14 November, 2018

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Sri Lanka Should Tap Global Unbundling Opportunities Of Services Under ETCA 

By W.A Wijewardena

Dr. W.A Wijewardena

Dr. W.A Wijewardena

Management of Economic Policy – Part III

The need for wide public consultation when trade agreements are signed

The first article in this series warned against the secrecy surrounding the Economic and Technology Cooperation Agreement, now known as ETCA, which the Government says that it would enter into with India shortly.

The article noted that all those who are concerned about ETCA – both supporters and opponents – have been kept in the dark as to what it constitutes and what benefits it would bring to the country. Darkness breeds fear and fear leads to suspicion. That suspicion has caused the country’s professionals, now loosely formed into a United Professionals’ Movement or UPM, to launch a massive protest campaign against ETCA.

The fear harboured by these protesting professionals has been, the article noted, that if ETCA is implemented, there would be a massive inflow of Indian professionals to Sri Lanka displacing the country’s professionals from their jobs. Such fears need be allayed through full disclosure of facts about ETCA.

Since no economic policy could be implemented with protesting professionals all around, the article concluded that the Government should break its information-silence in the name of good economic policy governance and generate wide consultation among all parties.

ETCA is not CEPA, but fears should be allayed

The second article in the series dealt with the long-drawn process involved in finalising bilateral trade agreements between countries.

The article noted that ETCA was not CEPA since it has been proposed, as the latest draft reveals, to exclude the provisions relating to the ‘migration of natural persons’. Thus, there is no free entry of Indian professionals to Sri Lanka’s job market through ETCA, though they still could provide services to Sri Lanka without crossing the borders under normal conditions.

Hence, it stressed that the objections to ETCA were still premature on the ground that it would lead Indian professionals to flood the Sri Lanka’s job markets. However, it highlighted the need for developing a mechanism to generate effective consultation with all the stakeholders in order to allay the fears which the professionals have harboured among themselves. It, therefore, suggested that the government run an interactive web – known as 2.0 webs – or use popular social media to explain its position and get feedbacks from the critics.

It warned against resorting to bring people to the street, as announced by the Government, to fight with the rebellious professional groups since it would simply lead to an escalation of unproductive street protests by both sides.

Benefits of opening the services sector need be examined

Today’s article analyses the criticisms for and against opening the services sector in Sri Lanka for preferential trade with India and the validity of fears expressed by a section of professionals that such an opening would pave the way for Indian professionals to flood Sri Lanka’s limited job markets especially in the ICT and engineering sectors.

Along with development, the services sector too expands

Economic history of countries which have transformed themselves from poor to rich has shown one unique development. That is, the share of wealth created by traditional agriculture and manufacturing has declined along with economic prosperity, while that of services has increased.

This trend has been predominantly observable in developed countries. For instance, in the UK, in 1960, services accounted for 53% of GDP. But in 2014, it has increased to 78%. In USA, the two comparable figures were 58% and 78% and in Japan, 42% and 72%. In the case of India, it has increased from 30% in 1960 to 52% in 2014.

A dramatic change has recorded in the case of Sri Lanka where services sector’s contribution to GDP has increased from 48% in 1960 to 62% in 2014. However, a country which has lagged behind has been China. In its case, services sector contributed only a puny 20% to GDP in 1960. Even as late as 2014, the comparable share was just 48%, pretty much below its independent territory, Hong Kong, which had a share of 93%.

Unfair criticism against services

The triumph of the services over the hardcore agriculture and manufacturing that produce a visible good in this manner has led many to question the wisdom of promoting services over agriculture and manufacturing as a sustainable economic strategy.

The argument presented by them is simple: agriculture and industry produce a real good which people can enjoy by consuming; services do not produce such a ‘final consumption good’, but only facilitate the consumption of real goods. Hence, services derive their income out of visible goods and if services grow overly, they become a burden to both the producers and consumers of visible goods.

This criticism is levelled against only one aspect of services such as when they function as middlemen as in the case of trade and commerce. There again, without the service of the hated middleman, both producers and consumers have to reach each other at great costs and inconveniences.

But many services such as healthcare, education, banking, shipping, transport, telecommunication etc, produce a ‘final consumption good’ and without them, the life of people will simply become less joyful. Hence, services are also an integral part of human consumption and, therefore, when income increases, the demand for such services too grows.

Services have to be produced in larger volumes within the economy for use by people inside as well as for sale to those outside the economy who are willing to pay for them. Hence, international trade in services has become an integral part of the global economy today. Thus, countries that sell their services to the rest of the world enjoy a higher welfare and prosperity as the countries that sell their visible goods in the form of exports to other countries.

