Features
Ministry of State facilitates getting tourism off the ground post-1977
Let us now return to’ my role in the newly created Ministry of State. The President and my new Minister Anandatissa de Alwis had a special interest in tourism. As Minister of State, JRJ had presented the Tourism Development Act to establish the Ceylon Tourist Board. He appointed his brother Harry as Chairman of the Tourist Board to signal its importance.
Anandatissa was his Permanent Secretary at that time. Mrs. Bandaranaike as PM had also promoted tourism during the 1965-1970 period and appointed Dharmasiri Senanayake as the Chairman of the Tourist Board. He was a dynamic leader and we inherited an outstanding staff who wanted to take tourism to a new level.
JRJ had appointed Chandra Soysa, an Accountant, as the Chairman. He had good connections with Germany which was a top target for getting tourists to Sri Lanka. The Managing Director was Thahir and his assistant was Nimalasiri de Silva who had left the diplomatic service to handle the Board’s public relations. We had three outstanding officials who had been recruited by Dharmasiri and had performed well to put Sri Lanka on the tourist map.
They were Samaradiwakara who supervised the European market while Lakshman Ratnapala, who had worked with me as a Press Officer, handled the American sector. Navaz was based in France and we accredited local agencies to represent us in Japan and India. What was significant was that tourism was driven by the private sector while the Board played a supporting role.
No five star hotels had come up in Colombo for almost a century. With the impending Non-Aligned Movement’s meeting in Colombo, the State Trading Corporation had financed the construction of a brand new five star hotel which was to be managed by the Oberoi Group of India. This was the Lanka Oberoi which was a state of the art hotel designed by a top American architectural Company.
The other was the ‘Colombo Inter Continental’ begun during the tenure of JRJ as Minister in 1965. The strategy of the Board was to develop Sri Lanka as a ‘sea, sand and sun’ destination that could compete on the mass tourism market. Unlike our competitors Bali and Thailand, as long haul destinations, we could offer wild life and culture as extra incentives.
Accordingly the Board had set up its first resort area in Bentota where land and all other facilities were offered on a ‘plug and play’ basis along the Bentota river and estuary, to both local and foreign investors. John Keells were the first to hire Geoffrey Bawa to redesign the old Bentota Rest House into the five star Bentota Beach Hotel it is today.
This started a trend which transformed Asian architecture and made Bawa a famous name among modern building circles. Aitken Spence followed with the Ahungalle hotel which has now been rebranded as Heritance Ahungalla. A Tea Company which owned Elephant House remodeled the old Hikkaduwa Rest House with a French architect but was not able to achieve the aesthetic excellence of a Bawa designed hotel.
Later it was sold to John Keells which was fast emerging as a leader in in-bound tourism. An amazing development then took place. Around our main destinations by the sea a large number of middle and small level hotels, restaurants, batik shops and grocery stores sprang up which opened up avenues of employment and income for local investors and workers.
Bawa’s preference for local Batiks, handicrafts, metal work and antiques for interior decoration led to the birth of flourishing small enterprises which later even supplied urban house builders. As I had served as an official in Galle and Kalutara districts I was able to iron out many practical problems that arose. For instance a major drag on investment was the pattern of land ownership in the south. Most of the private lands by the sea were so fragmented that nobody could get a clear title. Without a clear title local banks would not lend money for hotel construction.
For instance in the Balapitiya area there were more than two hundred ‘pangu’ holders for each small block of land. To make matters worse many of the share owners had migrated to Colombo. I particularly remember that the Ahungalle construction was halted due to this problem. After discussing with the Attorney General I arranged for the Tourist Board to acquire these lands and then transfer them with clean title to the investors.
The investor had to deposit the money in a state account to pay the claimants. This solution worked very well and banks were provided with clean titles which enabled them to speedily process loan applications. It also so happened that many of the officers who handled the tourist sector for the big companies were ex-planters who were displaced by the takeover of estates by Mrs. B’s government.
They were talented workaholics and I was able to move with them both officially and socially. Ken Balendra, `Roti’ Sivaratnam, G.C. Wickremasinghe, D. Perera, C.P. de Silva and George Ondaatje were the indefatigable pioneers of our modern tourist industry. We had links with the directors of TUI, Neckermann, Wintertour, Accor, Club Mediterranee and many other global travel agencies.
Accordingly hotels and shops sprang up along the southern coastline and tourism became one of our biggest money spinners in addition to beautifying many towns which were earlier in a shabby state. Bawa and his followers were trend setters in hotel architecture.
Hikkaduwa
While Bentota was a well-planned tourist resort, Hikkaduwa which was about 20 kilometers from there grew as a natural resort of a different model. From the earlier days Hikkaduwa with its coral reefs was a destination favoured by local travelers. Its Rest House was a favourite holiday destination of the Colombo elite led by R.G. Senanayake. With the expansion of tourism it developed as a low cost resort sought after by young western tourists.
