Features
The SJB unveils its Economic Blueprint
By Uditha Devapriya
Given the scale of the crisis, it’s natural that political parties in Sri Lanka are focusing on the economy. Even if the March elections will theoretically not impact parliamentary numbers, there is bound to be a massive electoral backlash against the current government, which is led by an unelected President on the backing of a party headed by a much-reviled political dynasty. Against such a backdrop, the Opposition, especially the more left-wing and radical sections, is bound to bring about some pressure on the government to shift from its current economic policies. However, whether these tactics succeed will depend on the policies that these outfits parade as alternatives to the current setup.
The Samagi Jana Balavegaya (SJB) is Sri Lanka’s main Opposition party. Its leader, Sajith Premadasa, is the country’s Leader of the Opposition. As such what the party says and what its party MPs say in public, on the business of governance and on economic policy, is rather important. The SJB can be described as an offshoot of the United National Party (UNP), but this would be to overlook the many convulsions, not to mention ideological disagreements, within the party. These divisions have surfaced in recent months, particularly over issues like IMF reforms and financial austerity, with the party’s neoliberal right-wing flank arguing that there is no alternative to them, and its centrist and populist flanks – the latter hosting none less than the party leader – advocating a reassessment of such policies.
Weeks after the JVP-led National People’s Power (NPP) held an Economic Forum at the Galadari, the SJB unveiled what it calls an Economic Blueprint at the Hilton. Titled “Out of the Debt Trap and towards Sustainable, Inclusive Development”, the document, which was part of a wider Economic Summit that saw the participation of diplomats and policymakers, and academics, is self-explanatory: it focuses on the ways and means by which the SJB intends to salvage the economy from the present debt crisis. It focuses on 10 areas: these include not just economic policies like revenue collection, energy and utilities reform, and factor market reform, but also political issues like transparency and accountability. The Summit was basically a roadmap put together by the SJB’s Economic Policy Unit (EPU), led by its economic troika: Harsha de Silva, Eran Wickramaratne, Kabir Hashim.
The Summit began by laying the blame for the current crisis on two things: “leftism” and “popularism.” I am not sure whether they meant to say “populism.” It then went on to laud the economic reforms of the J. R. Jayewardene regime and the reforms proposed by Ranil Wickremesinghe at the 2004 election, implicitly bemoaning the latter’s defeat to populist forces. Speaking at a press conference days after the NPP unveiled its Summit, Kabir Hashim had argued that the JVP, in urging Mahinda Rajapaksa to reverse these policies, contributed to the present debt situation. At the Summit these points were reiterated, defiantly, with Harsha de Silva advocating an IMF-centric solution. Whatever election posturing that SJB MPs indulged in over the last few weeks, including Eran Wickramaratne’s proposal to up the taxable income from Rs 100,000 to Rs 250,000, were forgotten.
The event won praise from those who are broadly supportive of Ranil Wickremesinghe’s economic reforms, even if they do not like Ranil Wickremesinghe. Economic commentators and academics who had earlier castigated the SJB’s populist posturing applauded the EPU on the grounds that a mainstream party had finally given them the solutions they wanted to hear. They had reason to be jubilant. From beginning to end, the Economic Blueprint carries forward the yahapalanist rhetoric of a social market economy and advocates liberalisation, while criticising tax holidays and calling for the restructuring of State-Owned Enterprises and greater flexibility in factor markets. On all these issues the party’s EPU toes a neoliberal line: for instance, it notes that the country’s labour market is notoriously inefficient, in large part because “public sector recruitment is excessive.”
The audience at the Economic Summit, as I wrote above, consisted of those who support the President’s reforms though they oppose the President politically. These are the people who claim that the President has to go, but his policies have to remain, because, to bring up that oft-quoted neoliberal quip, “there is no alternative.” The Economic Blueprint does not, hence, dwell on manufacturing and industrialisation, but instead contents itself on linking Sri Lanka to what it calls Global Production Networks. To its credit, it also dwells on graphite and the importance of securing it as a crucial foreign exchange earner. Indeed, three years ago Harsha de Silva contended that, should the SJB be the party in power, he would “bring in a bill” to protect its supply. Yet such proposals are few and far between, and for the most are consigned to boxes, footnotes, and endnotes.
