Port City and wisdom of past leaders

Wednesday 2nd June, 2021

The Colombo Port City Economic Commission (CPCEC) members have been appointed. They are from diverse backgrounds and considered capable, but to expect them to be free to act according to their conscience is to be overoptimistic. Freedom is a luxury that even judiciaries lack in this part of the world. Most committees and commissions have become mere rubber stamps here.

Resistance continues to mount against the Port City project, with the US leading the charge. Now, there are no legal barriers for China, but problems are far from over for Sri Lanka, which will have to face another turn of the human rights screw in Geneva or other such hostile actions on various fronts. The opponents of China’s increasing presence here in the form of investment projects should realise that they are also responsible for this situation. They have, in fact, pushed Sri Lanka into what they have chosen to call the Chinese debt trap.

Sri Lanka would not have been dependent on China so much, if the western powers had responded to its distress calls, over the years. Their attempts to use the armed conflict here to further their geo-political interests on the pretext of helping resolve it through negotiations made Sri Lanka still more dependent on China. Had they helped defeat the LTTE and used their taxpayers’ money to assist the state of Sri Lanka instead of lavishing it on their wine-and-cheese brigade in the NGO sector, the situation here would have been different. It was also their callous disregard for Sri Lanka’s appeals for assistance that paved the way for the first historic trade pact between Sri Lanka and China.

In the early 1950s, Sri Lanka’s efforts to secure a loan of USD 50 million from the US besides favourable prices for its rubber exports and rice imports, during a severe shortage of rice and an economic crisis came a cropper. The Dudley Senanayake government was left with no alternative but to turn to China for help. In 1952, the then Minister of Commerce, R. G. Senanayake, successfully negotiated the now famous Rubber-Rice pact with China amidst stiff resistance not only from the US and its allies, but also from some government members such as Finance Minister J. R. Jayewardene. The current hostile campaign spearheaded by the US against the Colombo Port City and other Chinese investment projects in Sri Lanka reminds us of the situation here about seven decades ago. The US and other western powers should take notice of what R. G. Senanayake said in Parliament (as quoted by the late Dr. J. B. Kelegama in his keynote address at a ceremony to mark the 50th anniversary of the Rubber-Rice pact): “We waited for foreign aid, foreign assistance. As you know Sir, over and over again, we made appeals for Point Four aid, we waited four long years. We have got in the form of assistance only a cook for the Kundasale Girls’ School. Therefore, in these circumstances, it was necessary that we should go where it was possible to get our requirements.”

The 1952 trade pact was a win-win situation for both nations—China got rubber and Sri Lanka rice. Some economists are of the view that the agreement was more favourable to Sri Lanka in that China supplied rice at lower prices and purchased rubber at higher prices. Dr. Kelegama has referred to this agreement as the first instance of South-South economic cooperation.

China has always stood by Sri Lanka, but as for the pacts signed between the two nations in recent years, it is doubtful whether the spirit of cooperation has remained the same. Dr. Kelegama has pointed out that (R. G.) Senanayake praised China in a Cabinet paper thus: “We noted on the Chinese side the absence of the spirit of bargaining and haggling on comparatively small points. On the other hand, they gave us the impression of being large-minded and forthright in their dealings”. This, we are afraid, cannot be said of China anent the deals it has struck with Sri Lanka in recent years; these agreements are loaded in favour of China. The original draft of the CPCEC Bill contained about 25 sections that were inconsistent with the Constitution; the government must have prepared the controversial document at the instance of China, or with a view to humouring it. Thankfully, a judicial intervention helped get rid of those sections, which have however left a bad taste in many a mouth and become grist for the anti-China campaigners backed by the US.

If the present-day Chinese and Sri Lankan leaders are desirous of preventing prejudice against Chinese investment here being whipped up to the point of public opinion turning against them, they had better emulate their far-sighted, illustrious predecessors who were wise and considerate enough to ensure that their actions were mutually beneficial to both nations.