Services are essential for visible goods too

Services are also important for economies that produce visible goods for use by their own citizens as well as by those outside. This could be easily gauged by breaking a manufactured product into its different stages as given in the table.TB

Nine out of ten stages of a visible product constitute services

A manufactured product first starts as an ‘idea’ in the mind of a visionary called fundamental or basic research. Sir Arthur C. Clarke’s visionary prediction in 1946 that a satellite shot into the orbit can function as an antenna receiving and transmitting radio signals is such an idea.

These basic ideas are then carried forward by scientists and engineers through what is known as ‘applied research’. Once such applied research produces a visible product, it is tested for reliability and allowed to go through an incubation period. Then, it is commercially developed, financing arranged and manufactured in a factory that comes into being through an entrepreneurial arrangement.

It then requires working capital financing, warehousing, marketing, distributing, and making available to final consumers through sales. Once it is sold, the consumers have to be looked after through ‘after-sale services’ for maintenance and trouble-shooting.

Since a particular manufactured product can become obsolete pretty soon, it is necessary to engage in research and development for producing the next generation products. Every manufactured product has to go through these different stages and, of them, all represent services except the actual manufacturing of the product in a factory arrangement.

Though services are discounted by anti-services groups, they are essential components of producing visible goods. In today’s globalised economy, fast and rapid transportation, advancements in information and communication technology and collaboration among services personnel located in far away different countries have enabled the global economy to ‘unbundle’ these different stages and get the best services from the best experts in the field living throughout the globe.

Importance of joining the global supply chains

Hence, in today’s globalised economy where production stages have been unbundled, no nation or a producer can claim ownership to a product, though they may carry the tag that they have been manufactured in a certain country.

A good example is iPhone or iPad of which research has come from California and Israel, sub components from South Korea, Taiwan, Japan, Malaysia, Singapore and Thailand and final assembly done in the Foxconn Factory owned by Taiwanese and located in China. Hence, the production tag that it is made in China is a misnomer. Economists call the logistics involved in this type of global production ‘the supply chain’.

In this connection, a very powerful supply chain has already been established in the Asian region called the Asian Supply Chain. Hence, no country today can remain isolated from the rest of the world as mere ‘islands of production’. Unless they jump onto the bandwagon of the supply chain already developed in the region, they cannot think of expanding their economies on a sustainable basis creating wealth and prosperity for their citizens.

India has signed CEPAs or CECAs with important members of Asian supply chain

India, having realised this important requirement, has signed a number of Comprehensive Economic Partnership Agreements or CEPAs and Comprehensive Economic Cooperation Agreements or CECAs with all the important countries in the Asian supply chain.

It has signed CEPAs with South Korea, Japan and Singapore and CECA with Malaysia. It is now in the process of negotiating a CEPA with Thailand. The objective of India to do so is to get market access for visible goods and invisible services and join the Asian Supply Chain.

It is important to note here that though India is a big economy, it has successfully signed CEPAs or CECAs with small economies like Singapore and Malaysia. No professionals in those countries have made any protests against such an asymmetrical marriage.

Sri Lanka’s Colombo Dockyard has used unbundled services

A good example of the use of unbundled supply chain in the recent past has been provided by Sri Lanka’s flagship shipbuilder, the Colombo Dockyard. As reported in its website, Colombo Dockyard has built two customised craft for India’s Lakshadweep Administration named ‘MV Corals’ and ‘MV Lagoons’. The vessels have been designed by Norway’s Global Maritime Brevik AS; the detailed engineering of the vessels has been designed by India’s Neilsoft Limited.

For Dockyard to perform this marvel, technology has come from Japan, inputs from both Japan and South Korea and marketing by both Indian and Sri Lankan marketers. That arrangement has helped Sri Lanka’s professionals to acquire experience, skills and competence.

This is a classic example of producing an engineering marvel by a creative and innovative Sri Lankan firm by using the facilities available in the unbundled global supply chain. Hence, if a Sri Lankan company is creative enough, it can always earn big dividends by jumping onto the bandwagon of India’s fledgling supply chain.

Sri Lanka’s professionals are migrating in numbers for greener pastures

There has been a fear expressed by many that signing a cooperation agreement such as ETCA with India will allow low quality unemployed Indian professionals produced in numbers by equally substandard Indian professional and educational institutions to invade Sri Lanka’s job markets. This argument has a fundamental flaw with respect to international migration of professionals.

