27 October, 2020

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Letter To President On Strategic Development Projects

By Chandra Jayaratne

Chandra Jayaratne

Chandra Jayaratne

H.E. Mahinda Rajapaksa,

The President & Hon. Minister of Finance & Planning,

Presidential Secretariat,

Janadhipathi Mawatha,

Colombo 1.

 

Your Excellency,

Strategic Development Projects

This intervention is made in a spirit of democratic engagement in pursuit of transparency and good governance Sri Lanka.

I write with reference to the government policy on identification of viable foreign direct investments (FDI’s) for the promotion of strategic development projects in Sri Lanka and the Cabinet’s rationale and basis for assessing the viability of such projects for the grant of tax benefits and concessions, in terms of the Strategic Development Projects Act No.14 of 2008.

Current economic models advocate the importance of a more holistic approach to FDI. It is believed that sustainable FDI can only be achieved through projects that yield profits sufficient to maintain effective corporate engagement without harming vital host country interests while producing positive net benefits for the country’s long-term development goals, all as evaluated on prioritized economic, environmental, social and governance indicators. In this context, it is considered vital to identify an effective approach to attract prospective investors and to assess a suitable methodology for seeking sustainable FDI to maximize the benefits and minimize the costs to the host country.

Additionally, it is also considered essential to ensure broad participation and transparency in selecting national and regional development priorities to evaluate an FDI which is in keeping with the government’s inclusive approach to development.

In context of the above parameters for the evaluation of FDI, it would be incumbent upon the government to provide the public with the rationale and basis for evaluation of the proposed FDI funded ‘mixed development project to set up an operate an Integrated Resort’ and a locally funded ‘ICONIC integrated resort’ referred to in the government gazettes No; 1829/24 and 1829/23 of 23rd September 2013(now withdrawn), both of which include the approval for operation of Casinos. They are identified as strategic development projects justified on the grounds of earning foreign exchange through tourism promotion.

Although casinos are operated in many countries such as Australia, Singapore, Malaysia, and China, they are strictly regulated and monitored to minimize negative social effects while maximizing economic benefits. The Government of Sri Lanka must consider adopting similar rules and best practices, regulations and monitoring mechanisms for the control of and compliance by the operating casinos in Sri Lanka.

The Sri Lankan public seeks government assurance that the harmful social effects of such enterprises will be minimized by effective regulation, control and compliance mechanisms, while maximizing the sustainable long term economic benefits.

In responding to public concerns,  I appeal to you to ensure that prior to the announced re-gazetting of Orders under sub section  (4) section 3 of the Strategic Development Projects Act, No. 14 of 2008, that the under noted information and clarifications be transparently placed before the public;

  • The justification and rationale supporting the approval by the Cabinet of the covered projects, classified as “Strategic Development Projects in the national interest  and which is likely to bring economic and social benefits to the Country and which is likely to change the landscape of the country, primarily through

Strategic importance to the goods and services of benefit to the public;

Substantial inflow of foreign exchange to the country;

Substantial employment generation ;

Enhancement of income earning opportunities;

Transformation in terms of technology.

  • What steps the Cabinet proposes  to adopt in re- gazetting these projects, in view of the    conflict in laws with the provisions of the Casino Business Regulation Act No 17 of 2010, which specifies that ” No person shall, from and after January 1, 2012 engage in the business of operating a Casino

1.      other than under the authority of a valid license issued in that behalf by the Minister, and

2.      within a specific area to be designated by the Minister”

  • The details of the regulatory framework under which these casino and gaming centres will be allowed to operate specifying inter alia ;

a)      the restrictions, if any, to be placed on the participation of Sri Lankan citizens, especially vulnerable persons, in gaming activities,

b)      Control and compliance mechanisms in place to ensure that the revenue from gaming activities of the casinos are settled in Sri Lanka in full and are channeled via authorized and duly supervised foreign currency dealers registered in Sri Lanka

c)      Measures in place to minimize illegal and economically and socially harmful activities such as:

o   black money and money laundering

o   underworld and mafia operations

o   prostitution and related vices

o   illicit trading in narcotics, drugs, liquor and cigarettes

I further appeal that transparent demonstration and due consideration be given, during project negotiations leading to the re-gazetting, in ensuring the following;

a) optimizing state revenue, including applicable levies, taxation, other charges and entry costs comparable to setting up similar operations in other comparable countries,

b) assessing and optimizing the national socio-economic benefits, net of any revenue lost on account of the waiver of competitive entry costs, tax exemptions and negative social costs,

c) assessing and optimizing the national foreign exchange benefits

c) In pursuit of (a) to (c) above place before the Parliament and the public, computations of long term net national economic benefits and long term net foreign exchange benefits.

I appeal to your Excellency one again, to take full account of public opinion and the concerns expressed herein, in proceeding with the re-gazetting above projects. In that context, I trust that careful consideration will be given to the need to ensure maximum transparency and full disclosure and further ensure that accountability mechanisms will be set up and in place before re-gazetting in order to effectively address the key economic and social issues highlighted in this appeal.

Yours sincerely,

Chandra Jayaratne

cc. Hon Minister of Investment Promotion,

Hon Minister of Economic Development,

Hon Deputy Minister of Finance & Planning,

Secretary to the President,

Secretary Ministry of Finance & Planning

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Latest comments

  • 0
    0

    Excellent letter from Chandra Jayaratne. The President must take such public interest communications seriously, as there is much to learn of the consequences of investments which the government calls ‘strategic’.

    The social cost of such investments as enumerated by the writer, in this instance due to the proposed operation of two gambling casinos, may be somewhat overplayed. Mafia crime, proliferation of narcotics, prostitution, etc are already serious issues without casinos. The underlying causes must be searched for elsewhere if we are to overcome such ills. In fact I venture to say that there is greater harm from tourism per se. The answer to all this may lie in identifying the social implications of any investment at the outset itself, along with dedicated investment toward a planned programme to mitigate such ill effects.

  • 0
    0

    Mr. Chandra Jayaratna,

    You are wasting your valuable time writing to this uneducated Madamulana thug. As I remember you have written several open letters and he may have kept yours and many other letters in the same “Hamas Pettiya” where he use to keep all reports from the various commissions appointed by himself in the past 8 years.

    If he listen to experts in the relevant field he never would have started Mattala Mahinda Rajapaksha International Air port, Magampura Mahinda Rajapaksha International Port and other various projects as they are utter waste of public fund and becomes white elephants. It seems that return on investment will never get in our life time.

    He is doing everything to build up a kingdom at the cost of our foolish gen. public and therefore writing to this Madamulana uneducated thug is a waste of time.

  • 0
    0

    I propose to move the casinos to Hambanthota.

    With Hambanthota economy bustling after port, airport there, a Casino in Hambanthota would be ideal to further development Hambanthota.

    • 0
      0

      How about red light areas also in bustling Hambantota?

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