiliser and agrochemical ban who was functioning as the top advisor to the Minister, on importing organic fertiliser in contravention of the Plant Protection Act. Following this resignation, a senior academic, who is an agricultural economist by training, has been appointed as the Ministry Secretary to oversee implementation of the organic agriculture policy. Despite his brilliant academic record as an undergraduate in the Faculty of Agriculture of the University of Peradeniya, in the early 1990s, this official has so far demonstrated little understanding of the biological realities of meeting the national food production targets with the limited nutrients from organic fertiliser and in the absence of commonly-used synthetic agrochemicals to control pests, diseases and weeds of crops.
In the week following the issuance of the Gazette notification, in early May, a Presidential Task Force, consisting of 46 members, which included 20 politicians, several hard-core activists promoting organic agriculture and a miscellaneous collection of agriculture practitioners, academics, industrialists and businessmen, was appointed with the task of transforming Sri Lanka’s economy into a green socio-economy with sustainable solutions to climate change. Preparing a roadmap for the complete transition from ‘chemical farming’ to organic farming (as per the Media Release from the Presidential Secretariat on 10 May) was listed as one task of this Task Force. However, it is notable that the Gazette notification, banning the import of inorganic fertiliser and synthetic agrochemicals, had already been issued on 06 May, effectively transforming Sri Lankan agriculture from the so-called ‘chemical farming’ to organic farming overnight. On examining the track record of the personnel in this Task Force, it is clear that it lacked the balanced scientific expertise to analyse all aspects of a complex issue and plan a difficult operation and provide advice to the President. This deficiency has been borne out by the absence of meaningful action taken by the Task Force and the news of some its members expressing the impossibility of their task. Events of the last five months have shown that there certainly is no roadmap developed and put in place.
In September, the Cabinet Minister of Agriculture also appointed a 14-member Task Force for Sustainable Agriculture, consisting of academics and a few administrators and entrepreneurs. This Task Force also has the same weaknesses of the larger Presidential Task Force in terms of balance and competence in expertise. As expected, no tangible outcomes have emanated from this Ministerial Task Forc, as well.
Given the national importance of the plantation sector of agriculture, the Cabinet Minister of Plantation Agriculture has been conspicuous by his silence and inaction in the Cabinet, the Parliament and in public forums that address this critical national issue.
Visible impacts on different crop sectors and prognosis for next year
The yala cropping season, which immediately followed the implementation of the ban, was completed largely with inorganic fertiliser stocks that had been imported before the ban, but were sold to farmers at exorbitant prices by traders. Although the production statistics are not yet available, it is highly likely that, for a majority of crops, both yields per unit land area and total production in yala 2021 have been below-average. This is because of the yield reductions due to lower rates of fertiliser application and increased yield losses caused by pests, diseases and weeds, which are predominantly controlled by agrochemicals in large-scale crop cultivations. There are reports and images of vegetable crops, both in the up-country and low-country areas, shrunken in size by shortage of nutrition and decimated by diseases and pests in the absence of agrochemicals for their control.
The prognosis for the coming maha season is frightening. There are daily media reports of farmers, from almost all parts of the country, expressing either reluctance or point blank refusal at Pre-Seasonal Meetings (i.e. Kanne Rasweem) to start crop cultivation in the absence of an assured supply of fertiliser and agrochemicals. In a majority of these occasions, farmers specifically request inorganic fertiliser saying that organic fertiliser is simply not suitable for cultivation of paddy and some of the key other field crops such as maize. The government officials at these meetings are unable to provide the assurances that the farmers are seeking. If this situation prevails in the next month and a half, the area cultivated with paddy and maize during this major cropping season will decrease substantially. When coupled with the lower expected yields per unit land area because of the lower nutrition from organic fertilizers and non-chemical control of pests, diseases and weeds, a substantial decline in the total production of paddy, maize and almost all other crops is inevitable. Repercussions of this will be felt in many related food sectors. For example, reduced maize production and the resulting shortage of animal feed in which maize is a major component will cause a reduction in poultry products (eggs, chicken).
The potential social consequences of an overall shortage of essential food items are disturbing to the say the least. A population that has been inducted recently to queuing for rice, sugar, milk powder and gas will have to get used to queues for many essential food items. How disciplined the people will be in the face of this situation over a prolonged period is anybody’s guess.
How has the President and the government responded to this situation?
It is patently clear that the authority to make situation-changing decisions lies with the President. It is also clear that the President has been wrongly-advised by his advisors. More depressing is the observation that members of the Presidential and Ministerial Task Forces are either ignorant or incompetent to analyse the situation and recommend appropriate action or lack strength of character to tell the truth to the President and advise him about what should be done immediately without delay. The bottom line is that the current uncertainty in national food security undermines the national security, the very platform on which the President campaigned and got elected.
