27 April 2020 04:46 am Views - 1302
Ranil Wickremesinghe in an interview with ‘The Hindu’
Q Well before the COVID-19 crisis hit us, you have been an advocate of greater regional cooperation. How can it help at such a time?
You see, this is a good time for a regional co-operation programme. This is a global pandemic without a global
We must treat this as a humanitarian issue and come up with a regional response. Maybe one or two countries, for instance India and one other, could put up a proposal, which then can be looked at by others, and possibly amended. Let us all work together. We [Sri Lanka], for instance have a good public health system. So has Kerala. We can work together on that.
The issue then is how do you handle it in the northern part of India. Then, what happens in Nepal has a bearing here. Except for Sri Lanka, Bangladesh and the Maldives, all the other countries have mountainous areas – whether it is India, Pakistan, Nepal, Bhutan, Afghanistan. I think this is a good time to work on this and being a humanitarian project, everyone can come around it. I would say SAARC, because as far as BIMSTEC is concerned, the ASEAN countries are already working out a programme. That would take two other BIMSTEC countries out. So, within SAARC we should work.
"I must tell you that the ambulance service that Prime Minister Modi gave at my request –we have to thank him for that, without that it would have been much more difficult"
Q You emphasise the SAARC’s role in combating COVID-19. Countries in the region have each pledged funds – Sri Lanka has pledged $5 million, for instance –to the recently set up SAARC COVID-19 Emergency Fund. However, each country is administering its funds based on requests made bilaterally, rather than through a common pool.
There has to be a common centre. The SAARC Secretariat and someone who is in-charge. The Secretariat itself has limited staff, so you must have someone in charge of it. I think it may be better if they are placed somewhere more centrally, working with relevant medical authorities.
We should also ask countries such as Japan for contributions. I am sure Japan would like to come in. Any other country as well –whether it US or China or anyone else willing, then the World Bank, ADB [Asian Development Bank].
We should get together and work on this. India is a member of BRICS, so let them also make some contribution. That would set an example. The EU is still fighting on a EU fund.
Q What do you mean when you say centrally located?
I don’t know if it can be handled from Kathmandu alone. If you can, well and good. But you may need another city. It can be Bengaluru, Colombo, any city.
Q But you see a greater role for the Secretariat too?
Yes, the Secretariat works with the one in charge. One person overall, who has everyone’s confidence, should deal with it. In regard to the Secretariat, the advantage is that the ambassadors accredited to SAARC are there. That is the plus point of Kathmandu.
Q When you spoke at The Hindu Huddle in February, you said Indo-Pak tensions shouldn’t pull back the SAARC effort. We already see some tensions in the SAARC COVID-19 response, with Pakistan saying the SAARC Secretariat should handle the funds.
You need someone in charge there. I’m not saying it is not the Secretariat. But India has a leading role. Pakistan can’t match India’s funding. Let Pakistan make a proposal and one another country should get together. Someone should make a proposal and give it to the Secretary-General who will talk with the others, and then we finalise it. Let there be a humanitarian SAARC response. India has a role, so does Pakistan. Actually, the most advance medical knowledge in SAARC is with India, Pakistan. We [Sri Lanka] also have some, Bangladesh has some, we have to work together.
If there is a big natural disaster in India, whatever the problems are, Pakistan will speak. When there is one in Pakistan, India will speak. Look at this as a humanitarian crisis. And certainly, start from Kathmandu, but then you have to look somewhere else too. I mentioned Bengaluru because in Bengaluru, Hyderabad are where a lot of testing is being done. If they want it elsewhere, that’s okay too. SAARC will have to decide where exactly it has to be, it is not something to fight over, it is a matter of convenience. It is not India-led. The effort is SAARC-led, but let India give the input. Similarly, let Pakistan, Bangladesh give theirs. Let the Secretariat put it together. We have to look at issues pertaining not only to health, but also to our economies. Like the problem of debt, which is heavy for India, Pakistan and Sri Lanka.
"Keeping enterprises going big or small –if they collapse, the whole formal sector goes. It’s the total economic activity that is at stake"
Q The World Bank’s Chief Economist for South Asia recently told The Hindu that managing migrant returns, service sector revenue losses and ensuring food security for the poorest will emerge key priorities for the region. Do you agree with the assessment?
