Features
Recovering from Sri Lanka’s present crisis: Challenges and possibilities
By Chandra Amerasekare
The recently introduced Budget for 2022 shows some of the reasons why Sri Lanka fell into the present crisis. The pandemic affected the entire world, but its impact was worse in Sri Lanka as the present government failed to take the right decisions, at the right time, to manage it. Thus Covid-19 contributed to the present situation as the Government closed the barn after the horse escaped. It was pure mismanagement of governance that pushed the country into this mess. This government failed to implement appropriate policies to stabilise the economy and upgrade the standard of living of the masses. On the contrary, by following contradictory and ill-advised policies that defeated the very goals the government was aiming to achieve, and failing to listen to the woes of the people, it made the situation worse for the people and led the country towards bankruptcy, besides selling valuable resources to foreigners. As a result, the entire nation is now on a survival mode: political parties looking for ways to survive and come back to power and the general public struggling to survive in a situation of exploding cost of living and increasing police brutality.
Even in 2015, the country handed over to the Yahapalana government, by the previous Rajapaksa regime was falling apart due to mismanagement of fiscal and monetary policies, from 2005 to 2015, which destabilised the financial system and emptied the Treasury, limiting the incoming government’s ability to run the country. Ill-conceived policies and vanity infrastructure projects created a huge debt burden. By borrowing expensive Chinese loans, with short pay back periods, to construct large projects with no return on investment, like the Hambanthota port and the, airport etc., the Rajapaksa government caused annual debt servicing obligations to escalate sharply, making it impossible for the incoming Yahapalana administration to meet debt repayment obligations from the resources available at the time. The government was forced to go for early elections, hoping for a stable majority in Parliament.
Sri Lankans expected the new Yahapalana regime to bring the culprits, who plundered the country, before the law, but the Yahapalana government failed to do that. Did the lack of co-operation between the two partners of the Yahapalana government lead to this failure? The public continues to blame the UNP for allowing the Rajapaksas, and their supporters, to evade the law, and other political leaders are trying to exploit this to win votes by discrediting the UNP and accusing its leader of deals with the Rajapaksas. The report of the Commission on the April terrorist attack shows how some public servants performed their duties to the detriment of the country and this report might be a guide to understand why the Yahapalana regime failed to bring offenders before the law.
The current Gotabaya Rajapaksa regime, concerned with staying in power, has not changed direction after regaining power in Nov 2019 and continues to tread the same path as before taking the country towards bankruptcy, and the people to despair, spending time in queues to obtain the daily essential at unbearable prices.
People waited for the 2022 budget hoping for some relief. Sadly, this Budget has not given any relief to the people. It contains policy conflicts, shortsighted decisions, weak fiscal measures, statements to camouflage the truth and no substantial proposals to change the direction of the economy, to set it on a growth path, or address the critical issues holding back progress. The budgetary allocations among the Ministries show lack of far sight and concern for the people. The Budget does not say how it will bridge the gap between government expenditure and income in 2022.
During the Budget speech, the Finance Minister, Basil Rajapaksa, stated that the public service is a burden to the country, implying it is costly and bloated. Then in the same breath, a policy extending the retirement age for public servants up to 65 years and promising employment to all graduates next year was unveiled; is an example of blatant policy contradiction. Government has not learnt from its policy mistakes during the past two years. The number of gazettes issued and later withdrawn by this government is proof of this government’s shortsightedness, ineptness and inefficiency. Contradictory and foolish policies, such as import ban, including the ban on chemical fertiliser, price controls and then completely abandoning price controls of essential food items thereby creating blackmarkets, fiscal measures, like tax reductions, which reduced government income, while helping the politicians and government supporters to make money at the cost of consumers, are glaring policy mistakes proving this government’s inefficiency. The government is trying to survive by printing money, leaning more and more on China, selling valuable land to foreigners. All this make Sri Lanka’s future extremely bleak.
