Features
A Sri Lankan initiative to meet global challenges
By Neville Ladduwahetty
President Ranil Wickremesinghe eloquently outlined the current global economic crisis affecting the developing world, in particular the Global South, during his speech at the Berlin Global Dialogue. In the course of his presentation he conveyed the fact that while the developed countries may have the strength and resources to weather the challenges, the Global South is not equipped to meet them.
Attributing the current crisis as being due to a combination of systemic inadequacies in the global order and geopolitical rivalries among the major powers, he concluded by stating that if another crisis is to be avoided it is imperative that these powers engage in a constructive dialogue. His plea was that: “We require a constructive dialogue between the West and China. We need a constructive dialogue between the US and China. We need a constructive dialogue between the EU and China. Otherwise we will not move forward. So this is the stark reality. It is a question of how we get together and how we work, and who is going to take the lead in 2024” (Observer, October 1, 2023).
CURRENT GLOBAL LANDSCAPE
With regard to the global landscape he stated: “The Global economy has had many shocks in the past two decades. Starting from 2008, we went through the European debt crisis, then the Covid pandemic, the economic shocks that have come from it, the whole issue of funding for Climate Change, and the Sovereign Debt crisis”.
“In all these instances, it is the developing economies and the Global South that have suffered extremely. We are now faced with stubbornly high inflation in advanced countries, oil prices edging towards US$ 100 a barrel, and monetary tightening by global Central Banks”.
“One example is that Sri Lanka’s exports to Europe have not increased at all this year. That is an indication of how we are being affected as we try to recover from the crisis we face. The confluence of factors face serious risks for many developing countries. In the Global South, we are facing rising import costs, food, energy insecurity and the problem of our exports. The resulting Balance of Payment stress translates into a weaker economy for all of us”.
“The difference between the advanced economies and the developing nations is that you all have the buffers and reserves to deal with these chocks. We do not. It is from here that the sovereign debt crisis started” (Ibid).
SYSTEMIC INADDEQUACY to ADDRESS CURRENT CHALLENGES
Commenting on the existing financial architecture the President stated: “The many crises and shocks we have discussed today are interlinked. First, we all agree that the core of the international financial architecture today was designed almost 80 years ago. The world has seen dramatic changes since then with many emerging economies in Asia, Middle East, South America and Africa becoming global economic powerhouses…. The international financial architecture available makes the debt restructuring too complex…. The IMF has no mechanism to face this new situation…” (Ibid).
OPTIONS for DEVELOPING COUNTRIES
In the context of the global situation cited above, what options are open to the developing countries. Can they afford to wait until the existing financial architecture and institutional reforms are implemented in time to meet the impending challenges knowing that such reforms would be spearheaded by the developed countries to further their interests as it is with the existing financial architecture. Since the developed countries would be preoccupied with their own priorities, it is unlikely that the needed reforms would be developed in time to make a difference globally.
Under the circumstances since the developing countries cannot wait until the development of the needed reforms, the challenges are bound to overpower the developing countries which in turn would affect the developed world as well. Therefore, the only option for the developing countries is either to act collectively or individually, to develop the architecture needed to meet the challenges.
Since it is unlikely that the developing countries would engage in a dialogue to develop a collective framework that would enable them to survive the rigors of a potential crisis in time, it is most likely that each of the developing countries would opt to make their individual hard choice. Consequently, the choices made by some of the developing countries would be for non-alignment or hedge their fate with each of the major powers while others would opt to bandwagon, or connect with one of the major powers and become a vassal state. These policies would change with the political formations in the developing states; a tendency that would be induced by the major powers hoping to extend their spheres of influence.
As for Sri Lanka, its stated policy is to be Neutral in order to cope with the pressures arising from the rivalries among the major powers due to Sri Lanka’s strategic location in the Indian Ocean, while maintaining friendly relations with all States in respect of commercial and cultural endeavours.
