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The Ministry of Planning and Economic Affairs

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by Leelananda de Silva

One day in late November 1970, I received a telephone call from Professor H.A.de.S Gunasekara who had been appointed Permanent Secretary of the Ministry of Planning and Employment (MY/P&E) in July 1970. This was the same ministry of planning and economic affairs of Dr. Gamani Corea, but it changed its name for a couple of years until it reverted to the ministry of planning and economic affairs (MY/P&EA) after 1973.

I will relate that story later, and I shall describe my ministry as MY/P&EA throughout. H.A.de.S had been my lecturer at the university and knew me well. He offered me the newly created post of Senior Assistant Secretary (SAS) in the Ministry. He told me that I would be in charge of administration, and the management of cabinet affairs, this being an important task, as the ministry received almost all cabinet papers for observations.

I assumed duties at the MY/ P&EA in December 1970, and I was to hold the same position for the next seven years, until December 1977. From mid-1971, in addition to being SAS, I was to be the Director of the Division of Economic Affairs, which came about through the merger of the previous general economic affairs and private sector divisions. This division, over the next five years managed that part of Sri Lanka’s international economic relations which were dealt through the United Nations (UNCTAD, ECAFE, UN General Assembly, UNDP in New York, FAO, the Commonwealth and others) and North-South and Non Aligned matters, leading to the Non Aligned Summit in August 1976.

The Division also kept up its responsibilities for the private sector. To have reached the position of SAS in one of the leading ministries of government at the age of 34 was something to be pleased about.

At this point, let me briefly describe what the MY/ P&EA was. It had been established in 1965 by the then Prime Minister, Dudley Senanayake, with Dr. Gamani Corea as the permanent secretary, and it came directly under the Prime Minister. During the 1965 – 1970 period, it was the pre- eminent ministry, with the ministry of finance playing a subsidiary role.

Dudley Senanayake was fully engaged in domestic economic policy making, and the Minister of Finance, U.B. Wanninayake, was happy to go along with this arrangement. After 1970, the Prime Minister and Minister of Planning was Mrs. Sirimavo Bandaranaike, and she was much less engaged in domestic economic policy making. She led a coalition government, sharing power with the LSSP and CP. The Minister of Finance was Dr. N.M. Perera, leader of the LSSP and a dominant political personality.

Between 1970 and 1977, the planning ministry was a partner with the ministry of finance in managing domestic economic affairs, and there was much tension in the relationship. H.A.de.S was not as close to the Prime Minister Mrs. Bandaranaike as Gamani Corea was to Dudley Senanayake. There was personal acrimony in his relationship with the finance minister Dr. N.M. Perera. Whatever the tensions the MY/ P&EA and the ministry of finance had to get on. The central bank’s role was relatively subsidiary. The MY/ P&EA had a particular task of managing the capital budget of the government, and dealing with foreign aid, apart from other domestic and foreign economic policy issues.

The seven years (1970 – 1977) I spent at the Ministry of Planning and Economic Affairs were the best years of my career. The ministry was right at the centre of government. I had responsibilities, both in domestic and foreign affairs. The foreign and international component of my work evolved rapidly from 1973, as Sri Lanka became actively involved in non-aligned matters, leading to the Summit in Colombo in August 1976. The Prime Minister appointed me to be the Secretary of the Economic Committee of the Summit.

This period overlapped with the North-South dialogue taking place at the time in various UN bodies and elsewhere, and for which my division was responsible. From 1975, over the next three years, about three fourths of my time was spent on international economic relations. This work entailed travelling to many parts of the world for meetings and conferences, and many times accompanying the Prime Minister, starting with the Non-Aligned Summit in Algiers in 1973.

I worked closely with the ministry of foreign Affairs during this period. My division of economic affairs, handled almost all UN economic issues, and the division during this period was almost a part of the ministry of foreign affairs. That is how the Prime Minister wanted it. I was also engaged with the economic side of the Commonwealth, and attended two Commonwealth summits in Kingston, Jamaica in 1975 (accompanying the Prime Minister) and London in 1977.

At these summit meetings, and in the bilateral visits where I accompanied the Prime Minister, I had the opportunity to observe diplomacy at the highest levels. One special event in March, 1974 was the 30th annual sessions of the Economic Commission for the Asia and Far East (ECAFE) held in Colombo. (ECAFE changed its name to ESCAP at these annual sessions.) I was entrusted with the task of organizing the event, and I was the secretary-general of the conference. This was the first ever international conference held at the Bandaranaike Memorial International Conference Hall (BMICH) and the largest in Sri Lanka.