Almost 80 percent of the budgetary allocations are for Ministries under the Rajapaksas,including highways, and other departments with a lot of construction projects. The allocation for the military has been increased while the allocation for the Ministry of Health has been reduced in a situation where there is no war, but the pandemic is predicted to continue and become worse in 2022! Already the fourth wave of Covid has been noticed in China, Germany, Sweden, etc. In the US, an increase has been identified. Sweden is going for a country-wide lock down.
Education, too, is not sufficiently provided for, compared to the present need to improve online access to education for all children. Sri Lankan children have missed school for two years, and the majority of them have no access to online education as they are without internet facilities, phones, tabs or even the TV. Does the government realise that children are the future of the country and disruption to education for two years has enormous effects on this generation’s future and mental health? This Budget will not be able to make any difference in the country next year.
To bridge the gap between expenditure and revenue in the Budget, the government will probably resort to selling more and more valuable land, and other assets, to foreigners in the guise of bringing foreign investment. They might opt for more Chinese loans as other donors and multinational agencies are unlikely to support wrong policies that do not benefit the people and unproductive projects which only serve to boost the ego and fill the pockets of corrupt politicians.
Can Sri Lanka recover from this crisis situation?
As things are, it will take at least two years to turn around the economy by any government provided the next variation of Covid does not devastate the country and the world. The scientific community seem to believe that the new Omicron variant, now spreading, might be even more contagious. They also doubt the efficacy of the current Covid vaccines against new variants of the virus. It is difficult to expect a visible change for the better for the next two years if the Covid situation in the world does not improve. However, things could turn around for the better if people follow the instructions of the Health Ministry, and government acts sensibly. The chances of recovering from the current crisis depend on whether Sri Lankan voters succeed in bringing a leader into power who has the capability, experience and the overall knowledge required to manage the economy to get the maximum benefits from global trade and international aid programmes to stabilise the financial system while replenishing the reserves and finding affordable capital to finance development projects.
The challenges to economic recovery
1. The biggest challenge to recovery is the lack of dollars to do international transactions, be it private or governmental, and lack of capital to invest in projects to increase production. It is important to understand that Sri Lanka is an import- dependent country. There is no sector in the economy that can function without an imported input. Imported raw materials and machinery are needed for industries, agriculture, transport, construction and even banking. Dollars are required to import food and oil. The country depends largely on foreign employment, tourism, plantation and garment exports for its foreign exchange earnings. What are the prospects of an increase in income from these sources?
2. Impractical monetary policies that keep the rupee exchange rate artificially low for “show” are driving foreign exchange earners to use unofficial traders/brokers such as the Hawala system; thereby bypassing official channels and reducing the influx of badly needed foreign exchange into Sri Lanka. It is time to incentivise foreign exchange earners to transfer funds into the country through official means, and enact pragmatic monetary policies that balance all of the issues that are affected by exchange rates.
3. With disruptions to the global supply chains and low expectations of global economic recovery after the pandemic that stretched for two years, it is unlikely that global tourism will come back to the normal level, even in a year, since the fourth wave of Covid is already spreading in some countries. Local tourist hotels, except a few, need a substantial injection of capital to resume functioning smoothly. There is no capital available to revive this sector at the moment. Remittances from foreign employment in the Middle East, may not increase for another year or so because of the fears of another wave of Covid and the economies of these countries also have suffered due to global trends. Production in the tea plantations has already gone down due to the fertiliser policy.
4. Everybody knows what is happening in the garment sector. The threat of losing GSP + means losing the market for the garment sector and the industry will collapse. The market for apparels is in the west as most Asian countries and Latin American countries are garment exporters. The Middle East countries prefer branded western products and their traditional dresses. Hence the prospects of an increase in the dollar earnings from the present sources mentioned above are rather gloomy.