Professionals will move from one country to another in search of greener pastures; Sri Lanka by any standard is not such a ‘greener pasture’ and as such, migration of professionals is not into Sri Lanka but out of Sri Lanka.

This has been demonstrated by the migration of engineers, accountants, IT specialists, physicians, scientists and academics in large numbers practically to all the countries in the world. Their destinations include the rich countries in North America, Europe and Australia and New Zealand; not so rich countries like the Middle East and poor countries in Africa and Oceania like Fiji Islands. There has not been a reverse migration from these countries to Sri Lanka.

At present, about 100 Sri Lankan students graduate in engineering subjects from the Asian Institute of Technology or AIT in Thailand every year. After graduation, all these budding Sri Lankan engineers start looking for job opportunities in Thailand and, if they fail to secure jobs there, in the neighbouring countries. They have no wish to return to Sri Lanka upon graduation. The reason? Remunerations are several times higher in those greener pastures than in Sri Lanka.

Hence, the fear that Indian IT specialists and similar professionals will flood Sri Lanka’s job markets is not in line with accepted economic laws. It is not the country that would hire such specialists; it is the business firms that would do so. A simple question which a probing mind should ask is why should a profit maximising business firm hire a substandard specialist from India knowing the low productivity of the hired specialist concerned? There is no reason unless there is stupidity in the decision making in such business firms.

Professionals should improve their standards or face extinction

Hence, even if migration of natural persons is included in the proposed ETCA, there is no threat to Sri Lanka’s professionals from India. But there is a threat to Sri Lankan professionals in all the fields including those in the medical field if they do not upgrade their standards in a continuing learning program.

For anyone to provide his professional service to another country, he need not locate himself in that country today. Advanced ICT has enabled him to do so from wherever he is located in the globe.

This opportunity has already been exploited in a big way by Indians who have started giving tuition to students in North America over the internet, as reported by Thomas L Friedman in his ‘The World is Flat’.

Sri Lanka’s professionals who do not improve themselves in line with the changing global environment are likely to lose their privileges and facilities in an unbundled global economy whether there is ETCA or not.

*W.A. Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at waw1949@gmail.com

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Latest comments

  • 0
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    “Hence, the fear that Indian IT specialists and similar professionals will flood Sri Lanka’s job markets is not in line with accepted economic laws. It is not the country that would hire such specialists; it is the business firms that would do so. A simple question which a probing mind should ask is why should a profit maximising business firm hire a substandard specialist from India knowing the low productivity of the hired specialist concerned? There is no reason unless there is stupidity in the decision making in such business firms.”

    An excellent debunking of the standard anti- ECTA argument. I think many of the critics suffer from a degree of stupidity, in addition to doubt about their own capabilities. If you are good at your job, you don’t need to worry.

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    @Old Codger

    The high quality Indian professionals will always go to the West. The ones who cant find slots there (i.e. the not-so high-quality) will obviously go to other places that pay more than India. i.e. the dregs

    In today’s world “substandard” is not really a governing factor. Only Cost. Work will go to the cheapest supplier. If that were not true, the US would still have the best workforce in the world and still be the manufacturing giant of the world. Instead, that crown is worn comfortably by China

    Why do you think the thousands of H1B visas are handed out by the US and thousands of jobs are outsourced to India ? Is it because because Indians are better at the work than the US workers ? Nope. It’s because they do the job cheaper. Result : thousands of unemployed in the West working their McJobs because employers will no longer pay for their skills and would rather contract the work out to the Indians for 1/3 the cost of a local.

    The good doctor speaks of “full disclosure” quite fondly. This will never happen. The positives will be heavily publicised and the negatives will never see the light of day. 5 years down the line, we will come to realise that the wool has been pulled well and truly over our eyes and having signed the deal, we can no longer get out of it or even challenge it

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      maalumiris

      “In today’s world “substandard” is not really a governing factor. Only Cost. Work will go to the cheapest supplier.”

      If you pay peanuts, you get monkeys.

      With monkeys, you could only build a bridge from Rameshwaram to Mannar, according to myth.

      China invited companies which brought, capital, technology, skills, raw materials, management, accounting system, persuaded Chinese to comply with international trade laws, …..

      China learned fast, thanks to Deng Xiaoping.

      The Chinese were willing to adapt and change.

      In the late 1960s Japan set up garment industries and prior to 1960s Russia helped build heavy industries in China.

      Even prior to Independence J R wrote to Kamaraj, Madras Congress leader requesting support to set up a paper mill, sugar, and other light industries. Kamaraj responded favourably.

