Editorial

Addressing an election rally in Ratnapura earlier this week, President A.K. Dissanayake announced that a ‘Joint Statement’ would be issued as an outcome of the meeting between the Sri Lanka delegation in Washington and the US side to ‘negotiate’ preferential tariffs with the US government and that the talks have yielded ‘positive results’. High expectations on this front were dampened, however, by a subsequent media release from the President’s Media Division (PMD), not a ‘Joint Statement’, which stated that the two sides will ‘continue the discussions with the objective of finalising a bilateral trade agreement between the two countries’.

The Government is at the receiving end of criticism that despite having ample warning, it was thoroughly unprepared for the steep tariffs imposed on Sri Lankan exports to the United States in the global trade war unleashed by the Donald Trump administration. The US is Sri Lanka’s largest export market, and Sri Lanka is among the hardest impacted worldwide by the US tariffs at 44%. Although multiple rounds of discussions are reported to have taken place in various formats in the past months—official committee, action task force, party leaders discussion—the outcome of these and Sri Lanka’s stand are still unknown. What is clear is that the Government’s policy response will have to be in line with the parallel framework of its IMF-supported programme. Global trade policy uncertainties and the unravelling of the predictable rules-based order of the World Trade Organisation (WTO) pose significant risks for Sri Lanka’s trade-dependent recovery programme, especially in the critical area of revenue mobilisation and growth.

It is not to overstate the point to say that the Government’s policy, delivery, and legal framework dealing with trade and investment are in dire need of overhaul. The Department of Commerce, Export Board (EDB) and Investment Board (BOI) had all been previously earmarked for radical restructuring. This year, it was announced that the Export Development Council of Ministers (EDCM) has been revived after 28 years with a vision of achieving US$ 36 billion in export revenue by 2030. The separate office which dealt with overseeing the conclusion and implementation of Free Trade Agreements (FTAs) in line with the objective of trade liberalisation and expansion has now been dismantled with no succeeding entity to handle that vital and specialised task.

This leaves a gap at a critical time when export market diversification is seen as a means to mitigate the adverse impact of the US tariff hike. In the meantime, the Foreign Ministry has announced that economic diplomacy and trade and investment promotion are its primary focus, though no such substantive contribution is visible. Recently it was reported that targets have been issued to foreign missions to increase exports and bring in investors. Minus a supportive platform to implement this, these remain mere rhetoric.

In negotiating the challenges posed by the tariff issue, Sri Lanka needs to manoeuvre not only its bilateral trade policy dimension with the US, but also geo-economic and geopolitical dimensions in the context of global competition between the US and China. These two countries have imposed reciprocal tariffs amounting to a staggering 145% and 125 % on each other. The US has stated that it plans to use negotiations with more than 70 countries to restrict their trade and investment dealings with China and to eventually take a collective approach to decoupling from China. For their part, the Chinese Commerce Ministry has said in a statement that ‘China firmly opposes any party reaching a deal at China’s expense’ and resolved to take countermeasures in a reciprocal manner.

Thus, Sri Lanka needs to carefully manoeuvre its economic survival between the world’s two largest economies while also working within the contours of the IMF’s recovery programme. Again, on the tariffs front, it has also been announced that a GSP+ monitoring mission from the EU (Sri Lanka’s second-largest export destination) will soon be visiting the country.

The Government will surely be aware that it needs to put in place sound policy and a well-coordinated and knowledgeable bureaucratic operational framework to navigate these multiple challenges on the economic and diplomatic fronts.

The unhealthy tale of two cities

Hardly had the dust settled on the Government-sponsored and well-publicised ‘Clean Sri Lanka’ campaign launched not long ago that metropolitan areas of the country’s capital city in particular have been hit by a spate of mosquito-borne viral infections, with residents affected by dengue and chikungunya illnesses.

While Colombo has been overrun by mosquito-borne diseases for which the authorities are clearly unprepared, the country’s second city, Kandy, has been stretched beyond its limits to accommodate the vast numbers of devotees who have been streaming in from all parts of the country to brave days of queuing to venerate the sacred remains of the Buddha—the historic ‘Siri Dalada Wandanawa”. This public exposition of the Sacred Tooth Relic has been organised after 16 years at the request of the President.

Regrettably, what should have been well-coordinated efforts with clear guidance and organisational leadership and prowess based on past experience in both unrelated instances have demonstrated precisely the opposite. In the case of mosquito control and the spread of chikungunya, those responsible, at least in the capital city, are the Health Ministry, the Western Province Governor’s Office, the Colombo Municipal Council (CMC) Medical Office and the Urban Development Authority (UDA)—each living in its own comfort zone with no evidence of coordination among them. In fact, believing that what they don’t see is not happening, they are defending themselves by saying that no complaints have come to them and hospital data doesn’t point to anything amiss in the city.

Furthermore, despite the talk about data-based decision-making and digital public infrastructure, it seems in both instances that the authorities have no clear data or reliable digital monitoring of the scale of what they are dealing with.

The situation in Colombo city has got even more aggravated by the decision not to maintain government bungalows for official use, resulting in their gardens being abandoned to the elements—and mosquitoes (please see page 16 for details).

It is a pity that for a country that has a proud record by world standards of health indicators that it has slipped to such depths.

In Kandy, the Dalada Wandanawa that has been effectively organised for decades has descended into a situation of chaos and filth for the people waiting in the queues. In the wake of ill health and preventable death in both examples, where is the accountability that lies at the heart of what was promised?