Features
Growing challenge of food insecurity and malnutrition in Sri Lanka amidst macroeconomic crisis
By Prof. Amarasiri de Silva
Sri Lanka, renowned for its rich cultural heritage and diverse landscapes, is grappling with an unprecedented macroeconomic crisis. This crisis has given rise to acute shortages and sharp increases in the prices of essential products, creating a complex web of challenges. At the heart of this multifaceted crisis lies a severe impact on food security stemming from disruptions in agricultural production, a depleted treasury, unfavourable harvests, soaring prices, and the abrupt halting of various economic activities.
In a sobering revelation, the annual report of the Central Bank of Sri Lanka has sounded the alarm on the escalating challenges of rising malnutrition among children. This disturbing trend has emerged as a policy concern in Sri Lanka, unfolding against heightened household food insecurity. The report highlights the intricate interplay of economic and social issues that have reached a critical juncture, further exacerbated by the profound financial crisis that unfolded in 2022. As the nation grapples with this dual crisis, the implications for the well-being of its youngest citizens underscore the urgent need for comprehensive interventions to address the pressing issues of malnutrition and food insecurity.
The macroeconomic crisis in Sri Lanka has ushered in a period of significant turmoil, affecting various aspects of daily life. Agriculture, a vital sector for the country’s economy and sustenance, has been particularly hard-hit. Disruptions to agricultural production have resulted in diminished yields, contributing to the scarcity of essential food items. The depleted treasury has strained the government’s capacity to address the crisis effectively, amplifying the challenges faced by the population.
Unfavourable harvests, characterized by erratic weather patterns and environmental stressors, have compounded farmers’ issues. This has led to a situation where the supply of staple foods is insufficient to meet the demands of the population. Consequently, the prices of essential products have skyrocketed, placing an additional burden on the already strained households.
The confluence of these factors has unleashed a substantial impact on food security in Sri Lanka. Families, nationwide, are grappling with uncertainty regarding the availability and affordability of essential food items. The inability to access an adequate and nutritious diet has profound implications for the well-being of individuals, especially vulnerable groups such as children and older adults.
The report underscores the prevalence of child malnutrition in the estate sector, with the Uva province registering the highest number of food-insecure households in January 2016, followed by Sabaragamuwa. According to the DHS-2016, 31.7 percent of children in the estate sector experience stunted growth, significantly higher than the 14.7 percent in urban areas and 17.0 percent in rural sectors. Additionally, 29.7 percent of children, under five years old in the estate sector, were reported to be underweight. The DHS-2016’s depiction of Child Malnutrition Status (below five years old) from 1975 to 2016 highlights the persistent challenges in addressing this issue, with Nuwara Eliya emerging as the district with the highest prevalence of underweight and stunted children under five years.
In Sri Lanka, the tradition of milk consumption has entrenched itself in households across generations, particularly in urban areas. This practice, fostered by nutritional education disseminated through various channels such as media, school curricula, hospitals, and clinics, has steadily increased in popularity. The era before modern media saw newspapers and tabloids discussing nutrition-related topics, emphasizing the significance of cow’s milk as a crucial supplement, especially for mothers, babies, and pregnant and lactating women.
As a testament to this trend, milk consumption has seen a significant increase, which is evident in consumer statistics. Sri Lanka, ranking fourth, globally, in importing powdered milk from New Zealand, collected 283.11 million litres in 2017 through its 13 central milk processors. Despite this, the formal milk market’s share in the estimated production was around 65 percent. Notably, the National Livestock Development Board (NLDB) and MILCO (Pvt) Ltd contributed 11 million litres and 62 million litres to the production.
MILCO with its four milk factories, has extended its services to cater to numerous urban areas, broadening its reach and accessibility to a wider population. The National Livestock Development Board (NLDB) oversees the management of 31 integrated farms that harmoniously maintain livestock and coconut plantations. These farms are vital to the NLDB’s commitment to sustainable agriculture and dairy production. In addition to these integrated farms, the Board operates a dedicated training centre designed to impart practical and theoretical knowledge to farmers, contributing to skill enhancement within the agricultural community.
Recognizing the significance of expanding the impact of these initiatives, it is crucial to establish new farms in the eastern districts, particularly in areas like Ampara. The establishment of farms in these regions can influence local cattle breeders positively, enhancing the quality of cattle-rearing practices. This strategic move aligns with the NLDB’s mission to promote sustainable agriculture, foster knowledge exchange, and contribute to improving livestock management in Sri Lanka.
