Features
Constitutional Reforms to ABOLISH the executive presidency NOW the urgent need
Neelan – GL 2020 draft the best we might have had
BY Prof. Savitri Goonesekere
(Continued from last week)
When Chandrika Kumaranatunga took office she pledged to introduce a new Constitution that would repeal what she described in colourful Sinhala as Bahubootha Executive Presidential form of governance. This task was entrusted not to a Constituent Assembly of Parliament but to a group of individuals with a range of expertise, with leadership from, Prof GL Pieris, Minister of Constitutional Affairs and late Dr Neelan Tiruchelvam. Both were distinguished alumni of the Peradeniya and Colombo Law Faculty of that time. They had both competed for the prestigious Rhodes Scholarship. Late Lalith Athulathmudali said that the decision to award the scholarship to GL was based on a careful scrutiny of my husband’s letters of reference to each at some point in their careers. My husband was famous for attaching equal importance to opposing viewpoints and Lalith said they had a hard time figuring out from the references who was best!
Neelan and GL produced perhaps the best Constitution for Sri Lanka we might have had, in 2000. It had an excellent chapter on Fundamental Rights that reflected contemporary developments. It also had constructive proposals for power sharing and the independence of the judiciary and public service from political control. Most importantly, it replaced the Executive Presidency with the tried and tested method of an Executive branch with a Prime Minister and Cabinet responsible to Parliament.
Unfortunately a single provision that enabled President Kumaranatunga to become prime minister for the rest of her Presidential term, was used by the Opposition led by Mr. Ranil Wickremesinghe to tear up into pieces the document on the 2000 Constitution on the floor of the House, when it was presented in Parliament, by Minister GL Pieris. The government fell, and this led to the first “cohabitation” in governance arrangement between President Kumaranatunga of the SLFP, and Prime Minister Wickremesinghe of the UNP. The 2000 Constitution has never entered the discussions on Constitutional reform that followed.
A short period of “cohabitation” was followed by a General Election and a further short second term for President Kumaranatunge. The 17th Amendment was passed by Parliament at this time with the leadership of the JVP and provided for the first time Independent Commissions to strengthen public administration, and a Constitutional Council empowered to make recommendations to the President on high post appointments to the judiciary and public service
Mr. Mahinda Rajapaksa was elected as Executive President in 2005. He was given a mandate to abolish the Executive Presidency. However, the focus of his administration was addressing the armed conflict in the North with his brother, who was appointed Secretary of Defence. Winning the war in 2009 was a catalyst for a sea change in the political life of an experienced and respected politician, who had also related to an agenda of human rights. My husband appeared for him as petitioner, and won a fundamental rights case for him, and also successfully argued the famous Janagosha case on the right to peaceful political protest.
From 2009 Mahinda Rajapaksa went on a different political path, surrounded by family and friends espousing a culture of political patronage that debilitated all institutions of governance. This was an inherent aspect of governance in this country even before that. However misuse of Presidential powers without any inhibitions, and family political patronage and empowerment and cronyism was carried to different and more significant levels. In a feudal culture the perception that the President was all powerful and could not be questioned created new levels of sycophancy or reluctance to express different points of view in the administrative services. This had a serious impact on all institutions and was replicated in the behaviour of Cabinet ministers and others who became notorious for abuse of power and corruption. The Proportional Representation system with the focus on a Party machinery choice of candidates also led to more and more incompetent persons being elected as members of Parliament.
The 18th Amendment to the Constitution that saw a removal of the limitation on terms of the Executive President, a core concept in the 1978 Constitution embedded in Presidential power during a term of office, was perhaps an inevitable outcome. A President who had been elected to office, promising to abolish the Executive Presidency was now quite comfortable with becoming a President for life. His cabinet and government was full of approval for this change. So also the Supreme Court in the judgment of Shirani Bandaranayaka CJ when the 18th Amendment was challenged in the Supreme Court. The environment of acceptance and passivity and self censorship in responding to this change was such that there was silence even in academia on this very controversial Supreme Court jurisprudence. It was the theme of my husband’s oration for the Bar Association, in memory of a former President, Desmond Fernando PC.
