Features
Healthcare in a bankrupt Sri Lanka
By Dr Ajith Amarasinghe
On the eve of the Sinhala and Tamil New Year day, of the 12th of April 2022, Sri Lanka pronounced that it is a bankrupt country by declaring that it cannot pay its debts. It is predicted that the shrinking economy of Sri Lanka will not bounce back to the level of 2018 for at least three to five years. The impact this state of bankruptcy would have on the health-care of the people of Sri Lanka has not been discussed in depth. The ramifications of the effect of economic bankruptcy has on the health of Sri Lankans are multifaceted. To many, it would result in a shortage of medicine and healthcare equipment. Emergency measures are taken to obtain these, as donations from other countries or philanthropists. Although the loss of a human life, due to lack of medications or services caused by an economic meltdown, generates emotional and sensational stories, healthcare providers should look beyond these and take remedial steps to prevent a bigger healthcare catastrophe.
Sri Lanka spends about 3.4% of its GDP on healthcare, which amounted to Rs 423 billion in the year 2018. With a very low level of per capita healthcare spending of 161 USD, Sri Lanka has achieved very high levels of healthcare indices. In comparison, per capita healthcare spending in the USA is approximately USD 10,900, and in the UK USD 4,300. A country which has comparable healthcare indices, such as Cuba, spends six times that of Sri Lanka, being USD 1,321. In fact, Sri Lanka has become a success story in the eyes of international agencies, as a model where high healthcare indices and qualitatively higher levels of care have been achieved at a very low cost. Under these circumstances, further curtailment of per capita healthcare expenditure is near impossible. Although the Prime Minister emphasized, in public, that reducing healthcare expenditure would not be done at any cost, a shrinking economy would make this a necessity through compulsion. This article is an attempt to initiate a serious, in depth discussion about the impact the economic bankruptcy will have on the healthcare system in Sri Lanka, ways to minimize morbidity and mortality patterns in the country, and to protect the nation’s overall health.
Private spending on healthcare
Although Sri Lanka boasts of having a “free” healthcare system, nearly half of its healthcare spending is through private sources. Private financing is done through out-of-pocket spending by patients, private insurance, insurance paid by enterprises, and contributions from non-profit organisations. Of all the private health spending, out-of-pocket expenditure by patients for medical care was 81% in the year 2018. In contrast, in many developed countries where a genuine free health system exists, direct government spending and widespread public health insurance schemes account for more than 90% of healthcare spending.
Although government spending on hospital (inpatient care) expenditure is 74% and private spending is 24%, in non-hospital expenditure (outpatient care), private spending by patients is 77%. Overall, about 84% of the expenditure to supply medicines and other medical goods to outpatients was privately financed, mostly by household out-of-pocket spending. This indicates that when the economic meltdown affects individual income badly and the per capita income of Sri Lanka falls, outpatient care will be seriously affected. The exorbitant increase in prices of drugs, due to the devaluation of the rupee, would make it even more difficult to purchase essential medications. In recent months, certain drug prices have risen by 60%, forcing patients to reduce the quantity of medications they take or abandon taking medications at the expense of other essential commodities, such as food, fuel, electricity, cooking gas, etc. This reduction in the buying power of medicines would mainly impact patients with non-communicable chronic diseases, such as diabetes, ischemic heart disease, hypertension, renal diseases etc., in which lifelong treatment is essential.
To safeguard this economically marginalized segment of society and the “new poor” created by economic collapse, they will have to be helped by redirecting them to the government sector where drugs are provided free of charge. When this happens, the government’s expenditure on health care would naturally increase. The other option is to introduce a national health insurance scheme with government intervention, to cater to this segment, which is currently not serviced through government funding. Sri Lanka still has underdeveloped medical insurance schemes. Although company medical benefits, which provided 2% in 1999, increased to 9% in 2018, it is still a minute proportion of the total health care spending.