OPTIONS FOR SRI LANKA
Since no country has been spared the impact of the global economic crisis, some more than others, Sri Lanka has to seriously revisit some of the policies it has been pursuing to revive its economy. One of the key policies to revive the economy is to focus on an export driven economy. In a background where Sri Lanka’s imports exceed exports, and it is hoping to relax import restrictions even further, such a policy depends on the success of not only adding value to imports but also finding markets for the exports. In view of the shrinking global markets such a policy could turn out to be a costly undertaking.
Another stark reality is that Internal expenditure exceeds Revenue. In such a background how realistically possible is it to attract Foreign Direct Investments or Investors? In order to address this deficit, it is reported that the Government hopes to lift the ban on imports in order to increase revenue concerns of the IMF (The Morning, October 3, 2023). Implementing such a policy would mean a drain on Dollar reserves to raise Rupee revenue and in the process tempt further corruption; a charge already associated with Imports. Exploring such options in the current context is unthinkable unless the imports are only for value addition.
On the other hand, and considering the global situation it would be more prudent to focus not on exports, but instead on reducing imports. For instance, exports from India to Sri Lanka in 2022 were around $4.5 Billion whereas exports from Sri Lanka to India was only $850 Million. If the imports from India were to decrease, it is imperative that Sri Lanka focuses on reducing imports which translates into developing Internal Strengths
SELF-RELIANCE as the MEANS to DEVELOP INTERNAL STRENGTHS
Self-Reliance is a civilizational core value of Sri Lanka. The essence of self-reliance is to develop internal strengths through which the dignity of an independent Nation State is restored. Therefore, as a nation all citizens of the Sri Lankan Nation should pledge to respect and honour the dignity, heritage and identity of all Sri Lankans in order to create a stable and peaceful society as a united endeavor. In addition, the three major communities should engage in a comprehensive dialogue committed to explore arrangements that offer greater dignity and respect for all in preference to current arrangements. Such an arrangement would be for all three communities to share power at the Center and participate in governance processes with the Districts under District Development Committee made up of Public Servants, Chairmen of Local Governments and Members of Parliament in the District becoming the peripheral instruments to implement Government policies.
SUGGESTED FIELDS TO BUILD INNER STRENGTH:
The focus of Agriculture and Irrigation should be to produce all agricultural, horticultural, dairy and poultry products including inputs needed to sustain food security within Sri Lanka, and for export. While high yield varieties of paddy together with inorganic fertilizer for reasons of compatibility are needed for food security, indigenous varieties of paddy using organic fertilizer should be cultivated and marketed as health products for local consumption and exported at premium prices to compensate the cultivator for the lower yields. Irrigation Department to restore ancient tanks in preparation of the consequences of Climate Change.
Instead of divesting Small and Medium Enterprises (SMEs), their ownership should remain with the State while Management is offered to the Private Sector with selection being based on the effectiveness of the proposals submitted.
The performance of each SME should be reviewed regularly by the relevant Parliamentary Oversight Committee. Local investors to be provided with incentives for investment in renewable energy. The Government should take steps to double the generation capacity of Victoria Hydro Power Facility. Review the rationale of the logic to transfer water from Randenigala to the North via the Upper Elahera Canal at an enormous cost and implement alternatives suggested in previous articles. Allocate unused land acquired by the Land Reform Commission to restore lost ground cover in order to increase precipitation and control runoff to minimize flooding and landslides.
All Acts of Parliament relating to fishing, exploration and exploitation of marine resources in the Exclusive Economic Zone should be updated to include provisions of the UN Convention of the Law of the Sea in other to maximize benefits from these resources and impose penalties for illegal activities such as bottom trawling in the Exclusive Economic Zone.
Regulation of mines and mineral development to be under the Direct Control and Operation of the Government with the guidance of the Geological Survey and Mines Bureau using resident labour of the area to ensure maximum value addition prior to export. Call for Expressions of Interest to add value to the mineral sands that are being exported.
All projects that could be executed with the capabilities and resources within Sri Lanka to be implemented with locally raised funds arranged by the Developer with the Local Banks and underwritten by the State. Projects that are beyond the technological capabilities of Sri Lanka to be implemented on the basis of Expressions of Interest called for by Sri Lanka on the basis of Domestic Policy priorities.
