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How television came to Sri Lanka

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JRJ, Anandatissa and Upali Wijewardene were among key players

When JRJ was the Minister of State in the Dudley cabinet of 1965 he advocated the introduction of Television to the country. This was typical of his bold thinking and awareness of what was going on around us in the world, which was not a great characteristic of the Dudley cabinet. His suggestion was shot down by Dudley’s media advisors led by Neville Jayaweera who went on to describe the offer of TV as ‘A gift of a Rhinoceros’.

Soon after that JR’s powers over the media were withdrawn by Dudley and he decided to bide his time. One of his earliest acts as Prime Minister in 1977 was to initiate action on introducing TV. Since colour television is today the main media outlet in the country let me narrate how Jayaweera’s ‘brute’ came to be installed.

It began when JRJ called Minster Wijetunga and me to his office and told us that Anandatissa de Alwis, who was then Speaker, had informed him that Upali Wijewardene was talking to the Japanese about introducing TV as one of his investments. JRJ wanted us all to to put our heads together and bring in TV as a national venture since the SLBC was the monopoly radio broadcaster at that time and the subject had been assigned to our Ministry.

The following day the Speaker Ananda invited my minister, Upali and me to his chambers in the old Parliament to discuss JRJs order. Fortunately the three main protagonists – my minister, Ananda and Upali were all friends from much earlier and the discussion was very fruitful apart from the fact that we knew the PM was taking a personal interest in the matter.

There was a strong bond of friendship between Ananda and Upali. The latter had begun his business in a small way by taking over a failed business which belonged to his wealthy maternal uncle Sarath Wijesinghe. This was a small scale business of making sweets under the Delta brand. However the UK returned Upali knew that demographically this group of consumers were bound to grow with the youth segment in our population increasing exponentially.

He turned to the leading advertising agency of that time J Walter Thompson of which Ananda was the managing director. At that time most businessmen did not look to advertising as a necessary ingredient of marketing. Ananda was an advertising genius who had first branded the UNP Youth League as a progressive and fashionable offshoot of the Grand Old Party.

At that time there were only three advertising specialists in the country. They were Ananda, Reggie Candappa and Tim Horshington. Their main media outlets were Lake House, Times and Radio Ceylon. All three had good contacts in these offices having worked there earlier as journalist, layout artist and announcer respectively. They were also Bohemians and irreverent types who knew everybody and could see the sun go down in congenial company.Later all three befriended me, especially Ananda who became my minister and Reggie who made me a member of the exclusive Colombo Club of which he was a live wire. Ananda was a magnificent speaker on the social circuit and a raconteur who knew all the inside stories of political and social life in Colombo from the time of Independence.

Lately in his career, I was considered his protege and became part of his listener’s club and many of the revelations in my autobiography owe their origins to those intimate, fabulous drinking and eating sessions usually held at Ranjit and Lucille Dahanayake’s residence in Colombo 3. Upali, whose horse racing activities were encouraged by Ranjit, who was earlier a jockey and later a gentleman rider, was a frequent visitor at the Dahanayake residence, and an equally expansive story teller.

The idea of entering the publishing business came to Upali at these conversations. As he himself acknowledged in an article I had asked Gamini Wijetunga who was the editor of ‘Desathiya’ our official magazine, to interview Upali who was then the Director General of the Greater Colombo Economic Commission [GCEC] now the Board of Investments, since many had heard about him, frequently critically, but did not really know about his background.

We published a cover story on him and ‘Desathiya’ was not only sold out but it also created a sensation because the leading politicians wanted to keep Upali out of the limelight. Immediately Premadasa and Ronnie protested through their mouthpieces, but our minister feigned ignorance knowing that the big chief was not averse to a little inhouse mischief.

Upali never forgot Gamini Wijetunga and would frequently telephone him to get his advice. Typically Premadasa wanted to do something quickly about this perceived challenge. He started his own magazine which was a carbon copy of ‘Desathiya’ but much better funded through his housing department. He recruited Gunadasa Liyanage at an attractive salary with perks, to be the editor of his magazine.

Since up to then Liyanage had been a fan of Ronnie de Mel, we suspected that he and the PM had closed ranks against our magazine and Gamini Wijetunga in particular. This encounter triggered a spate of ‘Desathiya’ clones loyal to Ronnie, Lalith, Gamini, Ranil and many others, freely using their publicity budgets.