      Since there is a huge disparity in skill development hence there is a need to import right kind of labour on contract basis. The employer is the best one to judge what kind of labour is required for the purpose of running the business profitably.

      It is none of our business to run other’s business.

      Think big.

      I know with your parochially driven mind you can only think within your environment, which I suppose is a deep well, or shall we say VP’s deep deep deep bunker.

      For a thriving entrepreneur, costs would be the last concern. The entrepreneur wants quality labour not cheap labour, which doesn’t deliver the service it is expected to deliver. Further, it would cost more to right the wrongs the sub quality employee makes.

      You ought to speak to the businessmen, entrepreneur, industrialists, …. who know what is best for the industry.

      I suspect you are a pen pusher who have served in a government department, marking time, not worrying about the quality of members of your staff, and no need to account for the work not done, new skills learnt, .. have/had no concern about productivity or creativity.

      The country needs a vibrant working people, not pen pushers and nay-sayers.

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        Local Doctor.

        In today’s world ” substandard ” is not really a governing factor.

        In today’s world ” substandard ” pea brained idiots like you are fit only to carry night soil. Why dont you apply to the govt to be a advisor because it looks like you have the correct qualifications to join the ” substandard ” gang you WANKER.

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          Percy G

          You are being very rude to maalumiris.

          You should apologise to him/her if you are not a person who indulges in self-actualisation.

          There are alternative and polite ways in which one can insult the opponent, all one needs is a little bit of brain in the right place.

          Are you sitting on your brain?

          If you are not, then say sorry to maalumiris.

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          @Percy G

          I bow to your superior argument, couched in such eloquent terms and with points that even the stoutest defender of ETCA would not be able to come up with in any school of thought

          Congratulations on your well thought out writings !

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        @Native Vedda

        Yes, China adapted. But the nitty gritty details of how exactly she adapted, if ever practised in Sri Lanka, would have you crying “foul” on these pages !

        If we are talking about China alone (though I think India now qualifies as well)

        The West’s initial attraction was China’s population (market). That, combined with the above AND the subsequent MFN status brought her to where she is today. China was smart enough to negotiate a deal that would be advantageous to her (and it was amply fuelled by western greed)

        Alas, no such self-interest will come into play in any deal negotiated between India and SL. We have none of the above and cannot / will not be able to negotiate equitable terms. Yahapalanaya will sign any deal just so they can say they did so and tell us all that we are now One With The World.

        I have no doubt your liberal/cosmopolitan attitude and Big Thinking makes you accept your house being managed and run by powers over which you have no control, having ceded all authority to them. Personally, I feel I should have control of what is mine, for better or worse.

        Or at the very least, ensure that what deals I make will be favourable to me

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          maalumiris

          “I have no doubt your liberal/cosmopolitan attitude and Big Thinking”

          If you meant this as an insult, I consider it as an accolade from an old guard.

          Here is a quote Deng:

          It doesn’t matter if a cat is black or white, so long as it catches mice.

          Deng Xiaoping

          I will come back on the essential issue of freedom of movement for experts, professionals and skilled workers later.

          PS

          Old guard

          The original or long-standing members of a group, regarded as unwilling to accept change or new ideas.

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            @Native Vedda

            ““I have no doubt your liberal/cosmopolitan attitude and Big Thinking” If you meant this as an insult, I consider it as an accolade from an old guard.”

            Not at all.. Since you consider me parochial, it follows, does it not, that you consider yourself the exact opposite ?

            I have no disagreement about your reference to Deng. But do you think we have a local Deng who will be able to accomplish anything even remotely equivalent to what he did in China ?

            If so, please state this person’s name. This Chosen One who will perform Deng-like miracles in Sri Lanka

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      Maalumiris,

      “In today’s world “substandard” is not really a governing factor. Only Cost. Work will go to the cheapest supplier. If that were not true, the US would still have the best workforce in the world and still be the manufacturing giant of the world. Instead, that crown is worn comfortably by China”
      As I have said so many times before, in IT substandard doesn’t wash. If you write buggy software, you simply can’t sell it , period. A good indication of a programmer’s quality is his English syntax. If this is poor, his syntax will be poor in PHP or whatever.
      What matters is skill and speed of execution. If an Indian can put out 10 pages of perfect code in an hour and a Sri Lankan 6 pages , at Rs.500 per hour, who do you think would be hired? As per my experience, the Sri lankan will insist on his tea breaks, grandmother’s funerals (and associated daannes), 2 weeks off for new year, etc.etc. Are we to blame the Indians for that?

