Features
Beyond constitutional politics and polemics
Secretary of State Mike Pompeo and US Ambassador to India Kenneth Juster greet one another upon Pompeo’s arrival at the airport in New Delhi on Monday. PTI
by Austin Fernando
All quandaries on constitutional amendments are now over with an impressive victory for President Gotabaya Rajapaksa, and the country looks forward to the implementation of the 20th Amendment (20A), to serve the people more efficiently, effectively, and economically.
Although Minister of Justice Ali Sabry declared that all 20A provisions had been in the JR Jayewardene Constitution previously, there were a few differences. Considering the volume of amendments, this stance is passable, though not exact. My observation is that Presidents Jayewardene, Ranasinghe Premadasa and Mahinda Rajapaksa performed effectively in comparison to attain their development objectives through the 1978 Constitution.
Governmental performance
Economic performance is an essential ingredient in political performance and management. It is because the economics of development under all regimes has been an evaluation yardstick and also publicly questioned.
Performance by Presidents, Prime Ministers and governments are not guided and determined only by Constitutions. If Constitutions could facilitate smooth performance, why didn’t it happen during tenures of all Presidents exercising power according to the 1978 Constitution? Until 2009, they had failed to defeat terrorism. Corruption increased. The economic morass continued.
The development of a country hinges on the quality of political and business leadership, national security/stability, research/ technological /educational standards, labour legislations, foreign direct investments, foreign assistance/aid, environmental soundness, diplomacy, international political behavior, and positive responses. The Constitution could boost development, but it alone is not sufficient.
Successes do not preclude criticisms that were aplenty against the aforesaid three Presidents. Some criticisms were even acceptable as regards the moral decadence due to the open economy, proliferation of dangerous drugs, or the construction of an unoptimizable port, airport and other such infrastructural projects and debt traps.
Human rights
One criterion for foreign assistance is a country’s respect for human rights. I may quote Rights watchdog Meenakshi Ganguly, of Human Rights Watch- South Asia, to prove this point. After the election of President Gotabaya Rajapaksa, she said: “The Sri Lankan government needs to hear that other countries are watching and will respond to renewed abuses.” This threat has not gone away.
Such issues will be taken up when the UNHRC meets in early 2021. Britain has already decided to withdraw the LTTE ban. Additionally, anti-China attitudes could lead to the harassment of Sri Lanka even indirectly. Contrarily, the Chinese have given assurances of bailing us out.
Even after the passage of 20A, President Gotabaya Rajapaksa cannot expect to be exempted from such attitudes, rules, and standards. I will highlight some immediate reactions experienced with selected internationals. The way foreign powers have responded to the incumbents after the presidential and parliamentary elections will be a guide to observe the trends.
India
Immediately after the presidential election, India showed up in Colombo. President Gotabaya Rajapaksa also positively responded and the traditional first destination visit was to Delhi. Former President Maithripala Sirisena also did so, followed by another for the second inauguration of PM Modi.
Such visits provide opportunities to evaluate silently how foreign powers respond. I had the privilege of participating in all three visits by Presidents Sirisena and Rajapaksa. President Sirisena’s first visit was considered by Indians as a grand opportunity for novel openings and approaches, having experienced a deterioration of diplomatic relations under President Mahinda Rajapaksa’s tenure.
However, the agreement signed by Ministers Malik Samarawickrama and Sushma Swaraj in 2017, concerning several large-scale projects, apparently to spite Chinese political/economic interference in Sri Lanka, did not reach fruition. Indians did not forgive the Sirisena-Wickremesinghe government although formal relations were maintained respectfully.
The difference in diplomatic relations is reflected in many ways. This was seen from how PM Modi responded when President Gotabaya Rajapaksa visited India in November 2019. Their one-on-one meeting lasted 55 minutes, and India offered US dollar 450 million to Sri Lanka in assistance. Perhaps, body chemistry of the two leaders clicked. PM Mahinda Rajapaksa once criticised Indians for having contributed to his defeat in 2015. India has proved that there are no permanent friends or permanent enemies in foreign relations, and it is only the mutual interests that matter.
Indians expected the fast-tracking of projects related to the Eastern Container Terminal (ECT), the Mattala Airport, and Trinco Petroleum Tanks. But there has been no positive follow-up even eleven months after President Gotabaya Rajapaksa’s discussions with PM Modi. The COVID-19 pandemic could be one reason for this delay. But a fresh dialogue is necessary if India is to be kept in the development loops.
Recently, PM Modi offered a $15-million grant for the promotion of Buddhist cultural exchanges, but his officers are slow in finalizing requests for a debt moratorium and an additional $1.1-billion assistance discussed during the visits of Rajapaksa brothers in November 2019 and February 2020. Positively, the Reserve Bank of India signed a swap of $400 million. If such needs are not met, the vacuum will be filled by another.