Well, there’s one more. Keeping enterprises going big or small –if they collapse, the whole formal sector goes. It’s the total economic activity that is at stake, other than production of safety [PPE] suits, gloves and medicines. I think SAARC can also develop a standby industrial base on this.
Q How so?
We could start companies to start manufacturing. Of course, when they start their prices may not be that competitive, but we decide on it and everyone buys from one or two companies earmarked for it.
Q Job creation will also be a major challenge, isn’t it? Especially since migrant workers from the region, who were working in West Asian ountries, are returning and may not go back.
We have to work this out. Remember tourism is big in the Maldives, Sri Lanka, parts of India, Nepal. How do you manage that?
I would look at some of the climate change issues, and also modernising agriculture. There’s a good chance that we have here. The whole supply network and all those things are worth looking at. Basically, we have got to create jobs. You have to have helicopter money. The thing is the problem we have with our debts and the amount we owe to the international sovereign bonds [money market]. So, it is more a question of dealing with the London Club than the Paris Club, but I think a common approach would help us.
Q I was going to ask you about the debt. For Sri Lanka, while the bilateral debts are perhaps negotiable, the terms of the sovereign bonds that are due for repayment soon are ruthless, aren’t they?
That’s a big one, yes. That is why you can’t do anything on the rupee debt. We’ll have inflation. That is one thing we can work on as a unit. It’s a humanitarian issue which has a health component and an economic component. Both are very important. And we have to look at Afghanistan, where fighting is going on. Unless you can bring ceasefire completely, there could be a spill over from Afghanistan into Pakistan, into Nepal, into that part of India.
Q You spoke of modernising agriculture. How is the region placed in terms of food security?
Look at the big increase in population, take for example from Pakistan to Indonesia. Then look at countries from Saudi Arabia down to South Africa on the Indian Ocean, you have to get ready for this. It has to be very scientific farming, and we might as well get ready now. Your country has some very good people doing scientific farming, but then there are others who are traditional. You even grow barley and are making your single malt whiskeys.
Q What are the prospects for re-activating the tourism sector in the region?
We need to work on regional tourism, we can keep moving around and encouraging that. Indians come here, they are the largest [source market], Pakistanis also come here. To boost tourism, we need more testing, and the economies must go ahead, because tourists need money. People aren’t going to come from a distance. Europeans may not come. Maybe some from the Middle East. But this [region] is where the numbers are.
Q You referred to Sri Lanka’s strong public health system earlier. Sri Lanka’s response has been relatively effective mainly because of the inherent strengths of your public health infrastructure. Do you think going forward, there’s a need for greater public investment in key areas like health?
We have to go in for preventive health. But again, we must look at the shortcomings. At the moment though we have been strong on having the lockdowns, we have not got on to testing. Testing is what we all have to do. If governments get into testing, that is a big opportunity to create employment – while addressing the need for medical equipment, the demand for hand sanitisers must be looked at. India is a big market, so is Pakistan, so is Bangladesh – now that’s larger than China.
Q More broadly, do you also see a potential shift in the region towards expansionary fiscal policy, a basic income? We see that conversation picking up globally.
You have to. You have to move away from some of those [past policies]. If you look at the IMF reports, they say it is bad this year, it might pick up next year. I don’t know, if we don’t find a remedy quickly, next year is also going to be bad. We should plan for two years. That is why I say this humanitarian response from SAARC towards COVID-19 is something we should really develop.
"To boost tourism, we need more testing, and the economies must go ahead, because tourists need money"
Q When you say move away from some established policies, what do you mean?
You have to look at some sectors that you are going to pump money into. We have focussed on inflation, but inflation is really down. Then, the question of raising money – commercially and otherwise, how much can the London Club give us? That is really the big issue for all of us. And the fact that for India and Pakistan, it is a big amount, maybe a few billion dollars. So it is better to go as a team and take it on, rather than go individually.
Q Speaking of the pressures of the international money market, do you think it’s time to rethink the prevailing economic model?
