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Is Sri Lanka serious about benefiting from European Union support?

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*EU has been a steady supporter of Sri Lanka since the opening of the EU Delegation in the country in 1995

*Through the GSP+, the EU has unilaterally granted duty free access to about 7,000 Sri Lankan products

*Over-protecting local industries may reduce productivity and competitiveness of Sri Lankan products

by Sanath Nanayakkare

Denis Chaibi, Ambassador, Head of Delegation of the European Union to Sri Lanka and the Maldives had a series of discussions with a number of Sri Lankan authorities recently while he was on an official tour in the country. ‘The Island’ had an interview with Chaibi after he had concluded the round of talks. Below are some excerpts from that interview.

Q.

The EU, a Standards Super Power in the world, has consistently been supportive of Sri Lanka. How can Sri Lanka benefit from that support to build a best-in-class manufacturing infrastructure and receive international acceptance for its products and services in the global market?

A

. Indeed, the EU has been a steady supporter of Sri Lanka. Since the opening of the EU Delegation in the country in 1995, the EU taxpayers have provided roughly one billion Euro in development assistance. All of this in grants, with no significant conditions attached.

With 27 Member States and 450 million customers with high income, we are also the largest market in the world. Through the GSP+, the EU has unilaterally granted duty free access to about 7,000 Sri Lankan products – that’s 66% of the EU tariff lines.

To help Sri Lanka in taking full advantage of these GSP+ opportunities, the EU had also made available over 8 million EUR of grants for trade assistance, with the support of specialised UN agencies such as UNIDO and the International Trade Centre. This cooperation translates into real support for Sri Lanka’s national export strategy, help SME’s to get ready to export and encourage new export sectors. Diversification is important as Sri Lankan exports are still focused on very few products.

Sri Lanka has a number of strengths it can further work on. First is the focus on quality. There are opportunities in producing more quality goods for Sri Lanka to stay competitive in the global arena. To put it simply, many neighbouring countries can produce cheaper, but price is not the only way to stay competitive. Quality is another one.

Second, compared to many countries in the region Sri Lanka has high compliance with international labour and environmental standards. This a competitive advantage! Sri Lanka could move further towards sustainable production concepts such as organic produce, green production and Fair Trade practices. Such practices are highly valued by consumers around the world, and in particular in the EU. And they are ready to pay a premium for such products.

Third, beyond export promotion, Sri Lanka is reflecting on how to attract more investments and offer an attractive business environment. Investors can bring not only capital but also share their know-how and best practices.

Finally, a fourth strength would be to remain open for business! Over-protecting local industries may reduce productivity and competitiveness, meaning that products will be more expensive for Sri Lankans, and the possibilities to export will be limited as neighbours will produce better products for a cheaper price. Sri Lanka has a great opportunity to further develop its position as a regional trading hub and major trans-shipment centre. Yet, closing borders to imports is not conducive to these objectives.

Sri Lanka could look at coconut-based products which could be produced in Sri Lanka in the most effective and competitive way. Since the volume of production cannot compete with larger producing countries Sri Lanka could invest in niche products with very high added value marketing/branding their uniqueness. The EU supports geographical branding in Sri Lanka such as “Pure Ceylon Cinnamon”, this is one of the many way not only to add value but also offer new market access opportunity.

Q.

What should Sri Lanka do to gain support of the EU to obtain broader export market access?

A

.The EU market is already wide open: GSP+ grants unilateral tariff preferences on a large range of products to Sri Lanka. About €3 billion was imported into the EU from Sri Lanka in 2019 using the GSP+ preferences. This resulted in a positive trade balance for Sri Lanka of 1.5 billion euro in 2019 alone!

There has been impressive export growth in the months following the re-gaining of GSP+ in 2017 and in total, since its reinstatement, Sri Lanka’s exports to the EU have increased by more than 25%; Fisheries exports have literally doubled since the removal of the fish ban and regaining GSP+. Other notable growth sectors include clothing, tea, tyres, gems as well as motor vehicle parts and footwear.

We thus believe that GSP+ has worked and is working well for Sri Lanka. However, GSP+ still offers great future potential for Sri Lankan companies. GSP utilisation rate is currently still relatively low, and concentrated in a few sectors. We hope that this will improve in the future.