Talking of footnotes and endnotes, the document makes absolutely no mention of the development paradigms pursued, and put into effect, by Ranasinghe Premadasa: what Dayan Jayatilleka describes as “growth with equity.” It was in Premadasa’s presidency that Sri Lanka embarked on a radical garment factories programme, implementing policies that Communist Vietnam was implementing at the same time. Today Vietnam has gone beyond being a manufacturer for Global Production Networks, and we have lagged. The document does not mention why this was so, but the facts speak for themselves: after Premadasa’s assassination, the government which succeeded him went on liberalising and foreignizing, reversing four years of development and promoting a policy of capitulation to global finance that every government since 1994 have been unreservedly pursuing.
If the SJB has not forgotten the Ranasinghe Premadasa factor, it is only because its leader happens to be Ranasinghe Premadasa’s son. At one point in the Summit the moderator, the ever-eloquent Kusum Wijetilleke, queried Sajith on what his party would do vis-à-vis IMF reforms. Sajith was blunt: he invoked his father, and correctly pointed out that negotiations are a two-way street. This is in stark contrast to those who tout IMF reforms as the only way forward and imply that the present administration, far from enforcing IMF dicta on SOEs and public sector recruitment, is not enforcing them enough. However, though Kusum’s question was posed to clear doubts about the SJB’s contradictory rhetoric on economic reforms, Sajith’s response only reinforced those contradictions: between his “negotiating better” approach and the EPU’s “IMF-centrism”, there is a palpable gap.
The reforms that the SJB’s Economic Blueprint advocates also raises important, thought-provoking questions about the practicality of the SJB’s programme. Against a backdrop of widespread discontent at the present regime’s policies,
how pragmatic would it be for the Opposition to blame the country’s problems on public sector recruitment, and how well received would policies aimed at making the labour market more “flexible” – doublespeak for making workers easier to fire and hire – be? Trade unionisation in this country is centred in the public sector, and unions are important ideological levers as far as the bureaucracy in Sri Lanka is concerned. No party here won power, or stayed in power, by alienating them. Besides, the SJB faces a strong opponent in the JVP-NPP. From a practical perspective, does it make sense to antagonise the latter’s most powerful urban constituency?
The SJB’s response to the JVP-NPP has been to conduct a McCarthyite campaign against their policies on social media. Prominent SJB activists, who were seen as progressive once upon a time, have wholeheartedly joined these efforts: one of them has gone as far as to imply that a vote for the JVP-NPP would be a vote for socialism and thereby a vote for the destruction of the economy. Such logic befuddles me, not least because it begs the question as to how exactly the economy has benefited from decades of divestment, privatisation, and untrammelled capitulation to global finance. The SJB probably knows that it cannot in all good faith answer these questions. Fear is a convenient ploy for a political party when there’s nothing else to resort to. The SLPP lavishly indulged in it against the UNP four years ago: that a section of the SJB is indulging in it speaks volumes about its values.
The tragedy in all this is that the SJB, as the country’s main Opposition, does have an answer to these issues: Ranasinghe Premadasa’s policies. Those policies, as Dayan Jayatilleka pointed out many years ago, need not be the preserve of the Premadasa family or parties associated with them. It can be enforced by anyone, by any outfit.
The Premadasa government was linked to some of the most respectable economic minds of the day, and many of them found a home at the Institute of Policy Studies: an organisation that, once upon a time, concerned itself with industrialisation-led development strategies. These economists and academics included Howard Nicholas, who has never even once been consulted by the SJB’s “Brains Trust.” This is not to say that the Premadasa administration was perfect, because it was not. Yet Jana Saviya, the 200 Garment Factories Programme, the peoplisation of the bus service, and the pragmatic, gradual privatisation of the plantations, all formed part of a wider strategy to combine growth with equity. It is this philosophy that the SJB must imbibe. But perhaps this is asking for too much.
The writer is an international relations analyst, researcher, and columnist who can be reached at udakdev1@gmail.com.
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 . )
US sports envoys to Lanka to champion youth development
Rahuman questions sudden cancellation of leave of CEB employees