2015 to 2022
The protest against the worst excesses of Mahinda Rajapaksa led to its unexpected defeat and the election of President Maithripala Sirisena and what was described as a rainbow coalition of political parties led by Mr. Ranil Wickremesinghe as Prime Minister. President Sirisena promised to abolish the Executive Presidency and was given this mandate by the majority of citizens who helped him get elected to office. This was also a personal commitment given to Maduluwawe Sobhita Thero who led the resistance to the previous Mahinda Rajapaksa government. However, in the first flush of victory he was persuaded to support a Constitutional Amendment that would REDUCE presidential powers and transfer them to his Prime Minister, Mr. Ranil Wickremesinghe. The draft Constitution of 2000 which provided for the abolition of the Executive Presidency was unfortunately not considered in this constitutional reform process.
If anyone expected this change to facilitate cooperation between these two centres of power in one administration that was an impossible expectation. Perhaps it increased expectations on the part of the Prime Minister, and resistance on the part of the President to the anticipated happy cohabitation. Inevitably the “empowered” Prime Minister had to experience the full brunt of Presidential anger when they had conflicting view points on the Arjuna Mahendran, Ravi Karunanayake and Aloysius related bond scam. A hurriedly and sometimes poorly drafted proviso in the 19th Amendment facilitated the Constitutional crisis of 2018 and the replacement of the 19th Amendment “empowered” Prime Minister with (of all people ) Mahinda Rajapaksa whom President Sirisena said he was fleeing from in anticipation of grave violence as a candidate in the Presidential election.
When the Easter Sunday violence took place, Prime Minister Ranil Wickremesinghe, the empowered 19th Amendment Prime Minister, told the nation in a BBC interview that he could not be held responsible for the appalling and reckless lapses in national security because he had been excluded by the President from the National Security Council and “was not in the loop”.
It is the 19th Amendment of the Sirisena/Wickremesinghe government which is the basis of the 21A (MoJ). The Gotabaya and Wickremesinghe government are telling us that this will be the best response in strengthening governance and satisfying the demand for systemic and institutional change. And every one they address including the media and political parties (most recently Maithipala Sirisena led SLFP) is applauding this initiative.
The Opposition’s counter arguments for the 21A (S) to abolish the Executive Presidency appears to be falling on deaf ears, due to ignorance, political expediency or a collective sense of amnesia. The only focus seems to be on a single issue – whether or not to support an amendment prohibiting dual citizens from holding office that may lead to another Rajapaksa sibling being compelled to forfeit his national list seat in Parliament. And that after facilitating another person occupying a national seat in Parliament to become the country’s Prime Minister.
A new Constitution for Sri Lanka as part of Incremental Constitutional Reform
When Minister Wijeyadasa Rajapakshe offers us the prospect of a new Constitution being drafted (after we have emerged from this crisis), he seems to have forgotten the much publicized efforts to do so during the Maithripala-Sirisena Ranil Wickremesinghe governments period in office. What emerged from the Constitution drafting Committee that Mr. Wickremesinghe himself chaired? Large and excellent reports by expert groups working on important areas of governance were produced. What happened to those reports? What also happened to the report submitted to government by the Lal Wijenayake Committee on Constitutional reform after islandwide consultations over a period of time? What happened to the report of the Manouri Muttetuwegama Committee on Transitional Justice mechanisms? And the Truth and Reconciliation Mechanism law that was drafted at the request of the government by a committee chaired by me with a dedicated team of persons who gave their time freely without fees?
Even more curious, what happened to the report of the Constitutional drafting Committee appointed by President Gotabaya Rajapaksa? This committee was chaired by Romesh de Silva PC with, it is said, the leadership of Minister GL Pieris. Where is this draft Constitution and what is its approach to the Executive Presidency and “systemic and institutional change?”