Aside from foreign affairs, which became a dominant feature after 1973, 1 had many responsibilities on the domestic side. Relations with the cabinet for the ministry was my responsibility. I had to produce a note every week to the Prime Minister on the cabinet agenda. This provided in summary form the contents of the important cabinet papers, and the observations of the planning ministry on each of these cabinet papers. The Note never exceeded two pages.

The Prime Minister saw the Ministry of Planning as assisting her in her relations with the cabinet. I worked closely with the cabinet secretariat, and I had the opportunity to be present at cabinet meetings, at the behest of the Prime Minister. I was in charge of the administration of the ministry, which expanded during these years. I was entrusted with the task of overseeing the Department of Census and Statistics, Water Resources Board, National Film Corporation, and the Export Promotion Secretariat, all of which came under the ministry.

I had responsibilities for the ministry’s relations with the private sector. I represented the ministry on many Boards and Corporations – the Sri Lanka Tea Board, Ceylon Shipping Corporation (CSC), Port Cargo Corporation, Colombo Dockyards Limited, Ceylon Freight Bureau, Mackinnon Mackenzie and Company (a private company, 40 percent of it owned by CSC), the United States Educational Foundation (now the Fulbright Commission). I was Alternate Director for Sri Lanka of the Asian Productivity Organization in Tokyo.

My tasks were not restricted by any job description. The Prime Minister and the Ministry Secretary assigned me other tasks from time to time. One of them was the organization of negotiations for the payment of compensation for Sterling Company Estates which were taken over. I was a Member and Secretary of the Committee which handled this question and negotiated with British interests. Another was the Cabinet Committee on the Brain Drain, which the Prime Minister appointed, largely at my suggestion, and eventually, published an agreed report on this question. I was assistant secretary of this Committee, and virtually the secretary.

Other key tasks were the international negotiations on tea, mostly in Rome, where I represented the government with others. I also handled for the ministry, the high-profile Seers Mission, which visited Sri Lanka in 1971 to advice the government on economic and social issues. There were numerous other activities I was engaged in, which I shall not describe here. There was nothing routine in the work of the Planning Ministry.

Let me try to remember those with whom I worked at the time, 40 years ago. The Prime Minister and the Minister of Planning and Economic Affairs, Mrs. Sirimavo Bandaranaike, was a constant presence in one’s working life. We did not make a distinction between her Prime Ministerial role and Ministerial role. It was all one. There was the clear impression that the MY/ P&EA was in effect part of the Prime Minister’s extended office.

Since the creation of MY/ P&EA, Prime Ministers tended to rely on it for substantive domestic economic policy management. The Prime Minister was the best Minister one could have. She was very responsive to the advice of her officials and she sought such advice. That did not mean that she always accepted the advice. She had other considerations, specially political, but I have never seen her belittle official advice.

Mrs Bandaranaike always kept a calm head and was consistently courteous to her officials. She was very rarely angry and had a tremendous sense of humour. I had contact with her at several levels. First, at the weekly meeting, the Prime Minister had with senior officials of the MY/ P&EA. I had contact with her on cabinet issues and many times on a Wednesday when the cabinet met. In the latter years, my contact with her increased on foreign economic policy issues, specially non-aligned and north South issues. I saw her when she was on her foreign travels as I accompanied her on these trips. My memory remains of a cordial relationship during these seven years when I worked for her.

I had almost daily contact with H.A.de.S, either on the telephone or at meetings. It was easy to get on with him and only on a very few occasions have I seen him really angry. By nature he was friendly, although he had a touch of insecurity, which was ingrained in his nature. Having been an academic, and a distinguished one at that, he developed a more political approach during his tenure at the ministry. He was not anxious to listen to theoretical economic advice. He was not interested in the economic discussions that were taking place in the United Nations and non aligned circles and he left all that to me.

When I suggested to him that he attend some of these conferences, he told me that what he wished was to avoid them. His major interest was in domestic economic policy and in taking planning and development to the regional and district levels. He travelled considerably more than Gamani Corea within the island. I remember one incident clearly. The then UN resident coordinator, C. Hart Schaf (must be in about 1972) had come to see H.A.de.S and was kept waiting for nearly an hour. I was passing by and Hart Schaf whom I knew well brought his situation to my notice.

