Features
Selling Oil, motor racing and moving from Shell to Reckitt and Colman
Excerpted from the memoirs of
Lalith de Mel
His first real job was with the Shell Company of Ceylon Ltd. Which her joined at age 22. The Research Economist role at the Coconut Research Institute was almost a continuation of life at Cambridge. Academic research at one’s own pace was close to preparing a piece of work for the supervisor.
Shell was a proper job. He had a boss, and he had to accomplish whatever his boss wanted him to do in an industry and in activity that was far removed from Economics. It was new territory, marketing petroleum products. It was his first encounter with petroleum and his first encounter with marketing, but he settled easily into the world of commerce.
His first role at Shell was working directly for the Head of Marketing as his Personal Assistant. He was an experienced petroleum man and a rather unfriendly Egyptian national. His core role for Lalith was having him prepare feasibility studies on building new filling stations.
Shell worked a half day on Saturdays, and Mike Khoury (that was his name) would give him an assignment around 11 a.m. and insist that he gets the report the same day. He did this regularly and justified it by saying that it was only on Saturday afternoons that he had the time to study investment projects. Lalith grudgingly says that this was probably true.
After his stint as a PA he was given responsibility for marketing kerosene and reporting to an Iraqi national. The man was happy to not exert himself unduly and probe the rural markets and to leave it all to Lalith. He was pleased that as a 22-year-old he was virtually responsible for marketing kerosene, which was perceived as a product with good growth potential. It was the main source of lighting in rural areas and the task was to persuade housewives to move from firewood to kerosene for cooking.
He enjoyed the opportunity of traveling all over the rural areas. It was perhaps this understanding of rural areas that has triggered his firm belief in the need to develop rural areas, on which theme he has written many articles.
From kerosene, he became a part of the Retail Marketing team. That was the engine room that drove sales of Shell products. Shell was one of the key retailers of petroleum products worldwide. The main competitors globally were equally big boys. Market share varied. The way Shell International ensured consistency in approach across the world was by having detailed process manuals for all parts of the marketing mix. The local companies had to develop their campaigns within the lines set by the process manuals. It was a wonderful course in structured marketing. He says it was like doing a marketing degree and freely admits that he learned his marketing at Shell.
After a few years, he was moved to the Finance Division. He had twin roles. In addition to carrying out a normal accounting function, he worked in the special unit created to study the options for formulating claims for compensation for assets that were taken over by the Government when Shell and the other oil companies were partly nationalized. He quickly became head of this unit and his last role was in putting together the claims for compensation on the agreed format, signing on behalf of Shell and submitting the claims to the Government.
Shell was keen that he should continue his lectures at Aquinas, and he continued to teach students studying for the BSc London University Economics degree in the evenings.
Outside work, Shell was a fun place. It had an excellent sports ground. He got into the cricket team that was in the A division of the Mercantile league. He also played badminton and hockey in the inter-firm tournaments. Shell took a keen interest in motor racing. The objective was to get the top drivers to use Shell petrol and Shell oil. Dudley Perera, a very Senior Manager at the time, was the link man between Shell and motor racing and Lalith became his assistant.
The atmosphere at motor race meets, the roar from the cars, the smell of burning oil and the vibes from screeching tyres got to him and he started motor racing. He drove a red MGA with the distinctive number plate I SRI 5555. He raced for many years and had his share of wins both at Katukurunda and the Mahagastota Hill Climb in Nuwara Eliya. In one event at Katukurunda, he raced with Upali Wijewardene, his Cambridge University friend and subsequent famous entrepreneur, and Asoka Gopallawa, the son of the Governor General, all driving MGAs.
How Shell plans management succession
“After five years at Shell, I felt the urge to move on. There was uncertainty about the future, with partial nationalization of the petroleum industry. The exciting future appeared to be in the new foreign investments to set up the manufacturing industry.
When I sent in my resignation, I was summoned by the General Manager, a Dutchman named Jan Van Reeven. He did not want me to go as they had identified me as a potential International General Manager. I probably had a bemused expression on my face and so Van Reeven said, `Let me explain.’ He said that Shell had over 100 operating companies around the world and they had 100 General Managers, some would move to other companies, some would get fired and the rest would eventually retire at some stage in the future. So he said it was a continuous process in Shell companies to identify potential future General Managers and to develop suitable career paths for them that would eventually lead to a General Manager post in the future.
The process, he explained, was for operating Shell companies to seek and recruit outstanding persons as management trainees from time to time. The new trainee’s first job is to work for one of the directors as a Personal Assistant. At the end of this period, an early call is made as to whether the person is a potential future GM. If the answer is yes, the trainee is given a challenging career path and reassessed at the end of each year.