This was a special time which saw the growth of ‘Flower Power’. It was the age of the Beatles, Maharishis, soft drugs and fancy hair and dress styles. It was the heyday of a counter culture and Hikkaduwa, like Goa and Kathmandu, were on the must visit list of young backpackers. As Secretary I would often visit Goa and Kathmandu and see the energy in this new market which fortunately our Tourist Board recognized and supported even though the Colombo elite was aghast.
In those days Royal Nepali Airlines was the only air link between Kathmandu and Colombo. Many tourists would visit the Himalayas and then come to Hikkaduwa for its blue sea waters. The flight was so full of stoned backpackers that we called it the ‘Ganja Express’. In spite of frequent spraying of perfumes the inside of the plane reeked of Ganja.
There is a great sequel to my experiences of Hikkaduwa and Unawatuna. Later in time when I worked for the UN I would visit many Ministries in Germany, France and the UK. The front desk would ask for my passport and when I produced my Sri Lankan passport there were so many compliments paid by the then three piece suited officials. The secret was that they had long ago visited Hikkaduwa as young hippies and had an enchanting time in our country.
They were models of middle class respectability now, but had not forgotten the good times they had by the sea at Hikkaduwa. Sri Lanka was entering the world tourism map at a fast clip.
International Kudos
With the dynamism shown by the Tourist Board and the local private sector, tourism in Sri Lanka improved by leaps and bounds. It is strange but true that at that time the -number of arrivals here were greater than the arrivals in India with all its attractions. The main reason was that internal air travel in India was costly and inefficient. It took days to go from one tourist site to another.
Travel Agents in India looked on our developments as a model which could be recommended to their Government. This was shown by the decision of the Indian Travel Agents Association to hold their annual general meeting in Colombo. The main organizer of this meeting, Sita Travels of India, told me that their idea was to showcase Sri Lankan progress in order to convince their Government to follow suit.
Accordingly Mr. Sharma the Indian Minister of Tourism was also present when our Minister Anandatissa delivered the keynote speech. Ananda was easily one of the best speakers in our time and he held the audience spellbound. Biki Oberoi of the Oberoi group, which then managed the Colombo Oberoi, seconded Ananda’s pitch for our tourism development plan and the Indian delegates, who spent another couple of days dining and wining in Colombo and loaded with goodies imported under our free economy, went back delighted. They wanted to influence their Minister to be more like his Sri Lankan counterpart. Sure enough India launched a concerted Tourism drive and is now one of the largest tourist destinations in the world.
London
This event was followed up by the Sri Lankan Exhibition held in the Commonwealth building in London. Our exhibition was a major event in the London events calendar. We exhibited arts, crafts, investment opportunities, hotels, tourism and many other aspects of our history and culture. It ran for about two weeks and had the backing of the UK Foreign and Commonwealth Offices.
The Tourist board had its own promotional stalls and evening receptions with Kandyan and low country dancing. I managed to persuade Arthur Clarke to join our delegation and he gave a well-attended lecture in the Commonwealth lecture hall, on his experiences in Sri Lanka. He also gave numerous interviews and his well-known enthusiasm for his country of domicile gave a boost to the exhibition.
Our man in Europe, Samaradiwakara and our High Commissioner in the UK, Murthy combined with European Travel Agents to boost our image as a growing tourist destination. By this time we were recognized by the trade as a promising travel centre for long haul tourist traffic from Europe.
Another advantage of participating in the Sri Lanka exhibition was that we could negotiate with organizers of seasonal charter flights which would bring large contingents of tourists during the summer and winter.
This was a great success and the hotel and travel sector was delighted. But we had to fend off the objections of Air Lanka which found that the cheaper tickets and more accessible airports of the charters were eating into their revenue. But that was partly due to their own lethargy and the new developments promoted by us made them work harder and review their ticketing policies about which our own expatriates were complaining.
I negotiated with the charter carriers and persuaded them to block book some tickets on regular Air Lanka (AL) flights, which naturally delighted AL because they could show sales without working hard to win clients on their own steam. Fortunately at that time AL was represented by General Sepala Attygalle who understood the primary economic need to increase tourist traffic. That could not be sacrificed for an airline which, being state owned, was now intent on going on an employment spree from among the children of influential in Colombo.
After some time they began to look to the Treasury for subsidies. It was such a drain on the Treasury that we had to later negotiate a partnership with Emirates Airlines. Unfortunately it was terminated by a stupid politically motivated decision and the national airline again lapsed into near bankruptcy. The inefficient national airline and other state corporations are the bane of the Sri Lankan economy which is dragged down by them year after year.