Public spending
In analyzing the sources of financing for health care expenditure, it could be observed that during the period of 1999 to 2018, the relative share of public financing in health care has increased from 40% to 58% and private financing has reduced from 60% to 42%. The central government’s share of public sector financing was 60%; provincial governments 32%; and local governments 2%. The Suraksha student insurance scheme and ETF contributed a minute 0.3% in the year 2018.Government expenditure on health care is mainly financed from revenue generated through public taxation. The reduction of government taxation in the year 2019 had a strong impact on government revenue. In addition, the government obtains its income through foreign aid and loans. Due to the default of loans obtained, further harnessing of loans has become a near impossibility. All these would contribute to a drastic reduction in government income and, in turn, the ability of the government to spend on health care would be reduced. The practical solution would be to increase government taxation or even introduce a “social benefit tax” and use the revenue generated to maintain current levels of government financing of health, education and social services.
The contribution of donations through foreign sources to health care spending was less than 1% throughout the years. With the downfall of the economy, foreign donor agencies such as WHO, UNICEF, World Food Program, and international non-governmental organizations may come to our assistance, increasing the contribution of direct foreign donations to health care. Establishing a separate unit in the Ministry of Health to identify and harness the organizations that are willing to help Sri Lanka by harnessing their contributions and directing such donations to essential sections of health care is important. However, even with these measures, it would still be essential to cut down on government expenditure on health care. In the event of such a scenario, the healthcare managers should have a clear idea as to which expenditure should be curtailed.
Health care expenditure
Current expenditure on health goods and services in Sri Lanka in 2018 was estimated at Rs. 423 billion. Overall, current health expenditure (CHE) nearly quadrupled in real terms between 1999 and 2018. Per capita Health expenditure of Sri Lanka increased from 44 US dollars in 2000 to 101 USD in 2010 to 161 US dollars in 2019 growing at an average annual rate of 7.44%.The ratio of CHE to GDP fluctuated between 2.6% and 3.7% during 1990–2019. This indicates that health care expenditure increased more or less proportionately to the increase in GDP. With the shrinking of GDP due to the economic downfall, it would necessarily mean that expenditure on health care would naturally be reduced. Going back to the 2009 level of spending patterns after proper cost-benefit analysis may become essential.
The largest part of health spending is for curative inpatient care, which is mainly financed by public spending. Total spending on hospitals has quadrupled between 2009 and 2019 (estimated), and it has become more inclined towards large hospitals in this period. This is very likely to be due to spending on infrastructure development and purchasing expensive equipment for large hospitals. To reduce the cost of this segment, non-essential capital expenditure in inpatient care has to be curtailed. As the expenditure on health in an economically vulnerable period has to be done carefully, in the future, any government health care spending has to be done after careful cost-effective analysis by the Ministry of Health through a transparent scientific mechanism. A cost-effectiveness analysis is a method for assessing the gains in health relative to the costs of different health interventions. Even though it is not the only criterion to decide on the allocation of resources, relating the financial and healthcare implications of different interventions is important.
From 2009 to 2019, spending on healthcare institutions increased fourfold, with no significant improvement in communicable or non-communicable disease case fatality rates. During this period, mortality from cardiovascular disease, diabetes, and chronic renal disease decreased from 22.3 to 17.5 percent. Therefore, if there is a need to reduce the costs, the government may have to take a difficult decision to roll back to the past to reduce the health care costs based on spending patterns of 2009.This may include curtailment of expensive drugs, instruments, equipment, and constructions .
To reduce the cost of purchasing medications, essential drug lists have to be made by respective professional colleges of specialties, based on scientific analysis of mortality and morbidity patterns. The purchase of quality generic drugs has to be done and a special unit has to be established in the MOH to coordinate the donated drugs and equipment monitoring. Distribution and maximum utilization of drugs has to be done through the currently underutilized IT based centralized method, to maximize utilization and minimize wastage. Producing drugs and equipment in Sri Lanka has to be done after a careful cost benefit analysis of the wisdom of producing each item in Sri Lanka.