      As to the US having the word’s best workforce, the Detroit auto industry for example unionized itself into oblivion starting from the 60’s. And of course nobody can claim that the US-designed gas-guzzlers were of better quality that a Toyota or Nissan. Work will go to the lowest bidder of the SAME quality

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        @Old Codger

        Perhaps you can explain in a simple way, why the West is outsourcing a massive part of it’s IT and call centres, to foreign climes ?

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          Maalumiris,

          “Perhaps you can explain in a simple way, why the West is outsourcing a massive part of it’s IT and call centres, to foreign climes ?”
          Basically because protectionism is dead, and the Cold War is over.Businesses have to drive down costs. Who will buy a 14 inch US made TV for $2500? If the Chinese can do it at the same quality for $ 50, so be it.
          In the past, technology was a mystery to the third world. Therefore our countries were only a source of raw materials. Mexico was the first to get outsourced work to cities just across the border from the US electronics and auto industries, which of course declined in the US. Quality was not affected. The mollycoddled US auto workers lost their jobs. But GM,Ford and the rest survived and now operate from other countries too (India included). The auto workers’ dole and retraining comes from taxes paid by the booming companies.
          It’s the same equation here. If our IT people and doctors are overpaid , and the Indians find the conditions attractive, we have 2 options:
          1 Let them come in and drive the wages down
          2 Work as hard as the Indians, or better, so that employers prefer Sri Lankans.
          In the final analysis, it is the consumers who benefit from cheaper services. Why protect somebody’s closed shop ?
          You should read up on the success stories of local enterprises that have come under Indian management.They have a knack for management. We don’t and must admit it.

          Being paranoid is no answer.

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            @Old Codger

            I am sorry but I completely disagree with you – I assume that you are not one of those that need to rely on a working wage to support you and yours ?

            You might be a businessman in pursuit of lower costs (and to the devil with the people who have to rely on you for a wage) or a retired person who does not rely on a salary to get by

            I don’t mean the above as an insult but if one does not directly have to deal with the issue day-in-day-out, then one is quite divorced from the reality of market flooding by low-cost goods and services

            The ‘mollycoddled’ may have lost their jobs to corporate greed for more profits – but they are now on the dole and creating a huge social crisis in the US which the government has to deal with. Meanwhile the 1% continues to grow richer on the backs of the dispossessed.

            Your code example does not work either. Code is becoming ever more inefficient and less optimised. I despair at the so-called “quality” that we get., oftentimes after multiple re-re-visions (which negate the so called “quality solution at a quality price”)

            The so-called low cost means you have to cut corners somewhere and the profit-chasers would rather give the work to an Indian graduate rather than a UCLA one because the Karnataka guy will work for 1/4 or 1/3 of the cost, NOT because he is better at his job or works harder but just works cheaper.

            Like Saturn, the US (and many other Western economies) devours it’s own and the governments are complicit in it. Not something that I want any country to do

            So let us agree to disagree.

            That is why Trump will be the next President of the US. Not because he will actually change anything but because people believe he will (bring back jobs from China, build his walls etc etc)

            As a matter of interest, since you are such a proponent of India, between a BMW or Tata, which would you choose ?

            By the way, you should know that I am not against trade agreement with India simply for the sake of it. What I object to is the inevitable unbalanced and inequitable agreement that will be signed simply because our government wants to claim some political mileage at home to underscore our apparent “new acceptance” on the world stage.

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              Maalumiris,
              ” As a matter of interest, since you are such a proponent of India, between a BMW or Tata, which would you choose ?”

              Interesting question. In fact I use a Maruti, though I have used Fiat /Toyota/ Nissan in the past. This is uncomplicated, cheap- running, and has great service backup.

              I am even more extreme (in your eyes) than you suspect. I would propose not ETCA but a full economic and political union with India. It was JRJ himself who proposed this in the 30’s, but got shot down by the Senanayakes. Imagine where we would be if that had gone through? We wouldn’t have to worry about competitiveness, labour cost, raw materials, export markets or whatever.
              “I assume that you are not one of those that need to rely on a working wage to support you and yours ?”
              No I don’t rely on a wage. But I am a bit of an inventor and run a SMALL business where I periodically get shocks from Chinese imports. I deal with those by adaptation. Sure I had a good time in the protectionist 90’s, but I believe we have to live in the real world.

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                Old Codger

                The main obstacle to 21st century development is the little islanders’ attitude to learning, adapting and changing the entire nation, refusal to drag the country out of their romantic past, modernizing, in every aspect of islander’s life.

