Features
Port City on the Beira: looking a gift horse through its derriere
by Jolly Somasundram
“I thought I saw a turquoise sea, billowing smooth and bright.
Wrong! It was an emerging Republic, a 700 acre wee sovereignty,
Passport and flag ready, she awaits an anthem, to enter the UN.
Defying scurrilous on-line disinformation, out of nothing came something.”
It has been done or has it? The Port City Bill has received overwhelming approval of Parliament, all amendments suggested by the Supreme Court were incorporated, so that a referendum or 2/3rds majority requirement were foreclosed. On the Speaker signing it, following due process, the Bill became law: it is within the constitution. But social media, for which truth is not a troubling issue, are carrying out a carping, personalised campaign of innuendo and insinuation against it. It would be useful to revisit the foundational bases for this law, to judge whether there is something genuine in their concerns or social media is merely flying someone else’s flag for advantage.
Natural harbours are created by nature, artificial ones by man. Both enclose the sea. Sri Lanka provided a wrinkle: a sea was drained, at a cost of US$ 15 Billion, creating a land mass on which six million square meters of built space will be erected, for commercial users. This collectivity is the Port City. The entire operation- of reclamation, building, and providing equity and debt finance- was undertaken by the Chinese: there were no Chinese loans given to Sri Lanka for this purpose, thereby leading her to debt enchainment and traps. Sri Lanka will receive half of the reclaimed land as a gift to her people. The balance, on which Chinese driven development will take place, was leased back to the Chinese for 99 years, an instance of one’s own product being back- leased. It will be managed by a corporate body headed by a very senior, experienced and highly respected Sri Lankan. This deal was riskless for Sri Lanka, for it was an asset created with no debt or funding from the Budget. Those who risk going far, would only know how far they could go! The reward of this deal came in aces. What was the catch? Punch drunk with debt blows and Sri Lanka on the fiscal ropes, Sri Lanka was not an enticing investment market. The public could not believe this deal. It was so good, it must be bad! Conspiracy theories sprouted. Social media referred to secret deals (if there were, how would they be known?). It had a whale of a time, broadcasting fake news- Galle Face Green will become a brown, they said, but a quarter mile of verdant green had already been added. The cliché, there is no free lunch, was widely bandied. Classical Latin vendors darkly quoted Aeneas, “beware those who come bearing gifts.” (Timeo Danaos et dona ferentes.)
The fable of the Arab and the Camel was invoked, the Camel, given accommodation in his tent by the trusting Arab, used its vantage fulcrum point, to craftily mount a successful reverse takeover bid and later, dispossess the owner. This 700-acre transistor Republic- smaller than any municipal ward in Colombo – would be the first stop in making the country a Chinese colony, to be renamed Sino Lanka, they alleged.
There is confusion between rights of equity providers and of sovereignty governors. Lever Brothers, a British multinational, owns significant land parcels in Grandpass. They have managerial rights over company activities but these do not morph to exercising governance powers over Grandpass. Debt-equity swaps are a standard management tactic, to transfer risk from a debtor to owner, as Hambantota showed, but they are not equity-sovereignty swaps, like the Louisiana purchase of the US from France, a century and a half ago. In the Port City project there is no debt, all the equity is held by Sri Lanka. The Port City asset leased to China for 99 years is unlike Guantanamo, where the US forced Cuba to renounce sovereign rights over this parcel of Cuban territory to itself and in perpetuity too.
History repeats but, it is now claimed, with Chinese accents. 70 years ago, newly independent Sri Lanka (then Ceylon) was in dire straits as there was a severe shortage of rice. The Korean war was on and the price of rubber rose precipitously. Sri Lanka being a rubber exporting country was unable to take advantage of this bonanza because the US frowned on rubber trade with China. China countered with a win -win offer. She sold rice to Sri Lanka at a lower price than the market and purchased rubber at a higher price than what the market offered. The nay-sayers were aghast, “there is a catch in this. It is the first step in the takeover of our newly independent country by China,” they growled. The government, though a West oriented one, stood firm. The US retaliated by cutting off assistance under the Battle Act. Today, sanctions would be the retaliatory measure. These alarmists need only scan a map. A Chinese air fleet would take eight hours flying time to reach Sri Lanka with a refuelling stop in-between, a navy will take three days. Napoleon was defeated by General Winter in his abortive invasion of Moscow. General Distance with stretched supply lines, would prove an invader’s nemesis with respect to Sri Lanka. A successful invasion of Sri Lanka is a fantasy of unthinkers, futile as The Charge of the Light Brigade.