Preventive health services
Of the total health expenditure, only 5% is spent on preventive care services, though the government’s slice of expenditure on preventive health is 98%. Expenditure on preventive health includes universal vaccination programs, family health worker network maintenance, health education, health promotion, and related public health services. Arguably, the current excellent health care indices of Sri Lanka were achieved through its spending on public (preventive) health. Therefore, the meager spending of 5% on public health should not be reduced at any cost. In fact, it may be essential to increase it to match the inflation, without which the public health services may collapse. Foreign donor agencies such as UNICEF and GAVI (Global Alliance for Vaccines and Immunization) should be requested to provide us with vaccinations free of charge for the expanded program of vaccinations (EPI), as it happened before we became a middle income country. Of the inpatient services, cost reduction should not be done at all in maternal and child health services.
Reduction in morbidity and mortality in communicable diseases, which were the main causes of illnesses in the past in Sri Lanka, was achieved through preventive health campaigns. Similarly, through public education campaigns, reductions in 1st and 2nd leading causes of hospitalization, namely traumatic injuries (most of which are domestic and occupational accidents) and non-communicable diseases, could be achieved.
Production of medicine
Encouraging local production of drugs is one proposal made to provide medicines at a lower cost. Although manufacturing medications would reduce the foreign exchange drain, the cost of producing certain drugs locally may be higher than importation. Therefore, encouraging local manufacturing with the intention of reducing prices has to be done after careful analysis on an individual basis.
Impact on nutrition
Souring food prices due to hyperinflation and food shortages caused by the shortsighted implementation of organic fertilizer policy has made food items unaffordable to the poor. This would result in acute and chronic protein energy malnutrition, vitamin and micronutrient deficiencies, especially in children and pregnant women, affecting future generations of the country. Health education and health promotion programs have to be conducted to make the public aware of cheap, nutritious food and a balanced diet. Common food programs for the poor, provision of micronutrient and vitamin supplementation programs to the vulnerable population, and the reintroduction of school mid-day meal programs through the existing public health and education structure may become essential. Utilization of existing official networks would ensure such programs are not politicized and ensure only the needy get the essential food items.
Conclusion
Although paying attention to the urgent supply of medication is an important aspect of saving human lives, it is critical that healthcare managers look beyond the medication shortage and initiate a serious scientific discussion about maintaining health services in Sri Lanka during the economic crisis. If this is not done soon, the population of Sri Lanka would face a major health care crisis which could not be salvaged by a late intervention.
Dr Ajith Amarasinghe- MBBS, DCH, MD (Sri Lanka), MRCP, MRCPCH (U.K), P.G Dip in Asthma & Allergy (CMC-Vellore), MBA-Health Care (Manipal) could be reached through amarasinghe_ajith@yahoo.com
About the writers: Dr Ajith Amarasinghe is a Consultant Paediatrician and a Clinical Allergist who holds an MBA in healthcare from the University of Manipal. He has held administrative positions in the public and private sectors.
References
-Rannan-Eliya, Ravi P. Sri Lanka- “Good Practice” in Expanding Health Care Coverage – Institute for Health Policy Colombo- 2009
-Medical Statistics Unit- Annual health statistics 2019- Ministry of health Sri Lanka
-Ministry of health Sri Lanka-Annual health bulletin 2018- Ministry of health Sri Lanka
-Sarasi Nisansala Amarasinghe [et al.] – Sri Lanka health accounts: national health expenditure 1990- 2019 (IHP health expenditure series; No. 6) – Institute for Health Policy- Colombo- 2020
-World Health Organization, Global Health Observatory Data Repository- Mortality from CVD, cancer, diabetes or CRD between exact ages 30 and 70 male% -Sri Lanka- apps.who.int/ghodata.
-Department of Census and Statistics- Economic Statistics of Sri Lanka 2021- 5th bulletin- The Department of Census and Statistics 2021
-Department of Census and Statistics- The 2016 Sri Lanka Demographic and Health Survey-SLDHS- Department of Census and Statistics
-World Health Organization – Current health expenditure per capita (current US$) – Sri Lanka https://data.worldbank.org › SH.XPD.CHEX.PC.CD- 20th Jan 2022
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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