                Every little islander thinks, he/she has the wherewithal to stand alone and resist all those politico, socio economic impurities invading this island.

                In fact the island economy is dependent on maintaining good relation with all countries, because of its size and it is resource starved, … in every aspect of islander’s is connected to and conditioned by outside forces, …..

                The little islander believes “man is an island” while importing A to Z from outside. He/she forgets the garment industry imports raw material, add value and then export. There is no sufficiently large domestic market to provide jobs for all. Then of course the country is dependent on overseas markets.

                Similar to importing quality raw material from overseas producers, an economically informed person would consider importing quality skilled labour is essential part of adding value to whatever is being produced, be it for domestic or overseas market.

                Those who comment/type here on ETCA haven’t put forward their economic arguments as to why they oppose such agreements, they are simply driven by anti Indian sentiments, paranoia, racism, bigotry , petty nationalism, romantic past, …………… and resistance to change, failure to understand the modern economy, ………

                There is a huge market emerging in India. Patriots should be thinking about ways and means of tapping it rather than wagging their finger at imagined enemies, …. as if on their own they could protect the island from outsiders, particularly from India.

                What are these patriots protecting the country from, perhaps collective virginity of the island’s entire women folks, forever.

                This island collectively has failed in the past to make use of many opportunities.

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                  “Those who comment/type here on ETCA haven’t put forward their economic arguments as to why they oppose such agreements, they are simply driven by anti Indian sentiments, paranoia, racism, bigotry , petty nationalism, romantic past, …………… and resistance to change, failure to understand the modern economy, “

                  On the dot, NV…

            • 0
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              Maalumiris
              There is a very good example of what unrestricted Indian labour can do for a country – Dubai. The Indian population in Dubai is higher than the local Arabs. Just as in SL, the local population want high wages for doing very little. Dubai has very little oil wealth and survives on trade, which is manned by the millions of Indian managers,doctors, engineers, accountants, labourers and building workers.
              We must not forget that SL had its most prosperous period when there were millions of Indians here too.
              Wouldn’t YOU want a specialist who doesn’t demand an arm and a leg for 10 minutes of “consultation”?

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                @Old Codger

                I’m not sure that pointing to Dubai’s current wealth and say “Indians have a lot to do with it” is a valid statement without assessing the history of how Dubai actually became what it is today. I would think that a statement such as “Indians will go where the money is”.. would be a far more valid statement (but that’s true of all of us)

                Initially when the MidEast labour market opened up, Southeast Asia was the major labour supplier. Eventually, after much exploitation they imposed stricter rights and wage requirements and the MidEast went to progressively cheaper suppliers, not necessarily the same or better quality, ending up with the current lowest suppliers, Bangladesh, India and Sri Lanka (and possibly Indonesia)

                The South Asians are servile and compliant., don’t fight too much for wages and their governments don’t really care about them. They are therefore, the model employee. Just slightly above slave-grade as many on these pages take delight in pointing out !

                Of course I would want such employees on my payroll!!!

                Don’t forget, Dubai imposes VERY STRICT conditions on anyone employed, working or running an enterprise there. But people are willing to put up with all kinds of privations if the money is good.

                I don’t mind if SL will do the same but whatever SL sign’s with India will be from a position of weakness and therefore inequitable. It is THIS that I object to.

                As for doctors (I assume you mean in Sri Lanka?) that’s a whole different kettle of fish about which I have other ideas!

                I think @nimal fernandos post says much of what I want to in much more succinct terms

                The ILO has an excellet publication called “Asian Labour Migration: Issues and Challenges in an Era of Globalization” – which outlines the history of MidEast labour patterns and it’s challenges

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                  Maalumiris,
                  “’m not sure that pointing to Dubai’s current wealth and say “Indians have a lot to do with it” is a valid statement without assessing the history of how Dubai actually became what it is today. I would think that a statement such as “Indians will go where the money is”.. would be a far more valid statement (but that’s true of all of us) “

                  You need to go further back in history to find out why so many Indians are in the ME. Dubai was one of the “Trucial states” and a British protectorate in the 30’s. It was garrisoned by the British Indian Army and the currency till the 60’s was the Indian Rupee (surprise, surprise!) Indians (that includes Pakistanis) ran practically everything in the Gulf States until Independence.
                  The SE Asians only started turning up in the 70’s (yes I was in the region at the time), with Thai and Korean labour.
                  Here is an interesting 1937 film about Sharjah. Note who is always unobtrusively in the background behind the pampered Brits.