Our canny Sinhala journalists encouraged this magazine spree because they were offered salaries and perks way beyond their newspaper emoluments. It also sparked off an undesirable tendency among ministers to set up within media enterprises their own ‘moles’ who were like agents looking after the interests of their unofficial paymasters.

Any evening visit to a minister’s residence or party headquarters would find these ‘paid hirelings’ hanging around to brief their benefactors and more often to create havoc in party circles by spreading gossip. Unfortunately that tendency has now multiplied with a permissive ‘political culture’ where moles are wined and dined and are even found carrying out errands for their newspaper owners.

Ananda’s advertising acumen made the ailing Delta toffee business to turn around and become a money spinner. Upali invented a special type of container for the toffees, held dealer conventions for boutique owners, increased the advertising budget and brought in radio jingles. He started newspaper contests and started attacking rival products like `Bulto’ toffees which had captured a major market share.

The rise of Delta created in Upali a fascination for modern advertising and publicity. Later he became a spectacular media baron who turned his personality into a great bargaining chip in negotiations with banks and other financial institutions. With Delta restored to health, Upali attacked Kandos. Kandos was a middle level company based in Kandy (hence Kandos), which used the cocoa grown in the Kundasale area to make chocolates.

Its majority shares were owned by an old world Burgher gentleman who did not have the resources to take the company to the next level. Then Upali started his trade mark investment approach by acquiring a minority shareholding. He then quietly bought up more small shares and with a strong platform launched an aggressive attack –on the main shareholder. The old man who did not have the resources to fend off this attack gave in and sold his shares to Upali.

Having acquired control of Kandos, Upali invested in good managers and another Ananda led publicity campaign. He borrowed from banks on the strength of the Kandos balance sheet and went international with his product. Seeing that his cocoa supplies from Kundasale were both insufficient and expensive he entered Malaysia at a time when it was soliciting new investments. With his Cambridge and UK credentials which impressed the Anglophile Malaysian upper class he entered the much larger consumer market in that country.

I remember visiting supermarkets in Kuala Lampur and Singapore at that time and feeling proud when Kandos products were prominently displayed in them. From buying cocoa it was a logical next step to buy cocoa estates to safeguard his supply chain. Upali then bought cocoa and tea estates in Malaysia and Sri Lanka through his well-established technique of quietly accumulating shares till he could make a pitch for controlling the company. In all this he was advised on the media side by Ananda who became one of his favourite ‘elders’.

In the last days of the Dudley administration JRJ and Ananda as his Permanent Secretary, had backed Upali when he started to link up with emerging Japanese Companies instead of trying to enter the already saturated import market from the UK. The Japanese were fast moving up in global trade while UK- the sick man of Europe – was on a downward spiral, not least because Japan was beating them at their own game.

Upali started to assemble radios with parts imported from Japan. When that became a success he started to assemble Mazda cars. With typical panache Upali donated the first three Mazdas to come off his assembly line in Homagama to his mother, JRJ and NM Perera. It is not difficult to imagine that NM Perera’s name was suggested by the mischievous JRJ – Ananda combine. To his credit NM as Finance Minister backed Upali to the hilt.

Partly because Ananda and I interested him in media Upali started a newspaper publishing house. As was his wont he wanted to start right at the top. He brought the latest printing technology. He also unhesitatingly raided the journalistic staff of other newspapers by offering them higher salaries. He brought an Englishman as a consultant following his father’s brother D.R. Wijewardene who had done the same when he established Lake House.

When Upali heard that I was leaving for Singapore we met in Ranjit Dahanayake’s house where he offered me double my Singapore salary to work for him. I refused because I was not a working journalist. Long after his death, on the invitation of the Editor of the Island newspaper I wrote the following memoir about Upali and the beginning of that landmark paper.

“While felicitating `The Sunday Island’ on its 15th anniversary, I recall the early days when Upali Wijewardene set up his newspaper group. The Ministry of State of which Anandatissa de Alwis was Minister and I was Permanent Secretary, was located in the Indian Bank building in the Fort area. We moved there because it was in close proximity to both Lake House and the Times building which housed the leading newspapers of the day.

“The Investment Promotion Board (GCEC) was housed in the fourth and fifth floors of the same building. So we would often meet Upali Wijewardene and his Media Manager Vijitha Yapa who later became the first editor of ‘The Island’. I remember that Mr. Wijesiriwardene, son of the famous Mr. D.B. Rampala, was also a member of Upali’s team that did the preliminary work in setting up the paper.

