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Black July 1983 – and some inside stories from wartime politics in Colombo and Delhi

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(Excerpted from volume ii of the Sarath Amunugama autobiography)

I had undertaken a mission to South Korea on behalf of the DG of UNESCO to participate in a conference organized by the Korean Broadcasting Service [KBS] in Seoul. The South Koreans who were developing communications technology were keen to join the International Programme for Development Communication (IPDC). Due to political bickering they had been kept out of office in the UN system.

This conference was a well-planned attempt at breaking the log jam and taking their rightful place in the global community. The apotheosis of that attempt was the election of Ban Ki Moon as Secretary General of the UN several years later. After this meeting, as customary, I broke journey in Colombo on my way back to Paris. But it was not to be the pleasant holiday that I had planned for.

Following the killing of an army patrol in the North by the LTTE which had been trained by RAW, riots broke out in Colombo and spread throughout the country for over a week and I was forced to remain to witness those horrific days. I had driven to Bentota on that day and on my way back was an eyewitness to the fact that the violence was the result of a government inspired program.

Many of the looters, at least on the first day, were workers of state institutions like the Electricity Board and the Port Corporation. They were going about in Government vehicles. The first wave of rioting and looting was organized by Minister Cyril Mathew who had deployed the goons of the Corporations under him, with the seeming concurrence of the President.

This attempt to threaten the Colombo Tamils, who were no doubt surreptitiously supporting the ‘boys’, went terribly wrong and the country entered a 30 year-long armed conflict. It spelt the doom of the growth-oriented policies of the JRJ administration which was sucked into a wasteful war of attrition and a path of confrontation with our closest neighbor, India.

It helped the Tamil armed groups to gain more recruits, funding and foreign support. The first attempt to break the shackles of outdated ideologies and enter the path of economic growth – a pattern soon to be adopted worldwide – thereby got sidetracked and the country’s resources were needlessly squandered. It spelt the end of JRJ’s dreams and we began to slide towards greater violence and repression.

This unexpected self-inflicted turn of events caught the world by surprise. The western world which was supporting the new regime for its dismantling of the ineffectual socialist policies of the Bandaranaikes was taken aback when the July events led to a mass exodus of Tamils to their countries and India. These expatriates were well received at that time by the west that now has had second thoughts after mass migrations of refugees from Africa, the Middle East and Latin American countries.

The first wave of Tamil refugees was welcomed in Europe which was entering a phase of manpower shortage. Their displacement helped the migrants to benefit from the liberal policies of Europe at that time which greeted ‘Guest Arbiters’ with open arms. In Berlin for example they were found housing and jobs as the old residents were moving out to West Germany and the city was facing a shortage of manpower.

I remember visiting Berlin for a short visit and being offered an immediate working visa. The Turks and Tamils became welcome communities that helped the west in thwarting the Communist attempt to depopulate Berlin with threats to their security. Berliners who had borne the brunt of the damage at the end of Second World War were leaving the beleaguered city in droves fearing a Soviet invasion.

Indian Intervention

The killing of Sinhala troops in the North which led to the riots of 1983 was by the exploding of a land mine. The rag tag rebels of the North had been provided landmines and modern weapons training by India notwithstanding their formal denials. At first this was done surreptitiously while our intelligence services and Foreign Service remained deaf and dumb.

But while these services dithered, Indian media blew up the story and the two countries were drawn into a protracted conflict. The exposure of LTTE training camps located in Dehra Dun by ‘India Today’ magazine in a special issue set off shock waves in both Colombo and New Delhi. In the events that followed the political and psychological needs of Indira Gandhi played a pivotal role.

By this time she had achieved the popularity she craved for by marching into East Bengal and bifurcating Pakistan. Bangladesh became an independent country in 1972. The influx of refugees into Bengal from East Pakistan due to the repressive policies of Bhutto and his Punjabi Generals had created many difficulties for the Indian economy, already in the doldrums because of Indira’s quasi-socialist policies.

The world watched with horror as Bengali Muslims were slaughtered by their Punjabi countrymen. East Pakistanis had to flee ‘en masse’ over the border into Indian territory. Now another mass of refugees from Sri Lanka were pouring into Tamil Nadu raising the spectre of disrupting the already fragile economy of the south.