The Rice-Rubber agreement has lasted 70 years with no adverse repercussions. It was renewed periodically by every government, irrespective of ideology. The same anti-China arguments offered then, were now dusted and re-presented. But the international situation has changed. A Thucycydian trap has inserted itself. What happens when an upstart power challenges a long established one? The US superiority is in hard power- land, sea (750 bases all over the world, some nuclear armed), undersea, air, cyber, nuclear and space. China’s counter was soft power, build infrastructure all over the world, a dire need if the third world were to benefit from development. The Port City furore is all about geo-politics, of a change of power relations, whether a numero uno would let itself get downgraded tamely without resistance.
The US used its superior public relations repertoire to denigrate China by instilling fear of the Chinese Dragon swallowing innocent Sri Lanka, the Arab and the Camel fable re-furbished. Social media provided the billboard.
Anything is permitted for debaters. For them,
To be or not to be, is not a question,
But a continuing answer.
The time has come to talk of many things,
Whether pigs have wings?
These debaters are eternal talkers of the ‘could’ (the possible), but not of the ‘can’ (doable) or making the doable an ‘is’ (done). Only a century ago did human beings grow wings to fly. Perhaps, eventually, pigs too may get air borne! Just seven years ago an entrepreneurial chance was offered to Sri Lanka, to get built a Port City. The central issue was how, a ‘Could’, be made to become a ‘Can’ and later, an ‘Is’. The challenge was taken. Rewards go only to the venturesome, whether in life or in love. The losers, chagrined, then take recourse to social media, with gossip, unsupported accusations of corruption, abuse- the fox and grapes- and fake news. Social media played the Game of Losers: they lost. Their opposites- past masters- played the Game of Winners: they won and handsomely too.
When new projects are proposed, professional contrarians and fundamental rights lawyers are attracted to them, like blue bottles to rotting protein or gossipy social media, to gain carrion comfort. Columbus had a trying time getting acceptance to go West, to an unknown land mass. This was the time when Flat Earth was the prevailing cosmology. The question was posed, what will happen at the end of the outward journey? When the Gal Oya scheme was proposed all the Left political parties opposed it, saying the reservoir will silt in twenty five years. If the current social media were in existence then, they would have talked of deforestation, environmental degradation, rights of those living in the this doomed habitat- the Vedddahs. If these protests were heeded, one could imagine what Amparai would be like today. With the wave of new independent countries post- 1950, the UN wanted to set up regional Economic Commissions. One was proposed for Asia and the Far East (ECAFE). The headquarter location was offered to Colombo. Sri Lanka turned it down. Bangkok grabbed the chance.
“No” is the ugliest word in the vocabulary of development. It gives power to those who do not take responsibility for their decisions like the ECAFE one. It is against entrepreneurship, it conspires against innovation. The cost of projects undertaken could be measured but not the cost of projects not undertaken, caused by the fall of the kaduwa, no. No is reactionary, it congeals existing social and economic structures to an unchanging permanence which induces a violent revolution to dissolve. No Bungawewa!
Saying “yes” to a postage stamp Port City has developmental benefits, a sea change of the land where the sea had been drained. The investment is very high. To be able to pay the interest on loans taken by the Chinese, instalment payments and have a modicum of return on capital, the Port City cannot depend on cultivating turmeric, green chillies, setting up garment factories or exporting domestics. It has to go very high tech with high value addition serving overseas markets. A matured Port City is not for this century but the next. As much as the determining economic activity of this century is Information Technology, the next would be Artificial Intelligence (AI)- in which robotics will have a major part to play- cryogenics, global financial innovation where economic activity is a 24 hour business cycle following the sun in its progress from East to West and East again. In none of these activities has Sri Lanka significant experience. The Sri Lankan work force entering the job market are journeymen, making their daily journeys to homes of politicians in search of permanent, pensionable government unsackable jobs. The Port City will be a training ground for high paying jobs in high tech, jobs having international demand.
There is downside too. The lubricant coursing through Port City’s different functions and parts is cold cash. The Port City will have a different culture where cash is king. There will be cultural costs where value is determined by cash not morals. Port City could become a cesspit like Havana under Batista. The governing board has to keep a laser eye peeled to prevent it.
Change is necessary for stability. Sri Lanka, instead of getting involved in Thucycydian dialectics, should clearly survey the current scenario through unprejudiced eyes. Spurning China is monumental folly. China is becoming a superpower. The Port City project is giving Sri Lanka an opportunity to prepare herself for next century’s strategic commitments. Decisions taken now will determine whether she will be an exporter of domestics, which brings her, her highest foreign exchange earnings or a Singapore, who, when she was ejected from the Malaysian Federation had to import drinking water. Today, she is the third highest exporter in the world of oil products, though she does not have a drop of oil.
Will Sri Lanka be a Nepal or a Singapore?
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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