For comparison, Indian External Affairs Minister committed a 100-million-dollar grant and a project loan of 400 million dollars to the Maldives in mid-August this year, showing assistance did not depend on demography, revenue generation, or socio-economy, but on other priorities. The swift assistance to the Maldives and the delay in responding to our request may be conveying a message that should be heard and understood by Sri Lanka.
I quote another Indian investment in Bangladesh for comparison. The Bangladesh Economic Zones Authority was ready (mid-2020) to start site development for an Indian Special Economic Zone, where billions of dollars in investment were expected from India. Sri Lanka was not so fortunate even though such potential was in the 2017 agreement. The government must learn from Bangladesh experience.
China
Quite the opposite response was shown by the Chinese who have already handed over 500 million dollars (March 2020). When the Chinese Minister Wang Yi met Foreign Minister Dinesh Gunawardena, the latter thanked China for its consistent contribution to Sri Lanka’s development process as well as their support at numerous regional and international fora, like the UNHRC. China and Russia have been helpful throughout.
Chinese involvement in infrastructure development has drawn severe criticism. This is something common throughout the world as regards the Chinese investment through the Belt and Road Initiative (BRI).
Another Chinese intervention took place recently when Senior Chinese diplomat Yang Jiechi met President Gotabaya Rajapaksa, who reportedly said: “Sri Lanka will firmly commit itself to deepening friendship with China, and is willing to make every effort to press forward the key BRI cooperation projects such as the Colombo Port City and the comprehensive development of the Hambantota Harbour.” This would not have pleased the Indians and Americans, and even the Japanese, who recently lost a light rail investment project here.
When Yang met PM Mahinda Rajapaksa, just after the latter’s discussion with PM Modi, the PM thanked China’s support for combating COVID-19, adding that China’s strong support in various fields had helped Sri Lanka strengthen its capacity to resume work and production amid the pandemic.
Finally, it was revealed that China would also help mitigate the financial crisis faced by Sri Lanka.
The Framework of the Strategic Cooperative Partnership between China and Sri Lanka embarked on, in 2013, gave hope of advantages through development but achievements have been slow in coming. The recent high-level Chinese visit here points to a desire to accelerate it. It must be noted that such interventions with other countries (e. g. India) were slow. The delay between bureaucratic decision-making and politicized decision-making could be the reason.
USA, Quad, and influences
The incredibly positive relations build-up by Yang Jiechi is followed by US Secretary of State Mike Pompeo’s visit to Colombo. While arrangements were being made for Pompeo’s visit, the US announced that it would urge Sri Lanka “to make ‘difficult but necessary choices’ on its economic relations”. The reference to difficult economic relations invariably meant the partnering with China. The MCC is another project the US is interested in.
The US spokesperson made it abundantly clear, saying “We encourage Sri Lanka to review the options we offer for transparent and sustainable economic development in contrast to discriminatory and opaque practices.” Media reports show that this message was partially conveyed to several Ministers by the American Ambassador Toeplitz when she met them.
The Chinese Foreign Ministry dismissed the comments as a manifestation of the “Cold War mentality.” Its spokesman Zhao Lijian responded, “Attempts to use coercion to obstruct normal cooperation between countries will not succeed.”
Concurrently, Mike Pompeo has recently suggested (after the Tokyo Quad meeting) that the Quad should be institutionalized: “We [Quad members] can begin to build out a true security framework” for the Indo-Pacific. He also described the Quad as the “fabric” that could “counter the challenge that the Chinese Communist Party (CCP) presents to all of us.” It is clear Pompeo is gathering support against China.
In this context, meeting Pompeo after Yang Jiechi will be an embarrassment for Rajapaksas. In fact, a few months ago CCP was considered as a guide for their political party. Yet, the US will see whether Sri Lanka is prepared to counter the CCP challenges and to what extent. This is not surprising especially after India agreeing to sign a military agreement with the USfor sharing of sensitive satellite data and conducting a dialogue to counter China’s growing power in the region. It may be appropriate for Sri Lanka to remain cautious.
As commentators say, Chinese behaviour and attempts to re-order the region have caused concern among the Quad members. They believe that Quad may have to discuss a rule-based big picture of the Indo-Pacific Region, especially how to reshape China’s behaviour, and under what conditions they would reassess China as a responsible stakeholder. Pompeo is here after the Quad Foreign Ministers Meeting in Tokyo. Given this situation, how Sri Lanka should deal with him is a challenge.