5. Attracting foreign investments is one way of overcoming the dollar crunch and lack of capital needed to finance projects that generate employment and exports. Investor confidence in the government of the country where their money is going to be invested is a precondition to attract investors. Enabling a policy environment which allows security for the investors’ profits, ease of doing business and political and economic stability in a country where there is good governance are the important considerations for investors to invest money in a country. This is the very thing that Sri Lanka lacks at present. Only an honest leader who commands the respect of the international community and has the ability to understand future trends in the global economy can succeed in creating such an environment to attract productive foreign investments (not casinos) to Sri Lanka.
6. Foreign aid in the form of loans with payback periods of 25 to 50 years at interest rates less than 2% and outright grants is the best way out for a country, like Sri Lanka, now burdened with external debt and lack of capital. China or Russia does not provide such loans. Only the West, international agencies and Japan provide such assistance. But a lack of good governance; a goal-oriented long-term development plan that does not contradict the donor criteria for giving aid; and a leader who is acceptable to the international community as reliable and experienced who honours international agreements; is preventing Sri Lanka from receiving such aid. Some politicians and opinion-makers, in Sri Lanka, who advocate rejection of help from “‘Imperialist West’ and the IMF and insist that Sri Lanka should depend on local resources, probably have no idea that even Russia and China have depended on foreign aid from the West to develop. US government and Japan still give aid to China considered as their potential geopolitical rival, to promote democratic values, such as free choice through Chinese voluntary organisations. China uses the aid at regional levels to overcome local opposition to some projects and for the technical knowhow that comes with the aid (Dr. Philippa Brant, Research Associate of Lowey Institute titled ‘Why does China still receive foreign aid’ and paper by Issac Stone Fish, both published in ForeignPolicy.com in 2013.)
7. The 20th amendment to the constitution created the possibility for a President to become a despot. The independence of the Commissions responsible for; a) conducting free and fair elections, b) disciplinary control, transfers and promotions of judges, c) transfers, disciplinary control and promotions in the public service, has been virtually revoked by the President by appointing his nominees to these Commissions. This amendment has given the power to militarize the administration. These Military men are in a position to override the decisions of civil administrators. These developments flowing from the 20th Amendment are not acceptable to donors or the UN as good governance is an important criterion for giving aid and democracies in the free world stand for human rights and rule of law.
8. Political culture in Sri Lanka is the last but not the least stumbling block to recovery. The voters responsible for making and breaking governments hardly consider policies or past performance of parties when they decide who should get their vote. They hardly think of the interest of the future generations. Their priority is to get an immediate benefit for the family. Sometimes they have a select memory that enables them to forget grave offences of some politicians while remembering the minor failures of other politicians. So, they keep electing the wrong people to parliament and rejecting better representatives. As a result, lawbreakers, sex offenders, thieves, drug dealers and even murderers go to parliament and its doors are closed to honest and educated people. Voters’ ability to take an enlightened decision is further stunted by the way politicians mislead them by lying and the way some electronic media houses playing the role of kingmakers, present their programs in a manner to mislead the viewers. Politicians know that most voters can be swayed by emotion at the last moment and they resort to using religion and race to sway the voters in their favor. Under normal conditions voter’s priority is to get immediate relief and the majority of them tend to vote for the candidate who promises employment for a family member or a free gift.
On the other hand, there is no visible alternative to this government at the moment. The main opposition has not presented a long-term plan to address the problem other than making promises. The JVP is acceptable to those who consider bringing the culprits who robbed the country’s wealth is the primary objective of changing the government. But JVP also has not talked of the ways to handle the ailing economy. On the other hand, they do not have even a limited experience in governance and economic development or dealing with the international community. Mere book knowledge of economics and organizational ability will not be sufficient to help the country at this juncture. This was proved by the mistakes of the current regime advised by Viyath Maga. The UNP has presented a skeletal plan and the leader is experienced and well received by donor countries and the international financial institutes. But the UNP has been rejected by the electorate at the last election. A coalition between the UNP, SJB and the JVP might be the last slim hope for the country.
(The writer is retired CAS officer, who has served the country for over three decades working in the Finance Ministry and as a representative of Sri Lanka in the UN in New York (1991 to 94 )
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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