Examining the economic aspects, the average farm-gate price per litre of milk was Rs. 66.34 in 2017, with an average cost of production recorded at Rs. 34.69. Farmers received a guaranteed price of Rs. 70 per litre from 2017 onwards. Domestic milk production covered 42 percent of the total requirement, with the remaining deficit met through imports, primarily powdered milk, incurring an average cost of Rs. 33.6 billion. In 2016, Sri Lanka imported 94,000 MT of powdered milk, reflecting a per capita consumption of 110.33 ml of fresh milk and 341.36 g of powdered milk per month.
The Hector Kobbekaduwa Agrarian Research and Training Institute (HARTI) was surveyed in 2016, focusing on consumer preferences for milk and milk powder in the Colombo, Kandy, and Matara districts. These areas represented the highest household expenditure on milk and dairy products, with a sample size of 400 households.
Despite the apparent popularity of milk consumption, challenges persist. Child malnutrition, particularly among estate Tamils, indicates insufficient milk intake. While statistics show a range of milk consumption, the import data has sparked controversy. Some argue that the statistics are faulty, with claims that Sri Lanka’s milk production can cover 70 percent of the country’s requirement, questioning the purpose behind milk powder imports.
Furthermore, the NLB’s milk production statistics for 2018 reveal the production of 14 million litres from 11,000 neat cattle. Assuming every person in the country consumes half a litre of milk daily, the NLB’s production would only cater to 0.36 percent of the total population. Calls for increased government efforts to boost NLB’s production not only aim to enhance revenue but also to reduce foreign exchange spent on importing powdered milk.
For more detailed statistics, you can refer to the NLD Title: “Navigating Crisis: A Holistic Approach to Food Security and Dairy Sustainability in Sri Lanka’.
A significant crisis in Sri Lanka’s dairy industry is revealed by the Parliamentary Committee on Public Accounts (COPA), indicating the closure of around 14,000 small-scale farms and a sharp decline in milk production. The COPA suggests that the destruction of grasslands and land-related issues may have played a more significant role in this crisis. The cattle-rearing populations in districts like Ampara demonstrate the conversion of grasslands to other government-funded activities, a concerning trend. Instead, the government should encourage cattle-rearing farmers in districts like Ampara to increase their livestock and seek support for acquiring quality cows from abroad (e.g., India, Bangladesh), considering the unsuitability of European cows for the Sri Lankan climate.
The lack of reliable data on this sector is a persistent issue, highlighted by the death of 104 Australian goats imported for breeding, raising concerns about the suitability of European species to Sri Lanka. COPA emphasizes the importance of the Department of Animal Production and Health maintaining accurate and precise data on the industry. Such data is crucial for understanding the root causes of the crisis and formulating effective policy responses.
The Minister stresses the importance of implementing the Artificial Insemination Programme and formulating a National Policy on milk production to address industry challenges. Frustratingly, there is criticism of the government’s lack of a proper plan for the country’s dairy industry.
In the estate sector, difficulties arise from the prohibition of cattle rearing, with estate managers discouraging wage workers from raising cows. This discouragement occurs despite the potential for extra income and a valuable source of protein for their children. This dynamic complicates the factors contributing to child malnutrition in the region.
Sri Lanka has witnessed a notable surge in milk consumption, becoming a common practice among individuals of all ages. This trend sets the stage for exploring the nation’s journey toward dairy sustainability amid the growing challenges of food insecurity.
One pivotal initiative in this pursuit was the implementation of the Sri Lanka Dairy Development Project Phase I in 2012/2013. This strategic move resulted in the importation of 2,000 European-type high-yielding cattle, strategically placed in three upcountry farms: Bopaththalawa, Dayagama, and Manikpalama – all of which are currently managed successfully, as detailed on the NLDB website. Building on this success, an additional 2,500 dairy cattle were imported from Australia in 2015, finding a home at the Ridiyagama farm in the southern province.
However, this ambitious project faced challenges, as revealed by a report by Yoshita Perera in July 2020. The proprietor of Lammermoor Estate in Maskeliya, Amal Suriyage, expressed concerns about the imported cattle, citing poor conditions and the spread of Bovine Viral Diarrhoea (BVD). This setback underscored the complexities in ensuring the health and success of such large-scale initiatives.