                  “Don’t forget, Dubai imposes VERY STRICT conditions on anyone employed, working or running an enterprise there”
                  Yes, but they are looser than in India itself, which is why many Indian billionaires operate from Dubai. We ourselves could create the same conditions.

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                    @Old Codger

                    And here we come to the crux…

                    “We ourselves could create the same conditions.”

                    Yes, but I don’t believe we will.

                    I hope you understand me now.

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                      Maalumiris,
                      Yes, the problem is with us. I think Ranil has a lot more up his sleeve in the way of shock treatment than he is willing to talk about.Give him a chance.
                      I forgot the link to that video:
                      https://www.youtube.com/watch?v=253vJ6uYpq4

  • 3
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    Mr W.A Wijewardena,

    “A simple question which a probing mind should ask is why should a profit maximising business firm hire a substandard specialist from India knowing the low productivity of the hired specialist concerned?”

    If the top 5% of the graduating class of IT specialists elects to go to the USA, by the standards the top 5% has set the remaining 95% are substandard anyway. They may have the skills required but not the same ability. So defining “substandard” is not so clear-cut. SL businesses will be hiring “substandard” Indian professionals anyway.

    If there is a dearth of IT professionals, for a business, a substandard IT professional is better than no IT professional. If there is an influx of substandard IT professionals, businesses – all things being equal, watching their bottom dollar – will go for the cheaper IT professionals – if substandard IT professionals are all what they can get.

    In the early 80’s in the US some college kids who could program in C were getting hired for $30K/year while starting Profs were barely making 25K. What set the market price, more than the level of their skills, was the scarcity.

    In Singapore’s agreement with India, the flooding of substandard IT professionals is pre-empted by setting a minimum basic wage which is $3300 (other benefits and allowances will accrue on top of this.) This is the essential criteria to set the skill-level.

    These things can be very simply and rationally explained without going into long-winded claptrap. Harsha De Silva is doing a good job debunking some arguments against the ECTA. More of that is needed if the government wants to allay the fears.

    Then let Ranil walk in and say he is going to sign it whether the people like it or not. Talk about the ability to bring the people along!

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    The ETCA is second step of Free Trade Agreement with Indian since 1998.

    UNP has no policy of their own, UNP-Ranil W…. dare not declare own policy of proposed ECTA not yet retreat at the present moment is necessary to be postponed interest of National Economic and Sustsnibility of Revitalization of economy that without further delay.

    The leader of UNP Ranil W… twist and turn play with words ,substitute the key issues of question of continuously avoiding real content both sides of interest of Trade at present moment.
    UNP blow soap bubbles such as International trade propaganda by deeds.

    What does this mean?

    It can only mean one of two things; either it is mere Trade Liberalization or it means World Free Trade to overthrow US led Imperialism. Such nonsense cannot be uttered openly and that is why the Neo-colonialist of UNP are obliged to take refuge from the derision of every politically conscious people behind high-sounding and empty phrases.

    The UNP leadership hope the inattentive masses of people will not notice the real meaning of ETCA the phrase that “trade liberalization” propaganda by deeds. The flaunting of high sounding proposed ETCA that Trade Agreement is characteristic of the declassed US and Indian led petty -bourgeois intellectuals.
    Here we come to the root of the trade of ETCA mistake of the UNP-
    Neo-Liberalist .

    We must deal with this point in grater details.

    1 Neo-liberals of UNP leadership do not understand what kind of transition of Trade, it is from big power Nation Capitalism to Sri Lankan Sustsnibility of capitalism gives the rights and grounds to call country the developing democratic and trade of the Republic.

    2 UNP they reveal neo-colonial of their depend petty-bourgeoisie elements as the principle agents of Indian big bourgeoisies. And they(UNP) are principle enemy of people of Sri Lankans.

    3 In that UNP making a bugbear of Indian capitalism, UNP betray their failure to understand that Sri lanka state differ from Indian big bourgeoisie state economically.
    But what does the word of trade of ETCA transition mean? Does it mean a applied to an economy, that the current system contains elements, particles, fragments of both developing capitalism in sustsnibility path and model in an Island .

    Indeed everyone will admit that it does. But not all who UNP leadership this take the trouble to consider what elements actually constitute the various socio-economic structure that exist in
    Sri Lankan present time.

    This is crux of the question of ETCA?