I walked in to H.A.de.S ‘s office and suggested to him that he should see Hart Schaf. His response was that he was not looking for UN jobs and was not in the business of pleasing UN officials. Anyway, he saw Hart Schaf immediately. H.A.de.S had a dim view of UN activities in general. I was not in Sri Lanka when H.A.de.S passed away after his Ministry days and his last two years were not happy. I owe a lot to him and look back with pleasure and gratitude.upon a close friendship with him and his wife, Leela who was my contemporary and friend at the university,

During these seven years, I was in close touch with three senior officials from outside MY/P&EA. M.D.D. (Dharmasiri) Piers, who was Secretary to the Prime Minister, was one of the finest officials I have worked with. I had to be in close contact with him, as I had to be in touch with the Prime Minister. Most senior officials of the MY/P&EA had contacts with Dharmasiri. I would think the job of Secretary to the Prime Minister requires a very high level of administrative, diplomatic, and substantive skills, and Dharmasiri was possessed of all these qualities.

Dharmasiri was always pleasant to work with, with a great sense of humour and an inner calmness, which I have rarely come across in senior officials. I had the opportunity to travel with him abroad and that was enjoyable and productive. We have kept in touch even to this day, and he and his wife Chitra, have been close friends of ours. W.T. Jayasinghe, Secretary of Foreign Affairs was another fine gentleman. A highly able man, who was a workaholic, he never lost his sense of humour.

He had what might be called perspective in dealing with issues. He was always kind and generous to me and I remember travelling with him to Rome and Algiers, a trip I shall later describe. Rukmal and I were friends of W.T. and his wife Brenda and this friendship continued until W.T. and Brenda passed away a few years back. Arthur Basnayaka, Director General of Foreign Affairs is another official I had a close working relationship with. An unassuming, charming man, he had seen the diplomatic circuit in many incarnations and carried out his duties without any sense of self importance.

He always saw the funny side of things. Traveling with him was always a pleasure. His wife Damini and her family were friends of Rukmal’s family. I was lucky to have had these three senior officials to work with. There were no problems of demarcation as to whose task it was, with these three officials, when discussing subjects with the Prime Minister. One other person I should mention in this context is Dr. Mackie Ratwatte, the Prime Minister’s brother and private secretary, whom I saw frequently and traveled with on many occasions. He was a gentle and self effacing person who was always helpful.

In my own division of economic affairs there were several fine officials, W.S (Wilfred) Nanayakkara was deputy director of economic affairs. He was of great assistance to me in several of my tasks, specially in organizing the ECAFE annual sessions in Colombo in 1974, and also in the work with the United Nations in New York. Rukmal and I were friends with his wife Malkanthi. Lloyd Fernando, who became deputy director, was there for some time, before he proceeded abroad on post graduate work.

Hilary Codipilly was an assistant director before he proceeded to the World Bank. There were two bright ladies who were assistant directors- Chandra Wickramasinghe (later Rodrigo) and Indrani Sri Chandrasekara. They were particularly helpful in the run up to the ECAFE conference held in Colombo. Indrani left us after three years and she was later employed in Washington at the International Food and Policy Research Institute. Chandra Rodrigo was to later become professor of economics at Colombo university, and she was highly regarded in academic circles for her research into labour market issues. She was released to us from the university for two or three years.

H.A.de.S and I were very keen to get more young lecturers from the university for short spells at the ministry but university authorities were not keen on this. There were several outstanding clerical servants who worked with me in the division. I could leave a lot to them. Upali Gunawardane (whose untimely death in the 1980s was a great loss to me), M. Sally and Heather Schumacher deserve special mention.

Walvin Perera, who was the accountant in the ministry, relieved me of any worries in managing the financial and accounting side of the work. He was an excellent finance manager. Egerton Baptist, the well-known Buddhist scholar, was my stenographer, and he was outstanding and always out to point out to me my mistakes, as he had an excellent command of English. We kept him on even after the age of 60, as he was irreplaceable as a stenographer, and his type was fast vanishing from the public service scene.

Apart from these officials in and outside the ministry that I have referred to, there were others within the ministry with whom I had working relations. Several of them had come over from the Gamani Corea administration. Godfrey Gunatilaka was Director of Plan Implementation, and was soon to be Additional Secretary of the Ministry. Godfrey was an outstanding public servant who had made an enormous contribution in assisting Gamani Corea to establish the Ministry of Planning and embarking on a concerted effort to improve the systems of economic planning in the country.

He was soon to leave the ministry to establish the Marga Institute, one of the earliest development research instituted in Asia. I was to work with him later in the Third World Forum in Geneva. Godfrey was a close advisor to Gamani Corea in UNCTAD. I have known Godfrey and his wife Bella now for over 40 years and we are now family friends. He is now the Chairman of the Gamani Corea Foundation.