The recent reclassification of Sri Lanka as Lower Middle Income country, means that the GSP+ scheme can continue for at least another three years. On the other hand, this also requires Sri Lanka to continue implementing the 27 international Conventions GSP+ is based on – and all have been signed and ratified by Sri Lanka.

Beyond formal market access, it is also key for Sri Lankan exporters to comply with relevant European standards, in particular phytosanitary certificates (an official document required when shipping regulated articles such as plants, plant products or other regulated articles). We therefore support Sri Lanka in setting up relevant laboratories and in training its companies.

Anyone who has shopped for fruits and vegetables over the last year has seen that prices have increased drastically, and part of the reason is due to more concentrated demand and less competition.

European Importers also decide based on quantity and predictability of supply and other consumer requirements. So, Sri Lankan companies should be equipped with strong marketing and sales work force.

Q.

What do you think of the ongoing import ban in Sri Lanka?

A.

The European Union believes that global problems, such as the pandemic and the ensuing economic crisis, can only be solved through global cooperation. We can help ourselves only by working together. For the recovery of the Sri Lankan and global economy, open and rules-based trade is essential as it gives confidence to businesses to invest, and re-start exchanges that bring in employment and revenues.

Sri Lanka is the only country in the world that has recently adopted an outright import ban. We understand that the Government took this decision to solve a dire problem of foreign currencies. The situation is indeed difficult, but as time goes by, the import ban appears less and less as a temporary measure, and more and more as an economic policy that will increasingly prove incompatible with an export drive.

For Sri Lankan companies, it is already getting more difficult to obtain the needed inputs for their production. Even if special provisions allow them to import raw material, the ban simply complicates business and makes producing in Sri Lanka more expensive.

Highly-restrictive trade measures imposed by an import ban also reduces much-needed State revenue from import tariffs and para-tariffs. Overall, I fear that the import ban reduces Sri Lankan exports competitiveness by adding hurdles when importing raw materials, and by reducing shipping options. The legal uncertainty of the measures will reduce Sri Lanka’s ability to attract European investments, which Sri Lanka has been calling for.

Last, but not least Sri Lanka is part of global trade through its membership and compliance with WTO rules. So notification of the decision to the WTO, and explanations on how these measures will be rescinded, are needed.

In short, trade cannot be a one-way street where the EU is opening its market to Sri Lanka, which benefit greatly from it with a positive trade balance, while EU producers cannot have access to Sri Lanka.

Q.

What was the outcome of your recent engagement with Sri Lankan Trade Minister Bandula Gunawardena and Foreign Affairs Minister Dinesh Gunawadena?

A.

We had a very good and open exchange with both Ministers. On trade, we understand from the meetings that the government is keen to continue cooperation with the EU under GSP+ and many other areas. There are a variety of assistance projects in the pipeline in the area of agriculture, the justice sector and in terms of COVID-19 response. We also agreed with the Foreign Minister to soon resume our formal political consultations through an EU-Sri Lanka Joint Commission and working groups on development, human rights and trade.

Q.

Did you have a dialogue with President Gotabaya Rajapaksa?

A.

Yes, of course. The last time all EU Ambassadors met President Rajapaksa was in June. We shared our concern about the import-ban but also discussed more broadly current challenges of the country and how we can work together to tackle them. This also included discussion about possible EU support in agricultural development, including cold storage facilities.


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Islamophobia and the threat to democratic development

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There’s an ill more dangerous and pervasive than the Coronavirus that’s currently sweeping Sri Lanka. That is the fear to express one’s convictions. Across the public sector of the country in particular many persons holding high office are stringently regulating and controlling the voices of their consciences and this bodes ill for all and the country.

The corrupting impact of fear was discussed in this column a couple of weeks ago when dealing with the military coup in Myanmar. It stands to the enduring credit of ousted Myanmarese Head of Government Aung San Suu Kyi that she, perhaps for the first time in the history of modern political thought, singled out fear, and not power, as the principal cause of corruption within the individual; powerful or otherwise.

To be sure, power corrupts but the corrupting impact of fear is graver and more devastating. For instance, the fear in a person holding ministerial office or in a senior public sector official, that he would lose position and power as a result of speaking out his convictions and sincere beliefs on matters of the first importance, would lead to a country’s ills going unaddressed and uncorrected.