The Way Forward
Faced with a crisis of proportions and impact that has devastated the country it is incredible that we are now engaged in another round of political play acting on constitutional reform. Let us at least on this occasion take serious stock of the very real breakdown in governance that has led to this “man made and voluntary economic disaster” in a country renowned for its human development indicators in South Asia. In doing so let us recognize that we must abolish the Executive Presidency NOW and not later. This requires heeding the voice of the Aragalaya, and supporting the 21A (S) that will abolish the Executive Presidency and will also bring with it the institutional and systemic change in our governance that has been promised for decades by successive governments but never realized due to narrow and selfish political agendas. Saying Yes to the 21A (S) and No to the 21A (MoJ) which is a token gesture of Constitutional reform may be a last chance to save our country from further destabilization and “man made” disasters created through corrupt, inefficient and reckless governance.
Heeding the Voice of the People, Constitutional Reform and the Referendum Concept
The Rajapaksa governments 2005-2014 and 2019-2022 gave scant respect to the “Voice of the People”. Governments in which Mr. Ranil Wickremesinghe had a leadership role, like the Yahapalanaya government, 2015-2019, appointed many “Consultative” and Advisory” Committees, on a range of important subjects of public concern, including Constitutional Reform. Yet the government consistently discarded their reports. Research on the functioning of these “Committees” demonstrates that the Yahapalanaya period had more consultative Committees than any other government. The record of law making and policy formulation in this period however demonstrates clearly government inaction rather than action for change.
So “consultation and listening to the voice of the People and experts” can mean nothing more than political rhetoric. This can also lead to unexpected consequences. The failure to improve and achieve intra-party democracy, in the UNP, the party led by Mr. Ranil Wickremesinghe, despite the many Reports commissioned and Committees appointed, eventually led to a significant group breaking away, and forming a new party as Samagi Jana Balavegaya.
These experiences hardly inspire confidence in the Prime Minister’s address to the nation, saying he will appoint 12 or 15 “Committees” for effective public administration and financial management. A large Expert Advisory Committee of eminent economists, has also been appointed to the Central Bank. A promise has been made by the Prime Minister to provide opportunities for youth participation, including from the Aragalaya, in some of these Committees. The latter initiative is said to help youth to understand the difference between protest and participatory democracy!
It is time that our politicians understand what participatory democracy means, and that the people can see the difference between this concept, and the “Committee Consultation” fetish that is a diversionary political maneuver to resist or avoid change. The Constitutional requirement of having a Referendum and hearing the voice of the People, to initiate major Constitutional reform, must also not be permitted to prevent efforts to abolish the Executive Presidency through Constitutional reform. This is also a demand of the Aragalaya and street protests, which include a large and diverse youth population.
Article 3 of our Constitution articulates the concept of the Sovereignty of the People as including the “powers of governance”. Article 4 clarifies the MANNER in which the PEOPLE’S POWER OF GOVERNANCE can be EXERCISED AND ENJOYED. It is on the basis of this concept that it can be argued that the President in exercising the Executive power of the People with a Prime Minister and Cabinet, collectively responsible for the government of the country under Article 43, has a LEGAL and not just an ethical obligation to fullfil his responsibilities of good governance, preventing the type of economic and political crisis confronting the nation today.
International law is considered “law” that creates legal obligations, despite the limitations on enforcement. Consequently, incapacity for enforcement no longer indicates that there is no legal obligation. A President and Cabinet Ministers who fail in their legal obligations in governance, can be called upon by the People to resign. It is the lack of a procedure for enforcing that legal obligation of resignation, except by impeachment of the President, that has contributed to the urgent need for Constitutional reform to ABOLISH the Presidency in the executive branch of government.
The 19th Amendment made the President liable for a violation of rights and for the Supreme Court to provide “just and equitable relief” for such a violation. This provision was retained in the 20th Amendment. The possibility of a petition for violation of citizen rights, and a call for just and equitable relief in the form of a court order on resignation, in light of the serious responsibilities in governance under the Constitution, may seem theoretical and only aspirational at this time.