Coincidentally Indira and the Congress was keen to establish their presence in the South of India, particularly in Tamil Nadu to balance their fading fortune in the North. Her father Jawaharlal Nehru had been forced to accept the concept of linguistic states in the Indian Union after the South had started rioting against the imposition of Hindi as the national language.

Even the famous Tamil Nadu films industry had started to boycott Hindi films. It was this agitation that drew bigwigs of the Tamil film industry into politics, which has remained a characteristic of TN politics till today. On being rejected in the North, including the family electorate of Raibareli in Uttar Pradesh, Indira turned to the South and entered Parliament from Chikmagalur electorate in Bangalore district.

The influx of refugees from the North and East of Sri Lanka to the southern Indian states was adding to the pressure on Indira to adopt a hawkish stance and use the popular ‘Bangladesh option’. Indira had another reason for disliking the JRJ administration. She was clearly on Sirimavo’s side and unlike her father Nehru who maintained a strict neutrality, agreed to an expanded Indian role in the Sri Lankan conflict, against JRJ whom she perceived as Morarji Desai’s ‘alter ego’.

She hated Desai and the aging ex-PM hated her in return. JRJ was caught in the middle. He tried to placate Indira by using the good offices of a Congress oriented businessman to bring about a reconciliation but to no avail. Indira’s advisors who were mainly leftists criticized JRJ for his links with the US, Pakistan and Israel. Following the July riots, she sent her Foreign Minister Rao to Colombo thereby creating a precedent for later interventions.

JRJ and the UNP establishment then began to realize the gravity of the situation, but the scenario had changed perhaps irrevocably. I flew back to Paris to find the media and academia greatly agitated and turning their attention to the Tamil issue in Sri Lanka which did not earlier hold centre stage. It had become world news.

I remember journalists crowding into the Paris airport to meet returning passengers from Sri Lanka offering good money for photos and video clips of Colombo burning. It showed that this was an event that they had not anticipated, and were now searching for quick answers. From now on Sri Lanka and her ethnic conflict drew worldwide attention much to the detriment of Sri Lanka and JRJ personally.

Back in Paris

I returned to my home in Paris in late July 1983 to find friends and colleagues anxious to know about my experiences during those fatal days. DG M’bow was good enough to consider my sojourn in Colombo as leave with pay thinking that my life was in danger, thanks to the media hype that marked that ‘silly season’ meaning that it was a period when western media was hunting for news when their own news makers were on summer vacation.

The French media was ignorant of the meaning of the events in Colombo and turned to ‘Sri Lanka specialists’ in French academia for information. Our high commissioner in London and ambassador in Paris were ill informed and tongue tied adding to the confusion. Their performance before TV cameras, for which they had no training, was pathetic.

I was met by my friend and academic Eric Meyer who had been asked by ‘Le Monde’ to contribute an explanatory essay. I briefed him and Eric’s article appeared in ‘Le Monde Diplomatique’ in which he acknowledged my role in interpreting the July events. This essay is still a standard reference on the issue and has been reproduced several times, including in a collection of essays on this subject compiled by James Manor. I interacted with many French intellectuals and journalists who were now looking on Sri Lanka as a new ‘story’ which was replacing the old chestnuts of Africa and the Middle East which had been their main focus of interest till now.

While I got back to my duties in IPDC I had to interact with the Indian delegation on a regular basis on official matters after our New Delhi meeting. This meant interaction with Parathasarathy who was the head of the Indian delegation. Indira Gandhi had appointed him as the head of her foreign policy advisory team. From him I could elicit the official Indian view of the recent events in Sri Lanka at a very high level.

Indira relied on GP because he was a Tamil from Chennai [then Madras] and she wanted the South to be comfortable with her decisions on Sri Lanka. Parathasarathy became the virtual spokesman of the TULF whose leaders had fled to Delhi thanks to the July riots. The Indian central government had earlier concerned itself mainly with the fate of the ‘Indian Tamils’. It was now dragged in to creating a trilateral relationship which added the concerns of Tamil Nadu to those of Colombo and New Delhi.