Besides, the individual concerned would be devaluing himself in the eyes of all irrevocably and revealing himself to be a person who would be willing to compromise his moral integrity for petty worldly gain or a ‘mess of pottage’. This happens all the while in Lankan public life. Some of those who have wielded and are wielding immense power in Sri Lanka leave very much to be desired from these standards.

It could be said that fear has prevented Sri Lanka from growing in every vital respect over the decades and has earned for itself the notoriety of being a directionless country.

All these ills and more are contained in the current controversy in Sri Lanka over the disposal of the bodies of Covid victims, for example. The Sri Lankan polity has no choice but to abide by scientific advice on this question. Since authorities of the standing of even the WHO have declared that the burial of the bodies of those dying of Covid could not prove to be injurious to the wider public, the Sri Lankan health authorities could go ahead and sanction the burying of the bodies concerned. What’s preventing the local authorities from taking this course since they claim to be on the side of science? Who or what are they fearing? This is the issue that’s crying out to be probed and answered.

Considering the need for absolute truthfulness and honesty on the part of all relevant persons and quarters in matters such as these, the latter have no choice but to resign from their positions if they are prevented from following the dictates of their consciences. If they are firmly convinced that burials could bring no harm, they are obliged to take up the position that burials should be allowed.

If any ‘higher authority’ is preventing them from allowing burials, our ministers and officials are conscience-bound to renounce their positions in protest, rather than behave compromisingly and engage in ‘double think’ and ‘double talk’. By adopting the latter course they are helping none but keeping the country in a state of chronic uncertainty, which is a handy recipe for social instabiliy and division.

In the Sri Lankan context, the failure on the part of the quarters that matter to follow scientific advice on the burials question could result in the aggravation of Islamophobia, or hatred of the practitioners of Islam, in the country. Sri Lanka could do without this latter phobia and hatred on account of its implications for national stability and development. The 30 year war against separatist forces was all about the prevention by military means of ‘nation-breaking’. The disastrous results for Sri Lanka from this war are continuing to weigh it down and are part of the international offensive against Sri Lanka in the UNHCR.

However, Islamophobia is an almost world wide phenomenon. It was greatly strengthened during Donald Trump’s presidential tenure in the US. While in office Trump resorted to the divisive ruling strategy of quite a few populist authoritarian rulers of the South. Essentially, the manoeuvre is to divide and rule by pandering to the racial prejudices of majority communities.

It has happened continually in Sri Lanka. In the initial post-independence years and for several decades after, it was a case of some populist politicians of the South whipping-up anti-Tamil sentiments. Some Tamil politicians did likewise in respect of the majority community. No doubt, both such quarters have done Sri Lanka immeasurable harm. By failing to follow scientific advice on the burial question and by not doing what is right, Sri Lanka’s current authorities are opening themselves to the charge that they are pandering to religious extremists among the majority community.

The murderous, destructive course of action adopted by some extremist sections among Muslim communities world wide, including of course Sri Lanka, has not earned the condemnation it deserves from moderate Muslims who make-up the preponderant majority in the Muslim community. It is up to moderate opinion in the latter collectivity to come out more strongly and persuasively against religious extremists in their midst. It will prove to have a cementing and unifying impact among communities.

It is not sufficiently appreciated by governments in the global South in particular that by voicing for religious and racial unity and by working consistently towards it, they would be strengthening democratic development, which is an essential condition for a country’s growth in all senses.

A ‘divided house’ is doomed to fall; this is the lesson of history. ‘National security’ cannot be had without human security and peaceful living among communities is central to the latter. There cannot be any ‘double talk’ or ‘politically correct’ opinions on this question. Truth and falsehood are the only valid categories of thought and speech.

Those in authority everywhere claiming to be democratic need to adopt a scientific outlook on this issue as well. Studies conducted on plural societies in South Asia, for example, reveal that the promotion of friendly, cordial ties among communities invariably brings about healing among estranged groups and produces social peace. This is the truth that is waiting to be acted upon.

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Pakistan’s love of Sri Lanka

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By Sanjeewa Jayaweera

It was on 3rd January 1972 that our family arrived in Karachi from Moscow. Our departure from Moscow had been delayed for a few weeks due to the military confrontation between Pakistan and India. It ended on 16th December 1971. After that, international flights were not permitted for some time.