After towing the President’s line for a long time, a few government lawmakers have started to acknowledge the reality and have started making noises about being prepared to listen to the ‘peoples’ voice’ and ‘take a step back’. Last week, the immediate-past President went on record saying that Sri Lankan agriculture is at a historic low and that a day may come when he would not be able to go to his home town. Following these statements from those in his own ranks, there was expectation that the President would review his decision. However, his latest reference to the current fertiliser and agrochemical policy during his speech at the Sri Lanka Army’s 72nd Anniversary showed that nothing has changed. While acknowledging that it is difficult, he still wants the current policy to continue.
The President’s argument that he received a mandate from the people to embark on the current policy on fertiliser and agrochemicals because he had included it (even though not to be operationalised in this specific manner), in his manifesto, is a flawed argument. The people do not approve manifestos in their entirety. In an election, people make their choices based on a few key aspects (e.g. national security on the most recent occasion) without reading each and every statement in a manifesto. Therefore, it is nothing more than self-delusion to still take up the position that he has the peoples’ endorsement to continue the current policy.
What should be done immediately?
In view of the clear and present danger of a nationwide crop failure in the coming maha season and the possibility of food shortages, the President has no option but to reverse the ban on inorganic fertiliser and synthetic agrochemicals. Steps should be taken immediately to import, at least 50% of the requirement of inorganic nitrogen fertiliser (i.e. urea). This is assuming that at least a limited fraction of the nitrogen requirement will be supplied from the organic fertiliser that has been produced in-country. In view of the shortage of foreign exchange for importation of nitrogen and potassium fertiliser, crops in the current maha season will have to be managed with 50-60% of the recommendations of inorganic fertiliser, which will provide an economically-viable crop yield to the farmer and a level of food supply to the consumers to avert the impending food crisis and social unrest.
Distribution of this fertiliser among farmers, should be strictly regulated and should be done in phases during the cropping season. This is to prevent their over-application and encourage split-application (i.e. providing the requirement in several splits) and thereby minimise leaching and evaporation losses of urea. The same should be done for potassium chloride fertiliser (the so-called ‘organic potassium chloride’), which is equally vulnerable to leaching losses.
What should be done on medium- and long-term?
Continuation of recent initiatives to expand the share of organic agriculture in the local agricultural production
The drive to produce organic fertiliser, by a wide range of stakeholders and entrepreneurs, in both public and private sectors, is one positive outcome of the ban on inorganic fertiliser and synthetic agrochemicals. These initiatives should be continued. An important step in this regard will be to develop and implement quality standards for organic fertilisers that are locally-produced.
In parallel to the production of organic fertilisers, a drive to produce a variety of organic-based agrochemicals has been initiated. These initiatives should be incentivised and continued with a view to reduce the use of synthetic agrochemicals to expand the practicing of Integrated Pest Management (IPM).
Phased out reduction or complete withdrawal of the subsidies on inorganic fertiliser
The nearly 100% subsidy of inorganic fertiliser that was in place for nearly three decades in Sri Lanka contributed to their over-use and excessive farmer reliance on them while diminishing their interest in adding organic amendments for natural regeneration of soil fertility. While being a financial drain of public funds and foreign exchange, the fertiliser subsidy also inflated the true economic profitability of farming in Sri Lanka. Its gradual reduction (or complete withdrawal) will prompt farmers to seek ways of increasing the profitability of their farming by improving crop management with efficient cultivation practices (collectively called ‘Good Agricultural Practices’).
Promotion and support of research on an economically-viable mixture of conventional and organic agriculture
Excessive reliance of the farmers on subsidized inorganic fertiliser and widely-available, commercially-supported synthetic agrochemicals contributed indirectly to suppression of research on eco-friendly farming practices with less reliance on inorganic fertiliser and agrochemicals. This has contributed to the failure of the current drive to ‘go 100% organic overnight’ because the researchers in the Department of Agriculture had not developed sufficiently effective alternative cultivation technologies when the ban came into effect. However, researchers in the universities and other research institutions (e.g. National Institute of Fundamental Studies, Sri Lanka Institute of Nanotechnology) have carried out useful work over a prolonged period and developed useful technologies, which to a large extent, have been ignored by researchers in the Department of Agriculture and higher officials in the Ministry of Agriculture. Some of these technologies are: (a) biofertilisers and biopesticides developed from microorganisms isolated from local soils and plants; (b) chemicals which are generally regarded as safe to human health (called GRAS chemicals). These technologies and products that are already developed have to be up-scaled and commercialised with government support.
The level of inorganic fertiliser that needs to be used for viable crop production and the feasibility of organic agriculture depends on the soil fertility status of a land and the market needs for an organically-produced product. Therefore, a comprehensive survey of these aspects needs to be undertaken with a view to develop a rational mixture of conventional and organic agriculture in different regions of Sri Lanka.
The hard-core proponents of 100% organic agriculture should realise that it is just not biologically possible. It is turning out to be a costly experiment which is leading to a national disaster. (Concluded)
Features
The heart-friendly health minister
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.
Features
A LOVING TRIBUTE TO JESUIT FR. ALOYSIUS PIERIS ON HIS 90th BIRTHDAY
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.
Features
A fairy tale, success or debacle
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 . )