Encourage and facilitate the development of Indigenous Crafts and Cottage Industries. Government to promote community based cultural activities as part of fostering a common Sri Lankan heritage.
CONCLUSION
In light of the global landscape presented by President Ramil Wichremesinghe at the Berlin Global Dialogue, where the developed countries have the reserves and the resources to meet forthcoming challenges while the developing countries do not, it is imperative that most developing countries explore and prepare themselves how best to face the challenges and survive. What is presented herein is an opinion as to how Sri Lanka could adapt itself to meet the challenges bearing in mind that what is needed is not reform and revitalization of existing outdated formulations and structures that have made Sri Lanka vulnerable to shocks, but a paradigm shift, in thinking because the prevailing political and economic global landscape has no known historical parallel.
For instance, all in Sri Lanka are focused on devolution in the form of the 13th Amendment in full or in a diluted form because of the insistence of India. Consequently, the reaction from most would be to reject any other option. Despite such a response, what is proposed herein instead, is to share powers of governance among the three major communities at the Center. Therefore, the decision that has to be made in particular by the Tamil community is whether their aspiration for “dignity and respect” as referred to by Prime Minister Modi, would be fulfilled by managing one of the nine provinces in an agreed form whether to be associated meaningfully in the governing processes of the whole of Sri Lanka.
When making that choice it should not be forgotten that divesting Central power to the periphery often results in disparities within peripheries and among peripheries as has happened in India and the USA. So long as the choice is made by the Tamil Community in Sri Lanka, it should not matter to India because the Tamil Nadu State would accept the choice made by their kin in Sri Lanka. Since no attempt has thus far been made to explore such an option, President Wickremasinghe should invite the political leadership of both Tamil and Muslim Communities and have a comprehensive dialogue as to how Power Sharing at the Center could be arranged in a form that would be acceptable to all in preference to the 13th Amendment.
These proposals to revive the economy are based on Self-Reliance as the means to develop internal strengths. The most recent living example of developing internal strengths is the building of the East Container Terminal. This project was to be implemented jointly by Japan and a Local Agent. The strong protests by the Unions forced the Government to reverse its decision and award it to be constructed by Sri Lanka Port Authority. The initial phase of this project would be commissioned in 2024. This reflects what can be achieved by having confidence in the abilities of Sri Lanka’s own Peoples backed by the power of the core civilizational value of self-reliance to develop internal strengths. This approach should be initiated to meet current and future global challenges.
Neville Ladduwahetty
October 4, 2023.
Features
Trump’s tariffs, AKD’s gazette and Sri Lanka’s diplomatic slumber
“We are rather respectable in Colombo. We go to bed fairly early, and we remain there till morning. “
According to Sri Lanka’s diplomatic folklore, the late S.W. R. D. Bandaranaike uttered these words while explaining the reasons for Sri Lanka’s abstention on the UN resolution condemning the Soviet invasion of Hungary. Apparently, SWRD’s foreign ministry officials were asleep at home when the diplomatic cable seeking instructions was received from New York. In those days, there were no cell phones, Internet, or even fax or telex machines. The diplomatic cables were sent through post offices. Decoding them was a slow and time-consuming process. Thus, the government could not provide appropriate instructions to our mission in New York in time, and the Sri Lankan delegation abstained on that sensitive UN vote.
Sri Lanka’s Absence from Section 301 Consultations
But then, how does one explain Sri Lanka’s absence from the crucial bilateral consultation held in Washington by the Office of the United States Trade Representative (USTR) during March-April on “Forced Labour” under the Section 301 of the US Trade Act of 1974? Didn’t our foreign and trade ministries send appropriate instructions to Washington in time? Even if the instructions from the foreign ministry were transmitted to our embassy in Washington by pigeon carriers, there was enough time for Sri Lanka to participate in those meetings.
In March, the USTR initiated these 301 investigations on 60 trading partners, and invited all of them for confidential consultations. Out of the 60, 46 participated in these consultations. Sri Lanka was not one of them. Other countries that didn’t participate in these consultations included China, Russia, and Venezuela! In addition to that, the Section 301 Committee conducted a public hearing with interested parties on April 28 and 29. Washington-based diplomats, representatives from few trade ministries as well as representatives from many foreign trade associations and chambers participated in these hearings. Sri Lanka was once again conspicuously absent.