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      N.Wimaladasa

      How do you propose to safe guard the

      “interest of National Economic and Sustsnibility of Revitalization of economy that without further delay. “

      I have an idea, lets export kavun, kokis, dosai masala vadei, kattu sambol,vaṭṭalappam, JVP’s outdated Marxism, Mahinda Chintana, …. export our women folks to Medieval Middle East Kingdoms, facilitate trans-shipment of drugs, gun running, …..

      ” In that UNP making a bugbear of Indian capitalism, UNP betray their failure to understand that Sri lanka state differ from Indian big bourgeoisie state economically. “

      Let’s sign trade agreements with North Korea, China, central Asian countries, …

      Here is news for you:

      Sri Lanka aims to implement FTA with China
      Source: Xinhua 2016-03-02 18:37:35

      COLOMBO, March 2 (Xinhua) — Sri Lanka aims to implement a Free Trade Agreement (FTA) with China in order to have preferential access to a market of 1.3 billion people, the country’s state investment agency said here on Wednesday.

      Both countries had recognized the benefits that can be leveraged through the positive relationship between trade and investment, the Board of Investments (BoI) said in a statement.

      The island nation already has preferential trade agreements with India and Pakistan.

      Sri Lanka had also drawn attention to possible Chinese involvement in the government’s development plans, such as the Western Region Megapolis project, which includes infrastructure development, involving elevated highways, light railway and utilities as well as housing and commercial real estate.

      The BoI said that the Sri Lankan government had also informed China that it was accelerating the implementation of ongoing Chinese project in the island nation and aimed to attract more Chinese tourists to visit Sri Lanka.

      “Both sides recognized that China’s Going Abroad strategy and Sri Lanka’s very favorable location on the Maritime Silk Road provided a strong basis for strengthening Sino-Lanka economic relations,” the BoI said.

      It added that Sri Lanka had also paid its gratitude for China’s support during the country’s 30-year civil conflict as well as assistance for infrastructure development.

      China has been Sri Lanka’s biggest contributor of Foreign Direct Investments. Nearly 70 percent of the infrastructure projects in the country have been funded by China and built by Chinese companies.

      http://news.xinhuanet.com/
      english/2016-03/02/c_135148756.htm

      Let us give priority to People’s Republic of China and sing “March of the Volunteers” and build this island into “Socialism with Chinese characteristics”.

      Well, let us invite the peacefully rising middle kingdom to colonise this island.

      Do you like the alternative ideas that I have put forward to avoid Indian bourgeoisie colonising this island?

      By the way, could you define and explain what Neo-colonialist and bourgeoisie mean as far as you understood.

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    comment of native Vaddha…….

    I am poor reader of WTO manual and handbook which enacted by 124 countries 1995 January. But I am stand for World FREE Trade without any prejudices of that Monopoly Imperialism led by US -MNC s, will be replace by Sustsnibility of Capitalism in Globally.

    Marxism never thought to world public that system of Socialism is not going to end world, like that Capitalist teacher of present day Francis Fukuyama……said that clash of civilization will be end of World.
    Both Monopoly -Capitalism and Francis Fukuyma represent complete bankruptcy of US led monopoly Trade system that bankruptcy and both dexterity of rich experienced undermined FREE TRADE skilfully mask this economic and Trade bankruptcy and their own bankruptcy and desertion to the monopoly capitalism with covered by so-called “social market economy” of UNP new political them of survival.

    Marx ,Engels and Lenin are far reaching thinking tank of socialist school of thoughts. Neither of them has anything that permeates of Marx Engels and Lenin and that actually distinguishes socialism from bourgeois capitalism of its caricature of it.

    The namely the elucidation of the task of Free Trade as distinct from the task of reform monopoly Trade led by US MNC’s ,the elucidation of trade revolutionary tactics as distinct from monopoly reformist tactics, well the elucidation of the role of majority countries role of FREE TRADE in abolition of monopoly of World Trade system in 21 century will be democratic and progressive one.
    The order of system of monopoly Trade of current regime that including BJP-regime centre in New Delhi of emerging great power not willing shares with Sri Lankan a particle of Indian big bourgeoisies super-profit and their super booty.

    World has change in New Era of Capitalism that has noting to do with JVP’s “Marxism”, as Native Vedda said, it is well known fact JVP are political traitors to socialist economy and politics can now attempted evade the task of democratic revolution the need for broad base trade revolution in Global wide.

    We are in transition stages for world Trade, business and politics for new era of revolution. An economic strategy of Indian trade is more or less occupy whole island by type of Solverain in Germany that Junker type of unification since 1818 to 1872 by Prussian dominations of whole Germany land by blood and sward.

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