The Indian Foreign Office which handled this issue earlier, with assistance from RAW, was compelled to factor in the concerns of South India in a big way. The Nehruvian assurances regarding noninterference in the internal affairs of neighboring countries was abandoned in the face of ‘real politik’, necessitated by the political and electoral changes in India. Indira Gandhi symbolized that transformation of Indian policy and she introduced a lack of warmth in our mutual relations unlike in the time of Jawaharlal Nehru. Indira’s legacy became embedded in the relationship between our two countries from then on and became a crucial part of the foreign relations problems of Sri Lanka. A warm relationship had suddenly turned very cold.

Tamil Nadu

The first need of an armed insurgency is a proximate ‘safe haven’. Without such a ‘strategic rear’, as the JVP discovered to their cost, an armed uprising will not succeed except in very special circumstances. North Korea had Red China as its sanctuary. Vietnam had Cambodia and Laos as safe havens before the US began bombing Cambodia to interdict the movements of liberation fighters and war material from the war zone.

The LTTE could fight for such a long time because the coastal villagers in Tamil Nadu became their sanctuary and a ‘No Go’ zone for our armed forces. They also could elicit much sympathy from Tamil

politicians in South India. A turning point in the defeat of the LTTE was their assassination of Rajiv Gandhi and the subsequent rapprochement of India with the Sri Lankan Government and the military.

The attacks on the IPKF by LTTE fighters removed that vital Tamil Nadu ‘sanctuary’ in the latter’s military strategy. With no safe havens and the sharing of vital intelligence between the Indian and Sri Lankan armed forces the LTTEs days were numbered. But that was to happen many years later. At this point of time the cards were stacked against Sri Lanka.

The Tamil Nadu government became a vital support group for the insurgents. Tamil Nadu politicians pressurized the central government in New Delhi largely because of the influx of refugees to their territory which was making it both a national and international issue. There was a wide disparity in the estimate of Tamil refugees in India. While Sri Lankan estimates put it at 35,000, Indian authorities proclaimed it to be 125,000.

As in the case of Bangladesh, Indian “hawks” were exaggerating the numbers of refugees to promote a more aggressive policy from Delhi towards Sri Lanka. What was a bilateral issue became a trilateral relationship. Many of Indira Gandhi’s advisors including G. Parthasarathy, Chidambaram, Venketeswaram and another senior official also named Parathsarathy became strong defenders of Tamil rights and were pushing the Indian Government to intervene forcefully on the Sri Lankan Tamil issue.

They were all lining up behind the TULF-inspired ‘Parathasarathy proposals’ that came to be referred to as ‘Annexure C’, which envisaged the setting up of a second tier of administration called Provincial Councils and the merger of the North and East. It was my experience that the somewhat ordinary Tamil Foreign Service officials tended to model themselves on Krishna Menon, the arrogant Indian Minister who was an advisor to Nehru on Foreign Affairs and a “hawk”.

Menon finally ruined his patron Nehru by tendering wrong advice on the question of “India’s China War’. The Tamil FS officers imitated Menon in dress and bad manners. It became necessary to reach beyond them to political and business interests to break the stranglehold of the ‘Tamil Brahmins’ of the FO. I conveyed the need for such an approach to JRJ and assured him, as I was to prove later, that the big Indian businessmen who had invested in Sri Lanka like the Tatas, Oberois, Hindujas and Jains were much more sympathetic to us than the South Block’s `Tamil lobby’.

All of these businessmen knew JRJ personally and were full of admiration for him and his free market policies. But they had not been brought into play by our Foreign Ministry which was obsessed with protocol, a sure sign of their incompetence. A senior FS man who was our representative, was constantly complaining that he was not being taken seriously by the Indian establishment. To make matters worse he established a direct link with Premadasa and began to indoctrinate him with a rabid anti–Indianism, little realizing that he was creating a split in the Cabinet on this issue and subverting JRJ’s initiatives. In a way JRJ brought it on himself because he treated FO officers with scant respect which sent them scurrying to Premadasa who received them with open arms. It also helped that this officer was married to a lady from the Colombo ‘Mudalali elite’ which was admired by Premadasa.

Back Channels

During Esmond’s visits to Paris he told us of a back channel he had set up to brief Indira Gandhi of our case. As referred to in passing earlier in these pages, this unlikely conduit was an American Professor of Sri Lankan origin called Ralph Buultjens. He was a teacher of political science at a New York University, who had managed to earn Indira’s confidence during their meetings in New York and New Delhi.

