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Revival of Export Development Council – a far-reaching stride for the acceleration of Sri Lankan exports

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by J. A. A. S. Ranasisnghe

Productivity Specialist and Management Consultant

It is heartening to note that President Gotabaya Rajapaksa has re-galvanized the Export Development Council (EDC) of the Export Development Board (EDB), consisting of nine ministries, after a lapse of 28 years, on the initiative of the Minister in charge Bandula Gunawardana with a view to formulating and implementing national export development policies and programmes. Assuming that the duration of Parliament life is five years, it could be safely assumed that the successive six governments have pathetically failed to promote and develop the Sri Lankans exports as per the mandate given to them in terms of the EDB Act No 40 of 1979 in a competitive global trade environment. The revival of the EDC is a formidable far-reaching intervention by the present government, as the need of the hour is to generate foreign exchange by exporting Sri Lankan commodities. No doubt that His Excellency’s inaugurate address would have sent a chilling impetus on the members of the EDC and other stakeholders, as there had been no forceful policy and administrative interventions from the head of the country for almost three decades.

 

The role of the EDB

The EDB is a brainchild of the late Lalith Athulathmudali who foresaw the necessity of a national policy-making body, at the highest level of governance, to facilitate the development of export oriented economy with the advent of the free-market economy in 1976 and it was possible for his to bring an legislative enactment No 40 of 1979 giving birth to the EDB. By virtue of the provisions of the Act, the President of the country is the chairman of the EDC ably assisted by the Ministers in charge of Trade, Shipping, Industries, Agriculture, Plantation Industries, Textile Industries, Fisheries, Finance, Foreign Affairs, Planning and Rural Industries. In its formative years, the EDB played a catalytic role in promoting exports and the award of the annual presidential awards have had an appreciable impact on the export-oriented institutions. It is a moot point why this vital institution (EDC) was forced to a backseat over the last 28 years and the Ministers in charge of Trade should be totally held responsible for their lackadaisical attitude for not invigorating this vital mechanism. Of the Ministers in charge of Trade, Minister Rishard Badudeen had steered the Ministry of Trade for a considerable period, out of the 28 years, but he appeared to have lacked the foresight to set in motion the EDC and as a result the country lost a cohesive and coordinated approach in generating millions of foreign exchange to the national coffers. With the abandonment of the annual presidential award scheme, the exporters have lost enthusiasm and drive and it would be more correct to say that the EDB has been a rudderless ship drifting without a captiain over the last 28 years.

 

Quality Standards for Imported

raw materials

It would be pertinent to revisit some of the critical issues touched upon by the President at the first meeting of the EDC last Wednesday. The President has emphasised that the import of raw materials required for value added products should meet the highest quality standards under strict supervision. It is quite true that a substantial quantity raw material imported to the country annually do not meet the required quality standard. Take for instance the low quality of pepper imported during the yahapalanaya regime under the guise of re-export after value additions, when the country is saddled with a glut situation of pepper and lack of remunerative prices for pepper cultivators.

 

Pepper Industry

With the surge of world production of pepper since 2017, inevitably there has been a deleterious impact on Sri Lankan pepper and the resultant scenario was that pepper prices in Sri Lanka crashed to $ 2,800 from $ 3,800 per tonne. Right from the second half of 2016, pepper prices have seen a falling trend. It was worse in 2017, 2018 and 2019. In this context, what was the rationale to import low quality of pepper from Vietnam and dump them in the local market thus depriving the local pepper farmers. Had there been an EDC in operation, this high-handed scenario would have never taken place. It is quite clear that the non-existence of EDC had given unbridled powers to the Minister in charge to manipulate the pepper market at the cost o

f the interest to the country and the local pepper growers.

It is well known that the demand for local pepper plummeted drastically when the market was flooded with inferior imported pepper and the pepper growers insisted grievance to discontinue the imports of pepper did not fell in deaf ears of the minister! Alas, In the year 2018 alone, 3,519,083 Kg had been imported to Sri Lanka from Vietnam, Indonesia, Brazil etc. One could just imagine the pathetic situation faced by the local pepper industry in this vicious cycle in the absence of a national body, such as the EDC.