The Attorney General has advised that the Presidential status in the executive branch cannot be removed without a two thirds Majority support in Parliament, and a Referendum. The Referendum issue, and its impact on 21 A (S) is therefore an additional concern. This seems an obstacle in effecting a critically important Constitutional change, in responding to our political and economic crisis.
The Constitution has a clear provision in Article 83 which indicates that a two third majority and a Referendum are required for the amendment or repeal of Article 3. Therefore Article 4 on the status of the President in the Executive branch of governance is NOT covered by the Referendum clause. The requirement for a Referendum is thus an interpretive perspective, based on jurisprudence in the Supreme Court linking Articles 3 and 4. That jurisprudence is also not consistent.
In the 20th Amendment case counsel cited earlier cases linking Articles three and four and argued that since the concept of Presidential power had been significantly modified by the 19th Amendment, a Referendum was also necessary to go back to the earlier concept of near absolute Presidential executive power. The court in its opinion rejected this interpretation, and did not follow the jurisprudence linking Articles three and four on the meaning of executive power. It is this interpretation that is being cited in arguing that 21 A (MoJ) seeking to only reduce Presidential powers that can be passed without a Referendum.
There is nothing to prevent the other argument being canvassed again in litigation on the current Constitutional Bills. Besides the Referendum issue can also be resolved if the Supreme Court follows the approach it took in the Port City Bill litigation, where the Court decided that it was not necessary to consult the Provincial Councils on a matter that required their consent, when it was impossible to do so as these bodies were not functioning at the time. The current situation and an argument that it is not possible to have a Referendum, in the current context, is supported by that case.
The lack of clarity on the issue of the need for a Referendum does not mean that this should be used to prevent support for the 21A(S) that seeks to abolish the Executive Presidency. Besides holding such a Referendum is not as complicated and expensive as a General Election, that we cannot afford at this time. All that a citizen is required to do is to say “yes or no” to a single question, of the abolition of the Executive Presidency. They will be happy to provide the piece of paper for this task to the Election Commissioner’s officials, if the State cannot afford to provide this, rather in the manner they are collecting the one rupee coins, after the Minister said the State subsidizes the cost of a rupee for a litre of fuel!
If the Referendum issue is too complicated to resolve in initiating Constitutional reform to abolish the Executive Presidency the time may be ripe for demanding that the President exercises his powers under Article 86 of the Constitution to “submit to the People at a Referendum any matter which in his view is of national importance”. He claims that he has a mandate from 6.9 million people to complete his term. That is now an issue of public concern for him as well as the People. He can hear the Peoples’ voice, on this matter through a Referendum, helping to also solve the differences in viewpoint between him and the Peoples’ Movement of Aragalaya.
Many of the persons involved in this movement for systemic and institutional change are the youth of a next generation, who have come together from diverse communities that link across class, caste and race, calling for a different approach to accountable governance, realizing how poor and reckless government impacts the lives of the People and their future. Mr. Ranil Wickremesinghe has cited a literary source, the German playwright Bertol Brecht’s Caucasian Chalk Circle to explain the manner in which he will perform as the Prime Minister of the country.
Perhaps he as well as citizens, especially the youth, engaged in the Aragalaya should peruse the poem of WS Senior, an Englishman who was a poet and educationist in colonial Sri Lanka. His ashes are interred in Haputale with an epitaph from a poem he wrote on leaving this country: “oh my soul it will break with longing, it can never be good bye”. His poem “The Call of Lanka” has these lines:
I climbed o’er the crags of Lanka
And gazed on her golden sea
And out from her ancient places
Her soul came forth to me
“Give me a Bard said Lanka
A Bard of the things to be
A Bard for my joys and pains
But most shall he sing of Lanka
In the brave new days that come
When the races all have blended
And the voice of strife is dumb
Hark Bard of the fateful future
Hark Bard of the bright To-Be
A voice on the verdant mountains
A voice on the golden sea,
Rise Child of Lanka, and answer
Thy mother has called to Thee.
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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