Leading industrialists call for closer scrutiny of ILCEPA
By Gamini Warushamana
[email protected]
Discussions on the India Sri Lanka Comprehensive Economic Partnership
Agreement (ILCEPA) took a new turn after some leading industrialists who
do business with India challenged the agreement as a great threat to the
country and warned that the consequences could be fatal to the country’s
economy.
Ironically, most of the industrialists who were referred to last week
as the main beneficiaries by a key figure in the Sri Lankan negotiation
team Dr. Saman Kelegama, met in Colombo to protest against the ILCEPA.
They told the media that the negotiations were not transparent and the
content of the agreement was a secret.
“The little we know is not encouraging. We know that it is
irreversible, which means once it is entered into there is no way of
getting out”, they said
Chairman, Ceylon Biscuits Ltd, Mineka Wickramasingha said that nobody
in Sri Lanka had requested for this kind of agreement. Why should we
enter into such an agreement with a huge economy like India? Who wanted
such an agreement?
Some pundits have pointed out the benefits but we have to look at the
ground situation. We already have a Free Trade Agreement (FTA) with
India, which was signed hurriedly by politicians and what benefits have
we achieved? he questioned.
He said that after the FTA, the trade balance changed drastically in
favour of India and the Indians were allowed to enter the country
without a visa but the reciprocity was not allowed, he said.
India benefits
Wickramasingha said that the Indian authorities do not respect what
has been agreed upon in the FTA and there is no free trade between the
two countries. Non-Tariff Barriers (NTB), state government regulations
and customs regulations mitigate the free trade to India. There is no
level playing field and only India benefits from these agreements, he
said.
The Managing Director of Multichemi Group Samantha Kumarasinghe said
that officials who were involved in the negotiations had told President
Mahinda Rajapaksa that CEPA is only a simple extension of the FTA.
Kumarasinghe who took part in the CEPA negotiations during 2002-2005
representing the Industrial Development Board (IDB) said that during the
negotiations they proposed to study the benefits of the FTA and revise
it before starting negotiations on CEPA.
He pointed out that the Indian companies do not bring investments or
technology into Sri Lanka but are merely grabbing our resources. For
instance, we sold 30% of our petroleum business to the Indian Oil
Company (IOC) for Rs. 700 million.
Later IOC raised Rs. 1,200 million in Sri Lanka with an IPO. Land and
other infrastructure acquired by IOC is over Rs 1 billion. Today over
20,000 Indians are working in Sri Lanka without work permits.
When we question the adverse impact on the country’s economy, the
officials who took these decisions say that it is not their
responsibility. He said that the officials are Indian agents and they do
not consider the interests of the country.
Great threat
Kumarasinghe who has made investments in India looking for benefits
under the FTA said that the FTA was not practical because India was not
honest in implementing it. He left India after one year.
“However, I have been doing business without any FTA with Bangladesh
where I have factories for over ten years. CEPA is a great threat to the
country and Indian agents have designed it,” he said.
Managing Director of Samson Rajarata Tiles (Pvt) Ltd, Dr. Bandula
Perera said that CEPA was conceived in the Joint Commission Report of
2003. Ken Balendran represented Sri Lanka at the Commission and the
objective of the Commission was to review the NTB effect on the FTA.
However, the Commission came up with CEPA to open the service sector and
investment liberalisation.
Dr. Perera who represented the Board of Investment (BOI) at the CEPA
negotiations said that the Indian negotiation team is strong and did not
change till the end of the negotiations. But we did not have any plan.
After the FTA, Indian investors opened 16 Vanaspathi and 12 copper
factories in Sri Lanka. These industries were primitive and they brought
18th century technology and unskilled labourers to the country.
There were several explosions in these factories and in some
factories even toilet facilities were not provided for the workers.
Therefore, the BOI had to order them to close the factories. When these
exports to India affected their local industries in 2006 India
unilaterally restricted Sri Lankan exports and the industries collapsed.
It was the same with our pepper exports. When people in Kerala
opposed Sri Lankan pepper imports, India unilaterally restricted our
exports. This should not be so in a Free Trade Agreement, he said.
Loopholes
Dr. Perera said that due to the loopholes in our regulations we
failed to mitigate the adverse impact of the FTA. There were radioactive
substances in some imported inputs for the Vanaspathy industries. All
these radioactive substances should have been re-exported but they
didn’t import even a single Kilogram. These aspects have not been
considered in the FTA.
Vice President of the Organisation of Professionals Association (OPA)
Tudor Munasinghe said that there is much pressure from India to sign the
CEPA. He said that Sri Lankan professionals will gain in service sector
liberalisation only if there is a level playing field.
As Sri Lankan professionals have various limitations to exploit the
Indian market, the government should help professionals as Chinese and
South Korean governments helped their professionals to exploit the
Middle East market.
The certification mechanism for Indian professionals to practise in
Sri Lanka is a must. They should comply with our standards. The
agreement has not been published and professionals or industrialists are
not acquainted with the content of the agreement. Therefore, it should
be published and open for public debate, before it is signed, he said.
Ranjith Hettiarachchi of the Samson Group said that there should be a
proper plan before opening the service sector. After identifying the
shortage of professionals in the country work permits should be issued
for a limited time period. There should be a registration procedure to
ensure that professionals maintain our standards.
There are millions of unemployed graduates in India. India attempted
to export these skills to Singapore under the FTA with Singapore but
failed.
The sole objective of India is to export these unemployed people and
therefore we have our reservations over CEPA which may do damage to the
country, he said. Our industrialists said that they are not anti Indian
as all of them already do business with India. |