The Ridiyagama farm, initially established in 1938 by the Department of Agriculture, underwent a series of transitions in management. Despite an efficient start under the Department of Agriculture, a decline in productivity occurred after its transfer to the Department of Animal Production & Health in 1977. Neglect further hampered operations, leading to a significant drop in curd production by 1992. Recognizing the farm’s potential, the NLDB took over in 1992.
In 2015, the Ridiyagama farm underwent a transformative process to become a modern dairy facility. The importation of 2,500 European-type dairy cattle, including breeds like Jersey x Frisian and pure jersey, aligned with the government’s policy to achieve self-sufficiency in milk production. This endeavour involved comprehensive infrastructure upgrades, implementing an intensive dairy management system, and developing 662 hectares of pasture and fodder lands to meet the needs of the imported animals and their offspring.
Following the importation of 2,500 cattle, the Ridiyagama farm emerged as the largest dairy farm in Sri Lanka, with an anticipated annual milk production of approximately 10.0 million litres starting in 2016. The project also aimed to contribute around 600-700 heifer calves to the public annually. After completing phases I & II of the Sri Lanka Dairy Development Project, NLDB’s total annual milk production surged to 14.0 million litres by the end of 2018, marking a significant increase from 3.0 million litres.
As of 2018, NLDB’s overall contribution to national milk production stands at approximately 4%, highlighting the success of their endeavours. The NLDB manages 31 integrated farms, where livestock and coconut plantations are harmoniously maintained, emphasizing their commitment to sustainable agriculture and dairy production.
This ongoing development showcases Sri Lanka’s dedication to overcoming food insecurity challenges by investing in robust dairy development projects, paving the way for a more self-reliant and resilient dairy industry despite the hurdles faced along the way.
Compounding the challenges faced by Sri Lanka is the global food crisis. The interconnected nature of the global economy means that disruptions elsewhere have a cascading effect, exacerbating the situation in Sri Lanka. The wave of upheaval in international markets has further constrained the availability of certain food products and heightened their prices.
As Sri Lanka navigates through this macroeconomic crisis, the issue of food insecurity and malnutrition looms large. Urgent and coordinated efforts are needed to address the root causes of the crisis, revitalize the agricultural sector, and ensure that essential food items are accessible to all. The collaboration of government, civil society, and international partners will play a crucial role in mitigating the impact on food security and paving the way for a more resilient and sustainable future.
The re-introduction of cattle rearing in the estate sector is proposed as a long-term measure to address the malnutrition issue among estate children. This comprehensive plan involves both short-term and long-term strategies.
Long-term Measures:Allocation of Land for Cattle Rearing: Families in the estates should be allocated land for cattle rearing. This step aims to provide a sustainable source of nutrition for the community.
Training in Modern Methods:Workers involved in cattle rearing should receive training in modern and efficient methods. This ensures that cattle re-introducing is a means of sustenance and a productive and sustainable venture.
Importation of Asian Cattle Brands: Instead of importing European cows, it is suggested to import good-quality Asian cattle from countries like India and Bangladesh. This aligns with the local conditions and promotes the use of breeds that are well-suited for the environment.
Provision of Grasslands:Cattle rearing districts should have ample grasslands for grazing. This ensures that the cattle have access to natural and nutritious food sources.
Establishment of Milk Board-like Institution: The proposal includes the establishment of an institution similar to the old Milk Board. This institution can oversee the management and regulation of fresh milk production. MILCO (Pvt) Ltd should expand its kiosks to more urban centres and also in the estate sector communities.
Short-term Measures:Nutrition Packages for Children and Pregnant Women: As a short-term measure, all children under five and pregnant women should be provided with food and nutrition packages. This addresses the immediate nutritional needs of vulnerable groups.
Nutrition Packages for Workers: Estate management in the respective districts should provide workers with a comprehensive package of nutritious foods. This ensures that the workforce remains healthy and productive.
Installation of Fresh Milk Booths:Fresh milk booths should be installed in urban areas to popularize fresh milk consumption. This initiative promotes a healthy diet and creates market demand for dairy products.
In conclusion, the proposed plan combines short-term relief measures with a sustainable long-term strategy to tackle community malnutrition. It emphasizes the importance of cattle rearing, proper training, and establishing support institutions for effective implementation.
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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