Diplomatic conflicts and us
Countries like Sri Lanka sometimes become playing fields for powerful countries. US Ambassador Alaina Teplitz recently said that the US goal “in responding to this request (MCC) is to alleviate poverty and to boost inclusive economic growth” and identifying Sri Lanka as “a sovereign leader in maritime security”, which are indisputably favourable recognition of Sri Lanka.
But her statement “Sri Lanka should engage with China in ways that protect its sovereignty” angered China, which responded directly. The Chinese Embassy in Colombo stated that “with great shock and strong discontent, the embassy learned about the US Ambassador’s interview with a local newspaper, in which a foreign envoy from a third country openly played off China-Sri Lanka relations and severely violated the diplomatic protocol.” The Chinese are extraordinarily concerned with the US violating Sri Lanka’s diplomatic protocols. Having been a High Commissioner myself, I await such bold statements from our Ambassadors in the US or China, even violating diplomatic protocols, when a situation arises with these two governments! Am I waiting for Godot!
Further, the Chinese statement said: “Both China and Sri Lanka as independent countries have full right to develop relations with foreign countries according to our own need and will.” This reminds me of a past Chinese intervention in Bhutan. It is an example where the Chinese while seeking to mend relations with Bhutan, to make India lose ground, dropped Chinese tourist arrivals after the Doklam standoff, because Bhutan did not stand with China. It was a warning to Bhutan about the country’s vulnerability. At that point, the “full right to develop relations” with India was tabooed by China for Bhutan!
Bhutan’s obligations to act according to the Treaty of Friendship between India and Bhutan (8-8-1949) calling for peace between them and non-interference in each other’s internal affairs and the additional agreement by Bhutan to let India “guide” its foreign policy and consultative action on foreign and defense affairs were not considered by the Chinese, as the legal “need and will” of Bhutan.
Similarly, India’s wrath was unleashed (2012) when the then Bhutanese PM Jigme Thinley met the Chinese PM, Wen Jiabao, on the sidelines of the Rio+20 Summit. India retaliated by withdrawing fuel subsidies to Bhutan. New Delhi’s heavy-handed response was deeply resented by Bhutan.
We complain of powerful countries using the proverbial stick, but these examples show that anyone could be the perpetrator to satisfy his needs. Let us be realistic without resorting to rhetoric, which emanate from boisterous politicians mostly- even ministers.
The Chinese strongly suggested “the US quit the addiction of preaching others and applying double standards” and named four areas of misdeeds, i. e. slandering, pretending as the guardian of free trade while violating the WTO rulings, holding high the banner of transparency, and smearing others’ normal cooperation against sovereignty, while militarily misbehaving and imposing unilateral sanctions. Brunei, Vietnam, Malaysia, Philippines or Taiwanese in China Sea or Indians in Ladakh may blame the Chinese for not adhering to some of these principled behaviours and preaching to the US. Can Sri Lanka challenge President Xi on the same lines?
Conclusion
I quoted the aforesaid references to point out the difficulties faced by Sri Lanka in the big diplomatic picture. They are thrust on us. Sri Lanka must take informed positions due to practicalities.
With the Indians, the proximity, centuries old relationships, strategic location in the Indian Ocean region, which became a focused area due to Indo-Pacific Regional bias, India and Japan, etc., must be valued. The busines alliances between India and Japan on ECT and Liquified Natural Gas projects send another message. The potential/ possible Indian influence on other countries, some parliamentarians, demographic and political groups must be considered for internal political stability purposes.
The Chinese factor must be considered in the light of past transactions and potential investments that could be received faster than from borrowing agencies or formal lenders. Sri Lanka’s economic problems need immediate solutions. How far could the government wait for external interventions satisfying all criteria?
The above quoted financial requirements and responses received from India may help understand the reality of financing, for which China responds faster than any other country. Any political intervention should address this problem and adapt to systemic assistance. Of course, the disadvantages of Chinese interventions, even highlighted by the World Bank study, about procurement procedures could push countries like Sri Lanka into difficulties. What alternatives could evolve is an issue.
Immediate response to the statement by Dean Thompson was experienced with Sri Lanka’s government bonds falling heavily last week. This is the danger that could be created by big brothers. The African proverb, ‘When elephants fight, it is the grass that suffers’, is always valid.
It is time for those who yelled last week that restrictions on stability/development could be remedied by constitutional amendments to keep quiet because it is not the absolute truth. The 20A had other objectives as is obvious. They should look afresh realistically and consider whether ignoring the international developments is possible. Let saner counsel prevail.
Simply stated, it is time to ditch camouflaged rhetoric heard in the House last week and look incisively, realistically, logically, and face the international challenges caused by the financial crisis, COVID 19, political conflicts, etc. Being a small nation, we need everyone’s support.
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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