The contrast between Moscow and Karachi was unbelievable. First and foremost, Moscow’s temperature was near minus 40 degrees centigrade, while in Karachi, it was sunny and a warm 28 degrees centigrade. However, what struck us most was the extreme warmth with which the airport authorities greeted our family. As my father was a diplomat, we were quickly ushered to the airport’s VIP Lounge. We were in transit on our way to Rawalpindi, the airport serving the capital of Islamabad.

We quickly realized that the word “we are from Sri Lanka” opened all doors just as saying “open sesame” gained entry to Aladdin’s cave! The broad smile, extreme courtesy, and genuine warmth we received from the Pakistani people were unbelievable.

This was all to do with Mrs Sirima Bandaranaike’s decision to allow Pakistani aircraft to land in Colombo to refuel on the way to Dhaka in East Pakistan during the military confrontation between Pakistan and India. It was a brave decision by Mrs Bandaranaike (Mrs B), and the successive governments and Sri Lanka people are still enjoying the fruits of it. Pakistan has been a steadfast and loyal supporter of our country. They have come to our assistance time and again in times of great need when many have turned their back on us. They have indeed been an “all-weather” friend of our country.

Getting back to 1972, I was an early beneficiary of Pakistani people’s love for Sri Lankans. I failed the entrance exam to gain entry to the only English medium school in Islamabad! However, when I met the Principal, along with my father, he said, “Sanjeewa, although you failed the entrance exam, I will this time make an exception as Sri Lankans are our dear friends.” After that, the joke around the family dinner table was that I owed my education in Pakistan to Mrs B!

At school, my brother and I were extended a warm welcome and always greeted “our good friends from Sri Lanka.” I felt when playing cricket for our college; our runs were cheered more loudly than of others.

One particular incident that I remember well was when the Embassy received a telex from the Foreign inistry. It requested that our High Commissioner seek an immediate meeting with the Prime Minister of Pakistan, Mr Zulifikar Ali Bhutto (ZB), and convey a message from Mrs B. The message requested that an urgent shipment of rice be dispatched to Sri Lanka as there would be an imminent rice shortage. As the Ambassador was not in the station, the responsibility devolved on my father.

It usually takes about a week or more to get an audience with the Prime Minister (PM) of a foreign country due to their busy schedule. However, given the urgency, my father spoke to the Foreign Ministry’s Permanent Sectary, who fortunately was our neighbour and sought an urgent appointment. My father received a call from the PM’s secretary around 10 P.M asking him to come over to the PM’s residence. My father met ZB around midnight. ZB was about to retire to bed and, as such, was in his pyjamas and gown enjoying a cigar! He had greeted my father and had asked, “Mr Jayaweera, what can we do for great friend Madam Bandaranaike?. My father conveyed the message from Colombo and quietly mentioned that there would be riots in the country if there is no rice!

ZB had immediately got the Food Commissioner of Pakistan on the line and said, “I want a shipload of rice to be in Colombo within the next 72 hours!” The Food Commissioner reverted within a few minutes, saying that nothing was available and the last export shipment had left the port only a few hours ago to another country. ZB had instructed to turn the ship around and send it to Colombo. This despite protests from the Food Commissioner about terms and conditions of the Letter of Credit prohibiting non-delivery. Sri Lanka got its delivery of rice!

The next was the visit of Mrs B to Pakistan. On arrival in Rawalpindi airport, she was given a hero’s welcome, which Pakistan had previously only offered to President Gaddafi of Libya, who financially backed Pakistan with his oil money. That day, I missed school and accompanied my parents to the airport. On our way, we witnessed thousands of people had gathered by the roadside to welcome Mrs B.

When we walked to the airport’s tarmac, thousands of people were standing in temporary stands waving Sri Lanka and Pakistan flags and chanting “Sri Lanka Pakistan Zindabad.” The noise emanating from the crowd was as loud and passionate as the cheering that the Pakistani cricket team received during a test match. It was electric!

I believe she was only the second head of state given the privilege of addressing both assemblies of Parliament. The other being Gaddafi. There was genuine affection from Mrs B amongst the people of Pakistan.

I always remember the indefatigable efforts of Mr Abdul Haffez Kardar, a cabinet minister and the President of the Pakistan Cricket Board. From around 1973 onwards, he passionately championed Sri Lanka’s cause to be admitted as a full member of the International Cricket Council (ICC) and granted test status. Every year, he would propose at the ICC’s annual meeting, but England and Australia’s veto kept us out until 1981.