He was a suave operator who played on the vanity of important middle-aged ladies including many in Colombo Seven. He befriended Esmond who too was a no mean admirer of middle-aged ladies, particularly if they were white in color. This odd couple persuaded JRJ that his messages to the Indian PM were having its effect. I remember JRJ mentioning his friendship with Yunus, one of Jawarharlal’s confidantes and now an old man, who was invited to visit Colombo by him in order to influence Indira.

In spite of Buultjens’ assurances, the Northern situation was becoming worse and plans to develop the country’s economy were being sidelined much to the chagrin of Finance Minister Ronnie de Mel who advocated a conciliatory approach. While Buultjens could make no impact on our ethnic conflict he certainly created havoc in our Foreign Ministry and with the President. With the hope of being our Permanent Representative in the UN he began to bad mouth the incumbent UN Ambassador B.J. Fernando, who was a confidante of Premadasa and a long standing UNP supporter.

Letters purporting to be copies of correspondence between BJ and Premadasa denigrating JRJ were distributed among the political elite of Colombo. The Government which was already facing many difficulties was further embarrassed when BJ was summarily dismissed from his post as our representative in the UN. It was a sordid affair and Premadasa who was the ultimate target moved adroitly and overcame the crisis in which he could have suffered collateral damage.

The celebrated Buultjens ‘back channel’ brought nothing but trouble for JRJ and the country. I will later recount the `Buultjens affaire’ which shook up the UNP and created a lasting enmity between Premadasa and Gamini Dissanayake, which ended only with the tragic death of the new President. But with the accession of Rajiv Gandhi, efforts were made by Gamini and Lalith to reach out to influential friends of the Indian PM from among the `technocrats’ who were his closest friends, many of them Harvard graduates.

These overtures were more successful, and Rajiv began to hew his own line much to the consternation of the old guard and the Foreign Service officials. Rajiv replaced Parathasarathy and Venketeshwaran and brought in Foreign Secretary Romesh Bandari who struck up a cordial relationship with JRJ and was able to move the negotiations forward. Once when the negotiations were held up, I flew to New Delhi at JRJs request to meet Biki’ Oberoi with a message from him.

Oberoi was my friend from the time I was Permanent Secretary in charge of Tourism and an ex-officio member of the Board of the Hotel Colombo Oberoi. Biki and his brother-in-law, Gautam Khanna were great friends of Sri Lanka and were ready and willing to deploy their considerable clout among the business and political elite of Delhi to support our cause. Biki drove me from the Delhi airport to his magnificent farm on the outskirts of the city and invited Romesh Bandhari for lunch. We had lunch together and he suggested that JRJ should reconvene the All-party Conference and India would ensure the participation of the TULF.

JRJ agreed and the conference was reconvened. At that time the great fear of the Delhi ‘Tamil lobby’ was that we would reach out to Rajiv and exclude them. Chidambaram gave expression to this fear when he complained, referring to JRJ, “One of the difficulties was that he always tried to undermine whoever he was negotiating with by using his back channel connections to New Delhi. I was afraid that the PM [Rajiv] would be taken in by this beguiling man, and that is exactly what happened” [quoted in “J.R. Jayewardene of Sri Lanka-Biography Volume Two’; p624].

The worsening ethnic conflict was felt even by us expatriates at that time. The flights to Colombo from Charles De Gaulle and Heathrow in London had to be security checked several times before we boarded the plane. On many occasions our flight to Colombo had to be diverted to airports on the way and rechecked as there were messages, usually fake, of bombs on board. These leads had to be taken seriously as on one occasion the Air Lanka trident was blown up while on the ground at Katunayake.

The plan was to blow up the plane in the air while carrying 140 passengers. Tourism took a nosedive. Many tourism projects which we negotiated in Paris with Club Meditaranee and the Meridian group were put on hold. Fortunately UTA continued with their flights to the South Pacific via Colombo and with our friend Daniel Leferve as manager we could always get a seat at short notice.

As the LTTE grew in strength the powers of the central government in the North began to wane. The army which had not increased its strength and obtained the latest equipment was being confronted successfully by the terrorists. Even the Army top brass comprised of those drawn from privileged families in Colombo were not ready for combat duties. The President was getting increasingly frustrated as the situation both domestic and external seemed to be spinning out of control.



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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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