29 October, 2020

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Good Governance Necessary To Achieve Government’s Economic Vision 

By Jehan Perera

Jehan Perera

Jehan Perera

The re-opening of the EU fisheries market to Sri Lankan exporters came as a welcome success to the government at a time when it needs to show some tangible progress on the economic front to the people. The main criticism of the government amongst the general population is the absence of economic development and poverty alleviation in their lives. While a relatively small fraction of the population travels in luxury private cars, the general public continues to hang on to the footboards of overcrowded trains for their daily commutes to their workplaces and back with some of the train engines and carriages well past their fortieth year in service. Even those sections of the population who voted for the government at the last two national elections that saw the defeat of the old one are bemoaning the lack of economic progress in the present.

The government leaders spell out a vision of Sri Lanka as an economic hub of the region, but there is a disconnect as the general population’s experience of hubs related to the economy are the village and town markets which is what they are familiar with. The rising cost of living and absence of visible development, and job creation, are the chief observations they have to make about the economy. In this context the lifting of the fisheries ban by the EU which was imposed on the country over a year ago, will indeed imrprove the livelihoods of several thousands of fisher families and those who are at the bottom of the economic pyramid and help to improve the economy in general. The ban was imposed due to the failure of the previous government to comply with international standards and adequate control systems to tackle the problem of illegal fishing.

The lifting of the EU ban was primarily due to the government’s willingness to comply with international standards in the fisheries industry. These were of a technical nature, such as the EU’s observation that highlighted that Sri Lanka was authorizing very large vessels to fish in the Indian Ocean without marine GPS (VMS), rendering control totally impossible. But there was also a political dimension as the previous government preferred to take the risk of losing market by being unprepared to take the necessary actions to meet the EU requirements. The previous government resisted any sort of international pressure as being an affront to Sri Lanka’s national sovereignty. However, the new government has demonstrated that political dialogue and reforms can have beneficial economic consequences to the country’s people.

GSP Conditions 

The government is now moving to obtain the restoration of the GSP Plus concession from the EU. This tariff concession was withdrawn in 2010 on account of the previous government’s inability and unwillingness to show that it was complying with the international human rights agreements that successive Sri Lankan governments had entered into with the UN and other international bodies in earlier periods. The EU is the largest export market and the second largest import source for Sri Lanka, and in 2008, textiles and garments accounted for the bulk of exports from Sri Lanka. The national economy gained about US$ 150 million annually due to preferential tariffs.

In 2010 however, Sri Lanka’s exports suffered a blow when the GSP Plus was suspended due to the Sri Lankan government’s violation of human rights agreements. Many of the smaller factories had to close and thousands of workers lost their jobs. Studies showed that Sri Lanka’s total exports fell 9 percent in 2012 due to the loss. Sri Lanka also lost its share of the market in other products also with consequences to the balance of trade deficit. Executive Director of the Institute of Policy Studies (IPS) Dr. Saman Kelegama has said “Sri Lanka has already lost its competitive edge in the EU market for the past five years. Not necessarily on apparel but the other exports like foodstuff, rubber, gems and jewellery.” These losses have made it harder for the national economy to provide as much as it could have to the poorer sections of the population. Regaining the GSP Plus benefits can therefore contribute significantly to the national economy.

It is reported that the EU has imposed 58 conditions for Sri Lanka to regain the GSP Plus, and among these are to revoke the Prevention of Terrorism Act, to expedite cases of remaining detainees, to introduce a new Human Rights Action Plan, review the status of the Tamil diaspora organisations and individuals on the terrorist list, to devolve power under the new Constitution, return all private lands to owners in the North, adopt a policy of National Reconciliation and on National Resettlement, finalise the re-settlement of all displaced persons, and to ratify the Convention on Enforced Disappearances with accompanying legislation as well as issue certificates of absence. For its part, the government is reported to have committed to many reforms such as to rehabilitate all ex-combatants by 2017 and to expedite the processing of remaining cases referred to by the UN Working Group on Enforced or Involuntary Disappearances; and to establish an office on Missing Persons.

Additional Benefits

The Government has also agreed to “security sector reform”; to put an end to “all surveillance, harassment and reprisals against civil society, human rights defenders and journalists”; propose legislation allowing individuals to submit complaints to the UN Human Rights Committee under the First Optional Protocol to the ICCPR and to the UN Committee against Torture; and to “reconsider the decision to establish the Press Council”. The list also includes an undertaking to propose legislative changes to expedite prosecution of reported cases of torture; to launch wide public consultation and to disseminate information during the various stages of setting up a transitional justice mechanism; and to design a transitional justice architecture consistent with the Human Rights Council resolution and the results of the public consultation.