I always felt that our Cricket Board made a mistake by not inviting Pakistan to play our inaugural test match. We should have appreciated Mr Kardar and Pakistan’s efforts. In 1974 the Pakistan board invited our team for a tour involving three test matches and a few first-class games. Most of those who played in our first test match was part of that tour, and no doubt gained significant exposure playing against a highly talented Pakistani team.

Several Pakistani greats were part of the Pakistan and India team that played a match soon after the Central Bank bomb in Colombo to prove that it was safe to play cricket in Colombo. It was a magnificent gesture by both Pakistan and India. Our greatest cricket triumph was in Pakistan when we won the World Cup in 1996. I am sure the players and those who watched the match on TV will remember the passionate support our team received that night from the Pakistani crowd. It was like playing at home!

I also recall reading about how the Pakistani government air freighted several Multi Barrell artillery guns and ammunition to Sri Lanka when the A rmy camp in Jaffna was under severe threat from the LTTE. This was even more important than the shipload of rice that ZB sent. This was crucial as most other countries refused to sell arms to our country during the war.

Time and again, Pakistan has steadfastly supported our country’s cause at the UNHCR. No doubt this year, too, their diplomats will work tirelessly to assist our country.

We extend a warm welcome to Mr Imran Khan, the Prime Minister of Pakistan. He is a truly inspirational individual who was undoubtedly an excellent cricketer. Since retirement from cricket, he has decided to get involved in politics, and after several years of patiently building up his support base, he won the last parliamentary elections. I hope that just as much as he galvanized Sri Lankan cricketers, his political journey would act as a catalyst for people like Kumar Sangakkara and Mahela Jayawardene to get involved in politics. Cricket has been called a “gentleman’s game.” Whilst politics is far from it!.

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Covid-19 health rules disregarded at entertainment venues?

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Believe me, seeing certain videos, on social media, depicting action, on the dance floor, at some of these entertainment venues, got me wondering whether this Coronavirus pandemic is REAL!

To those having a good time, at these particular venues, and, I guess, the management, as well, what the world is experiencing now doesn’t seem to be their concerned.

Obviously, such irresponsible behaviour could create more problems for those who are battling to halt the spread of Covid-19, and the new viriant of Covid, in our part of the world.

The videos, on display, on social media, show certain venues, packed to capacity – with hardly anyone wearing a mask, and social distancing…only a dream..

How can one think of social distancing while gyrating, on a dance floor, that is over crowded!

If this trend continues, it wouldn’t be a surprise if Coronavirus makes its presence felt…at such venues.

And, then, what happens to the entertainment scene, and those involved in this field, especially the musicians? No work, whatsoever!

Lots of countries have closed nightclubs, and venues, where people gather, in order to curtail the spread of this deadly virus that has already claimed the lives of thousands.

Thailand did it and the country is still having lots of restrictions, where entertainment is concerned, and that is probably the reason why Thailand has been able to control the spread of the Coronavirus.

With a population of over 69 million, they have had (so far), a little over 25,000 cases, and 83 deaths, while we, with a population of around 21 million, have over 80,000 cases, and more than 450 deaths.

I’m not saying we should do away with entertainment – totally – but we need to follow a format, connected with the ‘new normal,’ where masks and social distancing are mandatory requirements at these venues. And, dancing, I believe, should be banned, at least temporarily, as one can’t maintain the required social distance, while on the dance floor, especially after drinks.

Police spokesman DIG Ajith Rohana keeps emphasising, on TV, radio, and in the newspapers, the need to adhere to the health regulations, now in force, and that those who fail to do so would be penalised.

He has also stated that plainclothes officers would move around to apprehend such offenders.

Perhaps, he should instruct his officers to pay surprise visits to some of these entertainment venues.

He would certainly have more than a bus load of offenders to be whisked off for PCR/Rapid Antigen tests!

I need to quote what Dr. H.T. Wickremasinghe said in his article, published in The Island of Tuesday, February 16th, 2021:

“…let me conclude, while emphasising the need to continue our general public health measures, such as wearing masks, social distancing, and avoiding crowded gatherings, to reduce the risk of contact with an infected person.

“There is no science to beat common sense.”

But…do some of our folks have this thing called COMMON SENSE!

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