“I clearly recall the contretemps over the telecasting of a news item about the Upali Newspapers, on the first day ‘Island’ and `Divaina’ hit the streets. I asked the TV organization which came under the State Ministry to give it maximum publicity. For the first time Sri Lankan viewers could see on their small screens the giant presses rolling, newspapers being bundled and finally being sold on the street.

“We also carried interviews with readers who naturally welcomed a new fresh-looking newspaper.

This newscast raised the ire of several bigwigs including Prime Minister Premadasa who was suspicious of Upali’s moves, particularly because the latter had said in his usual provocative way that he would like to be the next President of Sri Lanka.

“There was even talk that President J.R. Jayewardene was backing Upali, which may have caused some heartburn among politicians who fancied themselves as JRJ’s successors. They all complained to I lie President regarding this alleged `abuse’ of the media. Though I heard of these moves by some ministers it did not worry me overmuch since my Minister Anandatissa de Alwis was quite satisfied with this broadcast.

“The following day I was summoned to Ward Place and the President wanted to know why we had featured the Upali Press. I was sharp enough not to bring political opponents into the picture and merely stated that Lake House people were upset by this. I replied that the launching of a new national newspaper was news and that by any standard it merited inclusion in the day’s news bulletin. President JRJ good naturedly accepted this explanation, particularly my statement that the Chairman, Lake House cannot be the arbiter of TV news selection.

“Perhaps to satisfy our critics he added sternly that in future the same high degree of sympathy should be shown to other newspapers when they came out. When I told him of this outcome, Anandatissa merrily rang up Upali and had a good laugh.

“All this goes to show that governments of all hues are apt to keep a wary eye on what newspapers do. There are many reasons for this. Perhaps the most important is the government’s desire to set and dominate the agenda of public discussion. They are very happy when newspapers, particularly the state media, adopts the governmental agenda. Equally they are most dismayed when newspapers, particularly those like 1he Island which have strong opinions, begin to set the agenda.

“What we need now therefore is the emergence of a political culture which recognizes the role of dissent. It is a culture which is difficult to establish. Nevertheless, we have to persevere since it is the bedrock of democracy”.

First Steps for Television

This was the background to the first meeting on introducing TV which was held in the Speaker’s room in early 1978, attended by Ananda, Wijetunga, Upali and me. Upali, with his Japanese connections, had already contacted the Nippon Electrical Company [NEC]. He suggested that we go for the Japanese product as it was based on ‘state of the art’ technology.

The following day the Minister and I met JRJ in office. The PM said that he wanted TV to be a state venture supervised by the Media Ministry. He agreed that we should look to Japan for TV technology. Accordingly, I was asked to negotiate with the Japanese Embassy in Colombo and also speak to the Finance Ministry for budgetary provision to procure the equipment.

At about the same time, when there was public discussions about introducing TV, two young men were also investigating the possibility of setting up a private TV station. They were Anil Wijewardene, son of Sivali who was D.R. Wijewardene’s eldest son and Shan Wickremesinghe son of Nalini, the eldest daughter of D.R. Wijewardene. They were both therefore the nephews of JRJ who was happy that this duo were planning to set up their own TV station.

From time to time he would ask Minister Wijetunga for a progress report on their project, but I knew that he was being regularly briefed by the young men who had easy access to him. In fairness it must be said that they did not cut corners and were diligently seeking the several approvals necessary for the project.

Since Wijetunga was keen to get the goodwill of his boss I kept an eye on their progress. This was not difficult because Shan at that time was my immediate neighbor in Siripa road, where many of the immediate relatives of the Wijewardene’s had their imposing residences.At this stage we had a stroke of luck. The Japanese Ambassador here was Ochi who had been earlier an official of the Japanese Finance Ministry. Before that he had been an executive of the Nippon Electrical Company. It is well known that Japanese Ambassadors have close ties with their corporate world. Ochi was a quintessential ‘Economic Club’ man and was very positive about Japanese involvement in bringing TV to Sri Lanka.

By this time the German and French Ambassadors were also making overtures through their local agents, to be the suppliers. I could use these offers to leverage concessions from the Japanese. Then Ochi, who was determined to win the contract, dropped it bombshell. In order to secure the project for his friends in NEC he said that he will get the whole project for us free of charge. It will come as an outright grant.