 

Rubber Industry

Not only the quality but also the quantity of raw materials matters. It is alleged that rubber latex is imported to Sri Lanka by leading rubber manufacturing companies in excess of her actual requirement as there is a shortage of rubber latex in the country for value addition purposes and export. The statistical information book released by the Ministry of Plantation 2017 says that Sri Lanka imported quantity of RSS sheet rubber 43,727 Mt to overcome the scarcity of natural rubber to meet demand of rubber product manufacturers. Compared to RDD export of 2,940 Mt, the import quantity is much greater Thus, in 2017 total import of NR was 61,801 Mt with the corresponding CIF value of Rs. 15.888 million.

As in the case of pepper, the prices of rubber in major rubber growing countries such as Indonesia, Malaysia, Thailand, Vietnam, China and India have hit low bottom prices due to lack of remunerative prices in the world market and this has compelled our local manufacturers to import rubber latex from countries rather than buying rubber from the rubber smallholders. It is alleged that a well-planned ruse is in operation to release part of the NR consignment to the local market through the backdoor, depriving the livelihood income of the small holders of the country. Hence, it is utmost duty of the EDC to take an urgent decision not to give a blanket approval for the import of natural rubber, thus killing the local rubber industry. If at all, the import of natural rubber is required, it has to be vetted by an expert committee representing the Ministry, EDB, Customs, Ceylon Rubber Traders Association, Ceylon Chamber of Commerce, Ministry of Industries. In deciding the quantum of natural rubber to be imported, a mechanism to be designed not to exceed the quantity surpassing the industrial rubber produced and exported. This is the only way to nip this racket in the bud. The members to be appointed to the committee should be above suspicion similar to that of Caesar’s wife, as the unscrupulous players resorted to this high-handed racket are capable of influencing any untrustworthy member of this committee. Trust this proposal will receive the urgent attention of the EDC at the next monthly meeting.

 

Rubber Industry is in the verge

of extinction

The foreign exchange generated by the traditional three crops, namely tea, rubber and coconut used to play a dominant role in the Sri Lankan economy but the dominance of the rubber sector witnessed an alarming trend during the last 25 years as evidenced below.

It would be crystal clear from Table 1 that the annual rubber production has been on a decline for the last eight years and this downward trend is 10% per annum. (Insiders say that the annual production given in the year 2017 is cockeyed, given the unprecedented downfall in the production over the years and the Director General at the time of retirement, prior to taking up a foreign assignment camouflaged the of figures to his advantage). It would thus be seen that the local rubber industry is in the verge of extinction at the present adverse trend of 10% and it will completely routed out from the Sri Lankan soil by the year 2026, if drastic action is not taken to extricate the industry from the bottomless precipice.

The rubber sector is characterized by a series of professional maladies by low productivity, low profitability and low efficiency of operations, alienation of the smallholders from the cultivation due to lack of remunerative prices, dearth of tappers, non-supply of agricultural inputs on time, non-releasing of subsidy payment for new planting and replanting on time, gradual demise of the farmer societies and Group Processing centers, and the high priority being given to subsidy aspects over extension facilities, appointment of non-agriculturist to manage the institution ( Rubber Development Department) for the last 25 years with the amalgamation of the Advisory Services Department of the Rubber Research Board with the Rubber Control Department.

This deterioration trend of the collapse of the rubber industry commenced almost 25 years ago with the termination of the extension services to the rubber smallholders. The absorption of the services of the extension officers hitherto functioned under the Rubber Research Board to a newly created Rubber Development Department was the bane of the downfall. The shortsighted government bureaucrats and the Treasury conveniently were of the view that the rubber smallholders could be easily motivated by way of subsidy payments at the cost of extension services backed by research. The end result which we witness today is the result what we witness in Table 1.

 

New Institutional Arrangement

It will be well-nigh impossible to save the rubber industry unless a radical institutional shake up is made with priority being given to research and extension. It is my considered opinion that the EDC chaired by His Excellency would take a policy decision to create a new institution for the rubber sector.


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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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