The value of regaining the GSP Plus is not limited to the economic benefits that will flow directly through reduced tariff rates for Sri Lankan exports to the EU markets. It can also lead to an increase in the level of foreign investments. So far the level of foreign investment in the country has been disappointingly low. It is likely to increase in the longer term once the good governance measures are put into place. Foreign investors need to know that their investments will be secure and they will have the benefit of an independent judiciary in case of disputes. They need to know, just as much as those who voted for this government want to know, that there will be transparency in business transactions and underhand deals which are illegal in many of their countries will be minimized. They also want to be assured that there will be no political violence and rebellions that will create an inhospitable environment for business.

A stable political environment is of utmost importance to attract foreign investment that can develop the economy. The good governance measures that the government is being obliged to put into place will create a stronger system of checks and balances, transparency and rule of law, which is important for enduring peace in the country. The sense that the system of government is just and equitable is the best form of national security in regard to internal insurgencies, such as occurred in Sri Lanka both in the North and South over the past four decades. Therefore the reforms that need to be undertaken to obtain GSP Plus will have longer term benefits that can take Sri Lanka to the status of an economic hub for the South Asian region which is the vision of this government.

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Latest comments

  • 2
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    Whilst the heart of this government is in the right place its proposed economic reforms are anything but good for the progress of the country.

    The trouble with this government is NOT that it isn’t doing enough, but rather that it is doing TOO MUCH!

    The answer to the question: How to run an economy, is that it CANNOT BE RUN AT ALL. It must rather be left alone so that collectively as a market it can work out what must be done to better itself and improve itself.

    This was amply demonstrated by the American economy of old, in which that country had an economy where the government did VERY LITTLE, and where every man was free to develop and progress as he saw fit whilst being subject to his very unique circumstances.

    This was why America is even now called the ‘Land of the Free’. It is not because its people received FREE STUFF, but rather because the people were free to do as they wished – the proviso being that no person can intrude on the freedoms of another.

    These principles are beautifully explained in Frederic Bastiat’s 1850 essay ‘The Law’ (freely available to read in translation on the internet). These principles are expounded in the modern day American politics as Libertarianism and in economics as Austrian Free Market Economics. Look them up. Listen to people like Ron Paul, Tom Woods and Lew Rockwell and learn something new about the world.

    For Sri Lanka to prosper this arrogant and ill conceived idea of ‘megapolis’ must be done away with immediately. We don’t NEED a megapolis, and we don’t NEED a government to shove, by force and violence, what IT THINKS is best down our throats. How can any government apply a one-size fits all to the 20 million people of Sri Lanka?

    What we NEED is a government that LEAVES US ALONE so that we can pursue our individual and absolutely UNIQUE destinies. We need the government to reduce taxes. We need the government to shrink in size. We need it stop shoving down our throat forcibly its versions of ‘Education’ and ‘Healthcare’ and let US DECIDE what is useful for our UNIQUE circumstances.

    But foremost, what we NEED is a government that UPHOLDS JUSTICE indiscriminately and upholds laws that act only to preserve life, liberty and the properties of individuals (Bastiat’s natural laws), and do nothing more than this.

    • 1
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      This is not for Sri Lankan mentality, which requires a change to accept
      21st century democracy in the 1st place.

  • 2
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    It is never possible in SL

  • 0
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    [Edited out]

    • 1
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      patriot the pathetic

      “[Edited out]”

      Thanks for keeping it brief.

  • 2
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    Mahinda Rajapaske took the correct attitude with GSP+. Ask for it once. If not given move on to better things without grovelling over it.

    The facility will not last long anyway since the country has increased income levels.

    The people are used an economy growing at 8% + GDP. Its now halved.

    The economy is not performing. There are many factors. There was a certain amount of re-structuring going on so a slow down was expected. Although the public will not have the patience.

    I suspect there is a large psychological factor that prevents people from engaging in economic activity. The morale is down.

    Gota did a lot of good visible work. He should join and develop the suburbs in some capacity.

    • 1
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      If Gota is to make a come-back, he must be released by the PREFIAC
      and this will take a long, long time – say 10 yrs.

    • 1
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      You don’t seem to understand their condom theory.

  • 0
    0

    When will our humbug Ministers learn the theory of marketing?

  • 0
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    Blaming past government for fisheries export is no avail. The Old King was struggling to have the Nuraicholai repaired even by India. The Defense Department Media Centeral computer went out. Another 50 followed the suit. He had nothing in his hand. Sinhala Modayas wanted him to destroy Tamils. He delivered them that. He received the reward for it from the Dragon; he shared it to Sinhala Modayas. He gave the Dragon the Port City if that will spend some time with it and leave the life of his country’s people alone. But the Dragon demanded the sea too. He had to allow the sea to be plundered. He had no control and nothing can be controlled when the Dragon is out for it. Even Yahapalanaya Goverment promised to have released the Port City but ended up giving the Hambantota too. The funny thing is, when the Fisheries export reinstated, the Yahapalanaya Goverment bragged a lot and put forward lot of hope of having the GSP+ returned. But the truth is much more smelly than the rotten fishes that was rejected by EU, earlier.