I realized the value of his offer and quickly informed JRJ about it. At first he refused to believe that this was possible. A grant of this magnitude was quite extraordinary. But he was pleased when I told him that they were giving it in appreciation of his contribution at the San Francisco peace conference. Before this offer was nailed down the Ambassador and I had to indulge in some obfuscation.

The grant could be given according to Japanese law only of it served a public purpose and a commercial TV station would not pass that test. So we prepared a request for a TV station for the promotion of education. Even now the original agreement carries that objective, even though it has been observed in the breach from the beginning of transmissions. One of the studios in Rupavahini is specially designed to facilitate the making of educational programs and we did start broadcasting lessons in English and Mathematics which won awards at international competitions.

After he was convinced that we were getting the latest type of TV station as a grant, JRJ summoned us and the Japanese Ambassador to President’s House for a final announcement and a celebratory meal. A photograph taken at this historic meeting is reproduced in this book. In it, with the President is Minister Wijetunga, Ambassador Ochi, Sivali Wijewardene [representing his son Anil] Shan Wickremesinghe, Eamon Kariyakarawana [representing SLBC] and me.

After that official meeting it was all systems go and we started working on the project in earnest. I liaised with my friend Akiel Mohammed, Director of External Resources of the Finance Ministry, to finalize details of the grant which was to be announced in the forthcoming budget. In the meanwhile we had to take some urgent decisions. The first was to get the land adjoining SLBC released for the proposed TV station.

At that time it was used as their playground by the Ladies Hockey Club of Colombo. Hidden on a side was an illegal ‘hooch’ bar which was patronized by the artistes and officials of the SLBC. They were not amused when their favourite ‘water hole’ was given a quit notice. However they soon relocated in a place even closer to the studios and there was satisfaction all round.

A more serious problem arose regarding building the main office and the studios. Normally even in our foreign funded projects the practice was for the local side to provide the land and buildings. I knew that if our PWD was to be given this task there would be inevitable delays and the opening would have to be postponed. That was our experience with other projects.

So I requested the Japanese side to include the design and construction of the TV premises in the grant aid. After some discussion the Japanese agreed and we were spared the necessity of asking for supplementary estimates and work plans from our officials. I was happy with the success of my negotiations, and we began the project without delay.

Reshuffle

At this stage JRJ decided to reconstitute his Cabinet. This was partly because Ranjan Wijeratne, who as Secretary to the Ministry of Agriculture, had complained that his Minister EL Senanayake who was a senior in the Cabinet, was inefficient and perhaps somewhat lacking in rectitude. There was a talk of lack of transparency in tenders for the purchase of fertilizer.Anyway the President’s plans for rapid agricultural growth which he signaled by appointing Wijeratne, who was an agriculturist of high repute, was not being realized. So he made EL the Speaker, a post which had much prestige and no tenders. At the same time he had to respond to the tourist trade which was complaining of a lack of cooperation from the Minister of Tourism Mrs. Kannangara who was constantly fighting with her Secretary Balasuriya who was a senior CCS officer.

In a smart move he brought in Anandatissa de Alwis to the Cabinet as Minister of State and assigned the subject of tourism to that Ministry. He transferred Wijetunga to the important Ministry of Posts and Telecommunications which showed that he appreciated our role in promoting TV. Wijetunga was keen that I accompany him as Secretary to his new Ministry. But the President decreed that I should remain in the media ministry with Ananda and continue with the TV project.

He added the portfolio of tourism to our Ministry, because Ananda had presided over that subject as Secretary to JRJ in the Dudley Cabinet. Mrs. Kannangara’s Ministry was abolished. Since Balasuriya was my neighbor at Siripa road this was an embarrassment to me especially since my two daughters were taking piano lessons from Mrs. Balasuriya who was a well-known teacher. Among the other children who were Mrs. Balasuriya’s proteges was Sajin Vass Gunawardena who was something of a musical prodigy then. As the mischievous son of our University friend Abey Vass Gunawardena, Sajin was in and out of our house in Siripa Road.



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Features

The heart-friendly health minister

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Dr. Ramesh Pathirana

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.

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A LOVING TRIBUTE TO JESUIT FR. ALOYSIUS PIERIS ON HIS 90th BIRTHDAY

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Fr. Aloysius Pieris, SJ 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 on Nov. 23, 2019.

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.

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A fairy tale, success or debacle

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Ministers S. Iswaran and Malik Samarawickrama signing the joint statement to launch FTA negotiations. (Picture courtesy IPS)

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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