As a result, when the USTR published the proposed forced labour tariffs on June 2nd, Sri Lanka ended up with a 12.5% duty. Pakistani and Indonesian diplomats participated in these consultations and took appropriate follow-up measures, and managed to enter the 10% duty category. As even a threat of a modest tariff hike could disrupt supply chains and reduce competitiveness, particularly in an industry such as garments, I discussed this issue on 15 June and underscored the importance of Sri Lanka’s participation at the next hearing, which was scheduled to be held from July 7th .
Awakening from Diplomatic Slumber and AKD’s Gazette
Fortunately, Sri Lanka finally awoke from weeks of diplomatic slumber, and Ambassador Mahinda Samarasinghe participated in the public hearing on 9 July, and promised, “…. · We have agreed to the text in our negotiations with the USTR on forced labour, …. The gazette as we speak is being printed and I’m getting the gazette tomorrow morning, and the gazette will be shared with USTR as I get it“.
As promised, President Anura Kumara Dissanayake issued a gazette on 10 July banning the imports of goods produced by forced labour. These new regulations are very similar to what Pakistan and Indonesia enacted in April, after their consultations with USTR in March. Why couldn’t we do it in April? Why did we wait till the very last minute?
Challenges ahead
“War is too important to be left to generals alone,” is a famous saying attributed to former French Premier Georges Clemenceau. Similarly, monitoring our main markets is too important to be left to diplomats alone. The United States is the largest single-country market for Sri Lanka. Therefore, Sri Lankan trade chambers and associations should become more proactive in these markets and participate in these events. For example, the chairman of the Pakistani apparel exporters association participated in the April hearings. Similarly, representatives from the Indian Agricultural and Processed Food Products Export Development Authority, the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry, and Reliance Industries also participated in July hearings. At an event where each speaker is given only five minutes (strictly enforced), having a number of speakers from a country is an advantage. The presence of industry representatives in these kinds of events also help them understand the market dynamics and the future challenges. This is important, particularly because there will be many more challenges with Trump’s tariffs.
With the gazette issued on 10 July, Sri Lanka has imposed a prohibition on the importation of goods produced with forced labour. Now, the challenge will be to effectively enforce the prohibition. And what are the goods produced with forced labour? The USTR list only focuses on aluminum, cotton, electronics, lithium-ion batteries, rice, and tobacco. However, according to the U.S. Department of Labour, the list is much longer. Hence, this list may change continuously during the next two years and tariffs may fluctuate once again.
So, this is definitely not the time to slumber.
(The writer, a retired public servant, can be reached at senadhiragomi@gmail.com)
by Gomi Senadhira ✍️
Features
Tales of Mystery and Suspense 10 Casino for Sale
After the overwhelming grotesquerie of J K Rowling’s latest Cormoran Strike novel (written, I should have noted, as the others were, under the pseudonym Robert Galbraith), I thought I should return to the world of fun, and also a much shorter description since this thriller moves quickly without the layers of detail that Rowling engages in.
I then move to the second comic thriller by Caryl Brahms and S J Simon. This, their second story to feature Vladimir Stroganoff and Adam Quill, was Casino for Sale, as lunatic a romp as the first, though without the emphasis on the ballet that characterized A Bullet in the Ballet.
This one begins with the impresario Stroganoff buying a casino cheap from Baron Sam de Rabinovich, only to find that it was a rundown place, not the grand casino of La Bazouche, a resort on the Frenc+h Riviera, as he had initially thought. The grand one belonged to Lord Buttonhooke, and Stroganoff could not compete, until he thought of bringing the Ballet Stroganoff to the casino – which of course leads to Buttonhooke deciding to have ballet performances in his Casino too.
Stroganoff invites Quill to visit him, which Quill decides to do since he has left Scotland Yard, having come into a legacy. No one believes this, and he has to face questions as to what he did to have been sacked, with sympathy for having been found out.