    Chinese vessels were imposed some controls. Carrying GPS on the deck to trace them and carrying sonar under hull to spy the indian Ocean have been not an easy task for them. They complained to the Dragon. The Interest & fine on the Port City alone, $150 million, that is almost what Lankawe reaped as an additional reward out of having the GSP+. So what is the benefit? what about the additional Land handed over in Hambantota? Old King was better to Lankawe as he had resisted handing over the Hambantota just to get some benefits in fisheries export. Further this is in line with protecting the sovereignty of the country, it is an argument Jehan has mentioned, but not from the West unlike he said, it is from the Dragon.

    Udaya Gammanpila has said the Lankawe was and will be better off without GSP+. But as a non communist within the ultra Communist clan, he stopped short of rejecting the American GSP+ and get off from American pressure too. He is the only one accepts the American relationship out of the Joint Outlaws, or commonly known as JO.

    Further blaming the past government to failure of GSP+ also no avail. Past government had given up on that. As Udaya Gammanpila pointed out, this too was a promise in the election by the Yapanaya government. It said it will have the GSP+ restored. Now Jehan is blaming the past Goverment because he had given up on them, at least for temporarily, when they are out of power. So the statement released by the EU is the answer for the Yahapalanaya Government’s new request. Yahapalanaya Goverment has been very active to prepare many thing to be presented at the June Oral Report Presentation of Lankawe. Thought it is not going to be the one the Sinhala Cinema Supporting actress presented with GL, Dougee, Hakeem, Rishard….gang in like 2012, 2013…. It is a serious contest about Paranagama Commission’s CID threats to the missing person relative witnesses, The English meaning of the words Foreign and commonwealth, the time constraint of March 2017 …….So they wanted the GSP+ resolved before their Masterpiece, called “Lies Agreed Upon – Yahapalanaya Edition” is released in June 2016. EU did not understand the urgency. They just believes that Yahapalanaya Goverment is continuing all the material humiliation and torturing against Tamil, but only with a white washing on the tip of the iceberg. They want real change. For example, Gobi’s wife was humiliated, forced to abort and kept in hospital the same way the Tamil Girls joined the army in the previous government, not allowing anybody see them. In the Gobi II case some of his personal information was purposely leaked to media to incriminate him in the minds of the people, with the Suicide Jacket. He was portrayed as a womaniser, while army had the track of his previous marriage. Further it is suspected they have been using him to transport Drug smuggling they do. He is under the army parole after rehabilitation. They used the current wife to frame his case. This case once again connects to the previous marriage. Now the Army is forcefully keeping his current wife in hospital that nobody can see her. The amazing thing here is she is the one tipped army by the army’s statements. Because of his womanizing habits she wanted a divorce that is why she did it as per army. Now the army is preventing her relatives seeing her in the hospital. Putting all these inhuman murderous behaviours in to the kitchen curry Chatties and closing them, Yahapalanaya government was struggling to get the GSP+ reinstated by EU before the June 2016. Thank God, Yahapalanaya government is not very success in that scheme. It seems EU have said the improvements are important. But, as usual, Yahapalanaya government is rejecting that EU has not put any conditions to reinstate it. In the meantime, Udaya Gammanpila is very happy that they messed up the Port City and EU’s GSP+ in a way the Yahapalanaya government could not easily unknot it, though lost a little bit on fisheries export.

  • 1
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    The GSP is just a reward by Europe for steering away from China. That is all the Srisena-Ranil government managed to do. The west is not impressed with any other “reforms”. The UN still points out about ongoing torture, kidnapping and army atrocities in the North. Still private lands are being grabbed by the armed forces.
    No signs of “reconciliation”. Mangala’s attempts to dupe the US and the west by false promises are now well exposed to the International community. How long can “Yahapalanaya” hoodwink the west, will be soon clear.

  • 2
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    This [Edited out] who flirted with the MR administration is now sucking up to the Maithri-Ranil combine. T[Edited out] That is to make sure hat the separatist tamils will achieve their objective of Eelam, by name or otherwise in the not so distant future.[Edited out]

    • 2
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      Surendra Perera

      “That is to make sure hat the separatist tamils will achieve their objective of Eelam, by name or otherwise in the not so distant future.”

      How?

      Even if they achieve their Eelam, should it bother you?

      The rest of the people could have their Sinhala Eelam.

  • 1
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    What is Good Governance??
    Where can one find it or see it happening?

    Good Governance is an illusion created by Harvard like that good for nothing jehan perera who sings for his supper instead of finding a worthwhile employment in keeping with his qualifications.

    Wonder whether JP can find a job of pushing a natami cart in the pettah. .

  • 0
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    Good governance start from Universities. It is hell of corruption now fake professor appointment to money robbing, etc.

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