`As your preferred path was Marketing, you were given various marketing roles,’ Van Reeven explained. After three years the Shell approach was to test the trainee in a different discipline. “That’s why you were transferred to Finance as an Accountant.’ He then said: ‘After five years, we were convinced you would be a future GM and our development plan is to transfer you to the international pool as an employee of Shell International and transfer you to a Shell Company overseas.’
I was having a great social life in Colombo and had no desire to go and work abroad. 1 thanked him for the excellent training I had at Shell and said all the appropriate nice things about Shell and Van Reeven and then said I was firmly committed to pursuing a Marketing career in a consumer goods company. He was very gracious and wished me well and as I got up to leave he said, ‘Someone I know is setting up a multinational manufacturing company and he wants a marketing man; would you like to meet him?’ I said yes and he sent me to meet Alex Alexander, the Managing Director of Reckitt & Colman of Ceylon, who was setting up the business. He offered me the Marketing Manager role. I accepted, and that was the start of my journey with Reckitt & Colman.”
He was marketing manager of Reckitts at age 27 and a director of that company at 29-years.
Shell always had a big advertising budget. Their agency was Grants, then headed by Reggie Candappa and his assistant was Anandatissa de Alwis, who later became Minister of State and the Speaker. Later on in life he started his own agency, De Alwis Advertising. Lalith said: “They both became good lifelong friends. I signed them on and they became our advertising agents at Reckitt & Colman. They deserve a good part of the credit for the excellent sales performance of the string of brands we launched.”
The first Marketing Manager of Reckitt & Colman of Ceylon was Michael Morris. He had been with the Indian business for a few years and came to help to set up the new business in Sri Lanka. He was in Sri Lanka for a relatively short period; he decided to go back to the UK as his wife was a doctor and wanted to go back into medical practice. This created the vacancy for which he was recruited. Morris later became a Member of the British Parliament and Deputy Speaker and was then ennobled to become Lord Naseby. He was recently in the news about war crimes in Sri Lanka. He continues to be a good friend.
Two Englishmen had been sent to start the business, Alex Alexander as Managing Director and Peter Crisp as Factory Manager. All the hard work was at the manufacturing end. Disprin was being manufactured for the first time outside the UK. A whole host of previously imported products were progressively locally manufactured.
The excitement of getting a job as a Marketing Manager of consumer products in a multinational company was short-lived. He soon felt it was a well-paid non-job with nothing to do by afternoon. The Reckitt’s products were distributed by E.B. Creasy & Co. and the Goya range by Lalvani Brothers; the advertisements were sent from the UK. All the advertisements were ones used by the group in the UK. All he had to do was send them to the advertising agency.
Basil Reckitt on a visit to Sri Lanka, with Lalith de Mel at an evening reception
After a few months he assessed the scene and made his move. It was brave, reckless or foolish. He had never marketed any consumer products, knew nothing about the Pettah wholesale market which controlled 50% of sales and had never managed a sales force. He was good with numbers and knew how to put together convincing project proposals (learnt the hard way at Shell).
He formulated a proposal to terminate the distribution agreements, to set up his own marketing office and to recruit a sales force, a product manager and an advertising manager. In his proposal, he demonstrated that the commissions paid to the two distributors would more than cover the cost and in fact make a significant contribution to profits. The MD Alexander was impressed with the proposal and bought into the idea. He had just asked one question: “Are you sure you can do it?” When Lalith said “yes,” Alexander had said, “Okay, go and do it.”
He did not quite know how he was going to do it. There were many things he had not done before but he was certain that he could do them. As subsequent events will show, this was a trait he carried right through his life. He persuaded Terrence de Silva who had worked for him at Shell to join him as the Manager for everything – HR, admin, credit control, managing the fleet of vans, etc. Terrence was with him as a part of the team until he left for England. Terrence was the engine room of the Marketing division and kept everything running smoothly, whilst he launched and developed a great basket of products.
They had an amazing array of products, such as Disprin, Dettol, Brasso, Silvo, Robin Blue, Harpic, Mansion polish, Cobra shoe polish and the Goya range of fragrance products such as perfumes, colognes, talc and soap. One by one they were rolled on to the market and it was a great challenging time for him.
Fortunately it all worked out well, the sales grew, there were no bad debts, which was always a risk with the Pettah wholesale market, the profits grew and the business was highly successful and profitable. The overseas investors were pleased.
Basil Reckitt’s visit
There is a story that must be told. Basil Reckitt, the Chairman of Reckitt & Colman UK, came for the formal opening, which was also attended by Prime Minister Sirimavo Bandaranaike, as it was the first major foreign investment in Sri Lanka during her tenure as the Prime Minister.