The day he arrives in La Bazouche there is a murder, of a vitriolic critic called Citrolo, in Stroganoff’s office. He had been going to write a damning review of the opening night of the ballet and Stroganoff, when he realizes Citrolo cannot be swayed, drugs him and dictates the review himself to the papers. He leaves Citrolo sleeping and finds him shot the next morning, whereupon he decides to muddy the waters and leave a suicide note and lots of other murder weapons. So much overkill, as it were, of course ensures that he is arrested.
But the excitable French detective who makes the arrest follows up his suggestion that Buttonhooke was also involved, and so the two casino owners find themselves in cells next door to each other, with the detective Gustave quite happy to provide creature comforts for a fee.
Quill decides he must investigate, and finds Gustave most cooperative, since he has a laid back attitude to work. So it is Quill that finds a notebook which makes it clear Citrolo is an accomplished blackmailer, and that there are lots of possible murderers, including Stroganoff’s croupier, who was crooked, Rabinovich, who was now working for Buttonhooke, a confidence trickster called Kurt Kukumber, whose prospectus for a dud gold mine was found in the office and Prince Alexis Artishok who was engaged in a deal to buy diamonds from the ballerina Dyra Dyrakova.
Stroganoff had been trying to get Dyrakova to dance for him, but having done so previously she had refused. But then to Stroganoff’s chagrin she agreed to dance for Buttonhooke. The clearly crooked Artishok had told Buttonhooke’s mistress Sadie Souse, who was not very bright, that Dyrakova possessed diamonds she was willing to sell cheap, and Sadie was determined to have them.
Quill meanwhile finds out that there was a secret passage to Stroganoff’s office, the obvious solution to what had begun as a locked room mystery, and that this was known by almost everyone apart from Stroganoff himself. And then Rabinovich is murdered, just after Gustave had released his two original suspects, leading him to blame Quill for having insisted on that and thus allowing them to kill again.
Soon afterwards Dyrakova arrives, and the town is full of posters announcing that she will appear in the casinos, elaborate posters for either one, since Stroganoff is determined that she will dance for him, and if she does not come willingly, he has devised a scheme to make her do so unwillingly. So, though Buttonhooke has her taken off to his yacht immediately she arrives at the station, Quill along with Arenskaya gets her into a launch and to Stroganoff’s casino, where she performs to tumultuous applause, not knowing for whom she is dancing.
When Quill asked her about the diamonds, she said she had sold them long ago, and that gave Quill the solution to the mystery. Rabinovich had known about this, and Artishok had killed him to prevent Sadie learning it from him, he had killed Citrolo who had recognized him for an accomplished card sharper, not a Russian prince at all. But before he is arrested, he gets away in a boat, and the police launch that pursues him is on the point of catching him up when it runs out of petrol.
Again, lots of excitement, and entertaining references – Gustave grows marrows – and if not quite as brilliant as its predecessor, Casino was certainly a delightful read.
Features
The challenge of being positive about SAARC
It was a few years back that a former President of Sri Lanka took it on himself to pronounce SAARC ‘dead’. Since then there have been other sections of Sri Lankan opinion that have joined the critics of SAARC and taken the solemn stance that SAARC has indeed died what may be called a natural death.
Their fatalism is understandable. SAARC has failed to meet at heads of government or state level for the past several years to take the SAARC process notably forward. Regional cooperation has more or less been only an appealing idea. No substantive concrete projects have taken off to make the idea a hard reality. ‘Inner paralysis’ seems to be SAARC’s lot. Hence the fatalism in these circles.
However, being one of the worst cash-strapped regions of the world and a teemingly populated one with people virtually left to their devices, what choices do the ‘SAARC Eight’ have other than to try their best to band together and continue with their cooperation efforts, however small they may be?
There is no escaping the mounting debt trap for many of these countries and bankrupt Sri Lanka is a glaring example, but ‘throwing in the towel’ and abandoning themselves entirely to the diktats of the strongest economies and their agencies will prove a ‘living death’ for many countries in the SAARC fold.