Well, the free markets have to flow. But some of the countries that are doing well [in their COVID-19 response] have a more social market economy. Germany – both CDU and the social democrats. And maybe in the next election they will gain at the expense of the extremists. Then, the Centre Party in Norway, they are our sister party. And New Zealand – whichever party is in power it has a more social market economy. So, wherever there was a social market –because they put in so much into health and education– the response has been good. On the other hand, countries like the UK and some of the states in the United States have been cutting down on health expenditure, and they are paying the price for that.
When we were in government during the last five years, we put a lot into health. But there are areas we have to now look at, like intensive care. And stronger preventive health measures, where we have to strengthen the testing parts.
I must tell you that the ambulance service that Prime Minister Modi gave at my request –we have to thank him for that, without that it would have been much more difficult– and the India-funded hospital in Dickoya [Central Province] has made a vast difference to areas without any access to medical service. The India-aided infrastructure projects –the houses in Jaffna, in the hill country– all that helps in this situation. Now those residents aren’t living in line rooms, packed next to each other.
Q How do you think COVID-19 will impact the global order? China and US, two of the most powerful countries have been hit so badly.
Europe is going to get the worst of it. And what will the UK do? They’ve lost a market, and in this situation, you can’t gain a market in a hurry. What President Trump is trying to do is to keep the economy going so he won’t be second-guessed by China. But China actually had a lockdown and they are now re-starting. The problem for China, like all of us in different ways, is that the markets are in the western world.
Until the western world picks up, we have to move towards other markets also. I think India should reconsider coming into the RCEP [The Regional Comprehensive Economic Partnership], even at a later stage. I realise the difficulties, but it is not as bad as some of the enterprises make it out to be. And you are strong. I think you have to come into RCEP and then we also can all join in and create that market. The Japanese, with the Pan Pacific mechanism, is already creating one for the Pacific and East Asian nations, who are very developed.
So, you get RCEP with India and China in it --India should ask for some status, even we can go into it, we can go even faster than India– it can be developed.
I think the Economic and Technology Co-operation Agreement (ETCA) [proposed between Sri Lanka and India] should come in. By now the present government should realise the value of it. With that and RCEP, we can develop this gradually.
America is a big market and President Trump is trying to get the economy going, but there is a lot of controversy between him, the governors and others. But Europe is going to find it difficult. Germany can, but Italy, France, Spain in EU, and UK are going to find it difficult. Russia is also affected, and the oil producing countries.
Q You have commented on the world economic order. Politically speaking, what is COVID going to leave the world with? There is already some concern over democracy in times of this pandemic.
I don’t think COVID can affect democratic space because what has happened is people are being more open. In the non-democratic countries also, they are providing more space. What’s happened in Asia is that at the political level we still haven’t got a regional order. We are moving towards that. Even on the East Asian side.
The example is EU, that is coming under stress. Second of course is though we have national governments, there was always a leadership provided. I remember after 9/11, they got together. And in 2008, at the end of President Bush’s period, he got everyone together and as a result the crisis was contained within two years. On climate change again, US came forward at that time, President Barack Obama did. But this time, it is missing on all sides. The move towards a multilateral political order will continue and may get strengthened, but that is also in the long-term.
Q What is your view on Sri Lanka’s Election Commission scheduling the general elections on June 20? Many opposition parties have opposed the move.
Looking at the numbers now, I am not sure, it is left to the medical experts. What we have suggested is keep testing. Start with a minimum of 3,000 tests and then you will know. If life comes back to normal you can hold elections. And you should. We also want elections. But let the testing go on. Firstly, the economy must start. People are not going to come running out and vote when they can’t eat. The economy must start. And with that, people will then come for elections. The key is testing, testing, testing! And we are saying start with 3,000. That is not enough. But at least build the capacity for that and then keep doubling it.
Q At the moment Sri Lanka does about 1000 tests a day, isn’t it?
Yes, they are now trying to come to 1,000. But they have to keep increasing.
Q Are there enough testing kits?
You can buy, there’s enough in the market --you may have to pay a bit more-- even if it takes a bit of time. What if there’s a second wave? Or a third wave? Japan is looking at a second wave, South Korea is looking at a second wave, Germany, China, England are talking about it.