The Taj Samudra
A major milestone in our tourism development was the building of the Taj Samudra Hotel. All our projections from the Board’s statistical division, which was headed by my university senior, H.M.S. Samaranayake, who later became Chairman of the Tourist Board, showed that India will be a major ‘catchment area’ for Sri Lankan tourism. This necessitated a series of follow up decisions to make it a reality.
Establishing Indian brands here was a first step. True enough Oberoi was in Colombo. But they were here on a management contract. Anyway at that time Taj with its flagship Taj Bombay, was the gold standard in the hospitality business. In the words of Biki Oberoi “We are streetwalkers; they are call girls”.
One day not long after the Travel Agents Colombo meeting a high level management group from Taj Bombay met me in office. They told me that their Directors had decided to expand their footprint to other countries and were thinking of Colombo as a first step. Up to now Taj Hotels had not moved out of India and they were exploring possibilities of coming to Sri Lanka because this country was promoting an open economy.
After further exchange of pleasantries they asked for a two acre block from the seven acres in Galle Face which were then occupied by the Fisheries Ministry, the state owned Samudra Hotel and a section of the Tourist Board. I knew that this block of seven acres was easily one of the best locations in South Asia because it faced the Galle face ‘maidan’ and a vast expanse of sea. On one side was the historic Galle Face Hotel and on the other was the old Parliament.
If it was cut up into small blocks as some businessmen were demanding, one of the best sites in Asia would be destroyed forever. The Taj representatives asked for two acres. I told them I would give them seven acres. They could hardly believe their ears because, as they told me later, if they asked for two acres from Indian bureaucrats they would invariably be given only one.
I then took my decision to Anandatissa who fully agreed with my thinking that it should be retained as one contiguous block. He asked me to inform the President and get his consent. I met JRJ and told him about my views. He asked me only one question – “Are they the Tatas?” When I said it was a Tata Group venture he immediately agreed. When the news of approval was conveyed to the Taj board they were so impressed by the speed of our decision making that they not only decided on Colombo but also commissioned the building of their best hotel save the BombayTaj in Sri Lanka.
A new company was set up with a 60:40 share ownership between the Taj group and Sri Lankan investors. the Indian Reserve Bank then put a spoke in the wheel. They refused the transfer of funds from India as they had stringent foreign exchange regulations. Normally that would have spelt the end of the project. But a way out was found by us by making a pitch for investment by Non Resident Indians [NRI] to whom the Taj name was magic.
We launched an advertising campaign for local investors through the stock exchange. The offer was oversubscribed and the construction work on the hotel began in no time. This was a fortuitous beginning because communal riots started in Colombo in 1983 and hotel building in the country was unfortunately curtailed.
We had plans for many more facilities as Sri Lanka was now getting global recognition as an attractive destination. There was to be a string of modern hotels along the coastline. Charles Correa, the famous Indian architect designed another city hotel along the Beira Lake to be managed by the Sheraton Group. John Keells had negotiated with an Italian travel company to build a state of the art sea side resort at Unawatuna.
All were abandoned due to the communal riots of 1983. During my stay in Paris I had promoted a major travel group to visit Sri Lanka and build a five star hotel. In July 1983 while the rioting was going on they called me from their hotel room saying that they could witness the mayhem on Galle road and were getting back to Paris that night itself.
After Taj we could not build hotels for a long time because potential investors, like my French friends, shied away. Our strategic decision to retain the seven acres as a block has ensured that we have a manicured garden in the Taj which has beautified the cityscape. The presence of the Taj Hotel is a powerful impetus for attracting tourists from India which is now our main catchment area.
As I now drive past the Galle road along the Galle Face green which has now seen the building of several five star hotels, I reminisce happily about how it all happened and how I helped in creating a green zone in the heart of Colombo. At that time there was not much agitation about the environment and the common sense of our authorities had prevailed. Indeed we can be proud that due to the planning of the Tourist Board at that time large swathes of our coastline have been retained and beautified by the larger hotels.
The country owes a debt of gratitude to Geoffrey Bawa and other architects who placed the environment in the centre of their hotel designs. It is our special legacy to Asian architecture. Similarly we should thank Arthur Clarke, Rodney Jonklaas, Mike Wilson and their associates for calling for the preservation of our marine heritage. For years they called for a stop to the illicit destruction of our coral reefs. Local politicians did not support those initiatives. But they paid a heavy price when the Tsunami lashed into the villages where the coral barrier had been excavated to make slaked lime.
Akurala village, close to where illicit coral mining was at its worst, disappeared forever. Unfortunately a south bound train passing Akurala was also washed away and hundreds of innocent travelers lost their lives. The situation was so bad that a special office with Registrars sent from Colombo had to be established in Akurala to issue emergency death certificates. Bodies were not found and certificates had to be issued on hearsay. Without hotels, the coral reefs, a national treasure, would have long gone with the complicity of ignorant local politicians and their party leaders.
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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