The gains may be meagre but giving-up on SAARC cooperation in full would prove self-defeating for the organization and South Asia. Right now, the collective intention ought to be to salvage what the region could from the tenuous cooperative efforts. Moreover, such initiatives could go some distance to generate a degree of goodwill among the Eight and help in sustaining a dialogue process.
Given this backdrop it proved ‘a stich in time’ for the Regional Centre for Strategic Studies (RCSS), Colombo, to recently host the SAARC Secretary General Ambassador Md. Golam Sarwar to a round table discussion on the unifying potential of SAARC and its future possibilities, besides other related issue areas.
Held on June 24th and moderated by RCSS Executive Director and former ambassador Ravinatha Aryasinha, the forum brought together a vibrant, wide ranging audience comprising academicians, diplomats, senior public servants, civil society activists and many others. Following the presentation by Ambassador Golam Sarwar titled, ‘Reigniting SAARC: Achievements, Challenges and the Way Ahead’, a lively Q&A followed.
The above forum could be described as an act of lighting the proverbial ‘candle’ rather than ‘cursing the darkness.’ It surely is a ‘darkness’ that could be seen as daunting considering that the region’s pivotal powers, India and Pakistan, are failing to act in a spirit of accord but are engaged in bitter finger-pointing on a number of questions of vital importance to SAARC.
On the other hand, what is the rest of the region doing to bring the above sides together? It is disappointing that to date the rest of SAARC has failed to launch a major diplomatic drive to bring peace between the feuding regional heavyweights. It needs to act without delay and establish its earnestness and this effort would need to prove SAARC’s staying power in the unfolding months and even years.
In assessing SAARC’s seeming failure local opinion in particular has failed to factor in what could be described as weak leadership. Since Sheikh Mujibur Rahman of Bangladesh, the founding father of SAARC, the region has failed to produce a visionary leader who could advance the SAARC cause with charisma and drive.
Among other reasons, weak leadership accounts considerably for the faltering and stuttering status, as it were, of SAARC. Badly needed are leaders who could go the extra mile, think less of narrow national interests and work diligently towards the collective well being of the region but SAARC’s millions of ordinary people have been made to wait in vain for leaders of such stature. Instead, they have been burdened with politicians who seem to be relishing the apparently moribund state of SAARC.
Looking back, it could be said that it was the dynamic leadership factor that led to the launching of the Non-Aligned Movement and for its sustenance for a few decades. True, it could be seen in some quarters that NAM is no more, but as in the case of SAARC, the former too has been unfortunate to be burdened over the years with politicians who lack the vision and drive to unflaggingly advance the fortunes of the South. NAM and SAARC lack the dynamism and vision of leaders of the stature of Jawaharlal Nehru, for example, to give them the required guidance and intellectual depth.
The reasons are complex for there not being among us currently political leaders with the vision and the steadfast commitment to advance the legitimate interests of the South. However, it could be stated with conviction that the majority of Southern leaders have too easily caved in to the demands of the global North and its financial agencies.
These leaders have failed to see, for instance, that the largely market economy oriented Northern governments would not view with favour a centrist economic model that attaches priority to the interests of the dis-empowered publics of the South. This realization ought to have dawned on the current government in Sri Lanka, for instance, some while ago but it has no choice but to abide by IMF dictates since economic survival at present is unthinkable without the latter’s succour.
Accordingly for SAARC this should be the time for some soul-searching. Priority needs to be attached to ending the feuding between India and Pakistan since at present the material fortunes of the region hinge largely on these regional giants giving peaceful relations among them a try. This is no easy challenge to meet but some daring, visionary diplomacy needs to take hold among the rest of SAARC.
There is some sense in SAARC bringing the peoples of the region together through programs that address their best collective interests. A meeting of minds among SAARC nations could enable SAARC and its agencies to build a region-wide people’s movement for progressive political and economic change that could in turn lead to the region’s political leaders sensitizing themselves more to the neglected needs of their publics.
However, the time is ‘now’ for the initiation of these progressive changes and the voice of SAARC well wishers would need to drown out those of their critics.
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