They were seated next to each other and chatting and she asked Basil Reckitt whether there was anything that she could do and he said, “Please could we have a telephone?” Those were the days when it was impossible to get a telephone. When Lalith became the Chairman of Sri Lanka Telecom later on, his objective was to make sure that anybody who wanted a telephone would get one within a week and by the time he left his role this objective had been achieved.
Marriage
In 1966, whilst he was busy building the business, he also got married. His wife was then an undergraduate at the University of Colombo and she had to continue her studies to complete her degree. After she graduated, she started working in the university itself Since she was studying, they did not have a much of social life in the evenings, so he thought it would be useful to do some studying himself and he started studying Accountancy. He completed the intermediate exams of Cost and Works Accountants, the precursor of CIMA, and also did the exams to become an Associate of the Institute of Book Keepers. When his wife graduated and was no longer poring over books in the evening, he stopped his studies. However what he had learned proved to be very helpful as it helped him to develop a good understanding of finance and accounting.
Managing Directors
Alex Alexander moved on to another part of the Group and was followed by Mark Foster, who was also a Cambridge graduate. When Mark moved on, he was followed by Greg Courtier, who became his third British boss. He did not resent this as that was the style back then, where all foreign firms had a foreigner as the Managing Director.
He was asked to say something in his own words about his key achievements and his relationship with his foreign bosses during this period. Multinationals controlled their businesses from Head Office. The local Managing Director reported to a Regional Director at Corporate Headquarters. There were very specific guidelines on what required approval from HQ
“All advertisements were sent from the UK. For the local language press we had to translate the English ads. After my spell at Shell, I appreciated that multinationals wanted to preserve the brand footprint and have the same consistent message all over the world. The challenge was to wriggle some freedom within this constraint in order to create better advertising that was more relevant in the context of the local market. After a long exchange of correspondence, I succeeded in getting approval to create our own ads.
I had to stay within the parameters of the global branding footprint but was given freedom on how to convey this in local media. We were probably the first Reckit’s market in the Commonwealth to win
this concession. I also got approval to shift the positioning of Dettol from solely a treatment for cuts and wounds to a personal care product that prevented infection. I pursued this right through my career and created a mega global brand in developing countries that is still growing. Dettol is
amazing marketing story as nobody has seen germs or seen Dettol kill germs, but were made to believe that it did provide protection from germs.Both Mark Foster and Greg Courtier were marketers, but they knew nothing about how to market and advertise products in Ceylon. They thought it prudent not to interfere with me and I had the freedom to operate in effect without a boss in the Colombo office whilst the MD worked out of the factory and office at Ratmalana. The challenge in a multinational is getting this freedom.
The wedding retinue, with Bestman Upali Wijewardene
The UK office was pleased with the results and naturally the MD got the credit for the good sales and profits growth. I made no claims for any credit from our lords and masters in the UK for the good results. When the Head Office staff visited the business, I made it a point to say as many times as possible how much I enjoyed working with Mark/ Greg and said I greatly valued their guidance. It was true I enjoyed working with them because they did not interfere. As for guidance it was not true, and they were not really able to provide any meaningful guidance.
But strategically it was a good thing to say, so this led to a good partnership with the Managing Director. Not getting the credit and warm congratulations from the parent company was a small price to pay for having complete freedom. I steered well clear of the pitfall of trying to get plaudits for the company performance from the overseas owners and getting into a competition for praise with the boss and thereby having a not-so-congenial relationship with him.
I had a gut feeling that payback time would come. They were possibly slightly embarrassed to take the credit for my sales and profits results and had to do something to acknowledge my contribution. They recommended that I be made a Director of the Ceylon Company, which was a public quoted company.
I was pleased and content. That was as far as one’s aspirations went in those days, to become a director of a local multinational company. There was no ambition to go any further, because less foreign firms were likely to always have a foreigner as the head of their business.
The Government formed a new company named Consolidated Exports and it came to be called Consolexpo. This was a joint public sector-private sector partnership to generate and support the growth of exports. I was flattered and pleased when I was invited to join the Board. This was my first experience with the Government sector. It was also my first Board appointment outside Reckitt & Colman, so I count this as one of my achievements during this period.
Then one day a visiting director from the parent company called me in for a chat. He said they had been following my progress and were pleased with what they saw. He said almost casually that I might have the chance of being the first Sri Lankan Managing Director, but added in the same breath that I would have to prove myself in another market. I impulsively asked whether I could be sent to Australia. Half my vintage Josephian rugger team and all my Burgher school friends had migrated to Melbourne. I thought if I had a spell in Australia I could have a whale of a time with my old buddies.
The visiting Director said, ‘We will let you know in due course’ and eventually they told me that they had decided I should go and work in Brazil as a member of the management team of that company. That was their biggest business in South America and it was a huge market. Brazil was five times the size of India.
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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