If Sri Lanka’s unemployment is 400,000, why create jobs for 1 million? ETCA discussion panel asked
View(s):The discussion organised by the Sri Lanka Association for Political Economy (SLAPE) at the Colombo University was on the draft national trade agreement which has been circulated to many stakeholders, barring the media, for comment.
This first-ever discussion on the proposed national trade policy began with Ravi Ratnayake, a former UN expert on trade and currently advisor to the Agency for International Trade (AIT), listing out the policy and its key points, setting the stage for what would turn out to be a somewhat heated discussion, from the side of the participants.
Dr. Ratnayake, who was involved in drafting the policy, said the trade policy will set out guidelines and ensure transparency. “I have heard this often from the business community – that there is no predictable and consistent policies today. So in this context a framework is useful.”
Referring to Sri Lanka’s weak export growth, he said in the period from 1990 to now Sri Lanka’s exports grew to US$12 billion from $1 billion in 1990 whereas Vietnam had recorded over $100 billion in the same period from the same base of $1 billion while Bangladesh exports which was much lower in 1990 is now at $33 billion. The reason for this was the lack of a proper trade policy for exports as the engine of growth.
Trade failed because of a reversal of policies during the past 15 years, political instability from three decades of war, inward orientation and inadequate attention to export expansion and market access constraints in the US and Europe against Sri Lanka, he added.
He said the national trade policy of Sri Lanka is to have, on the long term, inclusive and sustainable growth with the medium term objective being the creation of 1 million jobs.
The AIT advisor’s contentions were rejected by industrialist Samantha Kumarasinghe, Chairman of Nature’s Secrets and a vocal opponent of the earlier abandoned Comprehensive Economic Partnership Agreement (CEPA), a step forward from the Indo-Lanka Free Trade Agreement (FTA). CEPA negotiations were abandoned by the Mahinda Rajapaksa regime following widespread protests by industrialists including Kumarasinghe on the same issues – possible flood of Indian unskilled and semi-skilled workers like carpenters and barbers.
He urged Dr. Ratnayake to maintain his independence as a trade specialist since he was working with people who had also misled the earlier government and was doing the same with the present regime.
Mr. Kumarasinghe said he has a business in Bangladesh in addition to his Sri Lanka operation. “Bangladesh has resources which we don’t have. They have enough workers which we don’t have,” he said adding that while the Prime Minister talks of 1 million jobs, official statistics show that just 400,000 are unemployed.
He said it is unfair to give comparisons with other countries when Sri Lanka was fighting a war while other countries (Vietnam) were growing.
“We have given all trading opportunities to foreigners. Prima from Singapore was given a licence to mill wheat but after nearly two decades, the previous government gave Prima the right to get into the retail trade,” he said adding that trading should be retained by Sri Lankans.
“We have been milling rice for 2000 years or more. Do we need foreigners to mill wheat? I invest in other countries and bring back money. Likewise foreigners take money out. Take the cable industry. An Indian company can come and sell products (cheaply) which could result in Kelani Cables and ACL going bankrupt.”
He said it’s difficult to find people to work here. “Even if we put an advertisement we can’t find people. In Dhaka its hire and fire: If 100 workers leave there are 500 waiting outside to join,” he said adding that he opened an cosmetics factory in Dhaka when the cost of alcohol (spirits for cosmetics) in Sri Lanka rose to six times of the global market price.
File picture of protests in 2010 against the proposed Comprehensive Economic Partnership Agreement (CEPA) which then President Mahinda Rajapaksa decided to abandon in the face of opposition. ETCA is said to be an improvement over CEPA with trade and technology-transfer as the focus.
Anushka Wijesinha, chief economist at the Ceylon Chamber of Commerce, said that while the need for a trade policy is good there was much overemphasis and dominance of PTAs (preferential trade agreements) in this policy pointing out that there are other newer developments which need to be taken into account.
Many industrialists face constraints in regulatory issues because of archaic rules like the over 100-year-old Customs law which is being enforced for an economy in 2016.
Also missing was e-commerce and a policy framework with high tech SMEs set to grow with many start-ups showing success. “Do we need a national trade policy? Even the private sector is wondering why there is a need for such a policy,” he said adding that in his view more important is a “strategy for implementation”.
During question time, industrialist Kulatunga Rajapaksa from the DSI group, also re-iterated that foreigners should not be allowed in retail trade.
“There is no transfer of technology or learning from foreign experts in the retail trade. Here even petrol sheds are run by foreigners. Today’s scenario is that foreigners are not involved in manufacture or selling in the wholesale market. Instead they are also importing and selling in retail trade,” he noted.
Nalaka Jayaweera, an architect and a proponent of the need for a regulatory framework in such trade agreements, said that there are many issues with this draft trade policy. “I don’t like to accept this as a national trade policy (because it has been badly done). It is just a document prepared by a few people, it’s not even a professional job with many repetitive paragraphs,” he added while pointing out that it should have referred to past trade agreements in Sri Lanka and abroad, studied and analysed these.
| ETCA drafting committee meets professionals | |
| Discussions between a committee tasked with the proposed Economic and Technology Cooperation Agreement (ETCA) and professional bodies to discuss listing possible professions for liberalisation ended inconclusively on Wednesday, informed sources said. The government team was led by Dr. Saman Kelegama, Chairman-designate of the Agency for International Trade and included K.J. Weerasinghe and Dr. Ravi Ratnayake, both advisors to the new agency. Representing the professionals were officials from CA Sri Lanka, Sri Lanka Institute of Architects and Institution of Engineers among others. The sources said that when government negotiators urged professionals to come up with a list of professions that should be liberalised, there was opposition and many issues and queries raised with no clear responses. The meeting was then put off for next week.In the meantime, there has been a kind of split in the United Professionals Movements (UPM), an offshoot of the Organisation of Professionals Organisation (OPA), which was the main voice representing professionals in the discussions with the government on the ETCA. After the UPM walked out of a meeting in July with the government negotiating committee, there hasn’t been any proper discussions with the ETCA committee, the sources said adding that trade unions in the UPM – a section of the IT industry and the Government Medical Officers Association – held a meeting earlier this week to discuss a separate initiative. |