Godfrey, if he did not join the civil service, would have been the Professor of English at the university. Lal Jayawardane continued in the perspective planning division and later became an additional secretary for a brief period. Nihal Kappagoda, who was a Rhodes Scholar at Oxford, took over from David Loos as Director of External Resources. He had made an important contribution in developing the mechanism of the foreign exchange budget. He left to join the International Development Research Centre of Canada (IDRC).

Tudor Kulatilake was director of regional development and he left to join the World Bank. All these officials left sometime between 1971 and 1973. A newcomer to the ministry was Dr. M.R.P Salgado, from the IMF and originally from the central bank (he was a brilliant mathematical economist from Cambridge), to be an additional secretary of the ministry. His stay was short, lasting only one year. Ranji Salgado and his wife Surangani are our family friends, and relations.

Dr Ananda Meegama, formerly of the University at Peradeniya, and a distinguished demographer and statistician, came as Director General of Planning and later became an additional secretary. Later Ananda was to hold the office of Director of the UN Statistical Institute for Asia and the Pacific in Tokyo for 10 years. He was one of the influential figures during the latter period of the ministry. Ananda and wife Indrani have been our close friends since that time. Indrani is the author of a superb history of her old school Mahamaya College, Kandy.

Another newcomer was Mervyn (MA) De Silva who had been a former editor of the Dinamina to take over the new function of director of information. Mervyn was great fun and had vast knowledge of the local political and media scene. He was a friend of Esmond Wickremesinghe (father of Ranil Wickremesinghe) and I got to know him through Mervyn. Esmond was to visit us in Geneva many times later on.

One other person with whom I had a cordial relationship in the ministry, was the Deputy Minister, Ratne Deshapriya Senanayaka, Member of Parliament for Minneriya. He had a close political relationship with the Prime Minister, but as a Deputy Minister, there were no dealings with his Minister and Prime Minister. He was not involved with the work of the ministry and he hardly had any meetings with officials of the ministry. Once in a way he met with HAdeS and with me. The Prime Minister did not expect her deputy minister to be active within the ministry. She had asked him at some point to take the message of planning to the people, and he was active in the country at a political level and addressing meetings.

He worked closely with Mervyn de Silva, the director of information. Ratne Deshapriya was a fine man and was a good friend. He once told me that if there are any political problems, I should contact him and he would sort them out. Once after the ECAFE annual sessions in 1974 at the BMICH, there was some displeasure among one or two ministers as to their seating arrangements at the ceremonial opening and they were making some complaints. Ratne Deshapriya told them that the Prime Minister was pleased with the conference and that they should not be critical of some slight they might have felt, which was totally unintended. That ended the matter.

Once the coalition government broke up in 1975, the MYP&EA for the next two years regained its old importance. With Felix Dias Bandaranaiake as the new Minister of Finance, H.A.de.S established a close relationship with him. It was H.A.de.S who mooted the idea of a revaluation of the currency and the Minister of Finance agreed to it. This was politically necessary, as the government had lost its majority in parliament and was finding it difficult to raise domestic rupee resources for its expenditures.

The central bank initially opposed the idea of revaluation. It was more a personal confrontation between the governor and H.A.de.S, rather than a difference on policy. The Prime Minister was receiving contrary advice from the central bank and from the ministries of planning and finance. The Prime Minister called me at home one morning and asked me what I thought about this. I suggested to her that she should call Herbert Tennakoon, the Governor of the Bank to see her privately, and then request him to agree to what the ministries of finance and planning are proposing. That is what she did and the matter was resolved.

Also in 1975, the Minister of Finance amended the Monetary Law Act to include the Secretary of the Planning Ministry on the Monetary Board of the Central Bank, although the Governor of the Bank opposed it.

(Excerpted from Leelananda De Silva’s autobiography, The Long Littleness of Life. A member of the Sri Lanka Administrative Service, from 1960-78, he was Senior Assistant Secretary and Director of Economic Affairs at the Ministry o Planning and Economic Affairs in the 1970s working closely with Prime Minister Sirima Bandaranaike. He thereafter worked for many years as a senior international consultant for several UN and non-UN bodies.)



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Features

The heart-friendly health minister

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Dr. Ramesh Pathirana

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.

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Features

A LOVING TRIBUTE TO JESUIT FR. ALOYSIUS PIERIS ON HIS 90th BIRTHDAY

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Fr. Aloysius Pieris, SJ 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 on Nov. 23, 2019.

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.

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A fairy tale, success or debacle

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Ministers S. Iswaran and Malik Samarawickrama signing the joint statement to launch FTA negotiations. (Picture courtesy IPS)

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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