Port City should be part of Sri Lanka Dr. Harsha de Silva

Samagi Jana Balawegaya (SJB) MP Dr. Harsha de Silva in an interview with Daily Mirror shared his views on his party’s approach to the issue confronting Sri Lanka at the UNHRC in Geneva. Also, he responded to questions related to the Colombo Port City project and the move to ban chemical fertilizer and SJB’s recent meetings with the foreign envoys.
Excerpts of the interview: 

QRecently, you along with Opposition Leader Sajith Premadasa and MP Eran Wickramaratne met with the envoys of the foreign countries; particularly those from the west. What was it about?

Our party Samagi Jana Balawegaya (SJB) has good relations with all countries .We meet with the ambassador, regularly, when a need arises. We met with the envoys of the western countries on that day. We are meeting up with others. We keep our channels open with all the countries. 

QWhat is the outcome of the meeting?

We discussed about current situation in Sri Lanka. The current situation entails Covid, economy and the shrinking democratic space.  We see the matter involving our MP Harin Fernando as a crackdown on the opposition MPs who are expressing their legitimate views in Parliament.  That was one of the issues discussed. Generally, we discussed about the shrinking democratic space.  Also, we need to come out of the Geneva crisis. 
I categorically said at that meeting that the Geneva issue is a Sri Lankan issue.  I said at that meeting that we should come out of it as Sri Lanka, not as the government or the opposition. Mr. Premadasa seconded my approach.

QThe previous Yahapalana Government which you represented had an approach regarding the Geneva issue. The current Government has a different approach. What is your approach?

The whole human rights issue goes back to an undertaking given by then President Mahinda Rajapaksa in 2009 and the resolution which Sri Lanka actually won soon after the war concluded.  In that resolution, what we say is that we will take steps to address the allegations regarding human rights violations and the violations of the international human rights law. That is not wrong.  Then, Mr. Rajapaksa appointed the Lessons Learnt and Reconciliation Commission (LLRC) under C.R. de Silva.  The LLRC has many good recommendations.  As a matter of fact even singing the national anthem in Tamil is a LLRC recommendation. In the resolution, we talk about the implementation of the 13th Amendment in full.  Mr. Mahinda Rajapaksa was fully for it. He even talked about 13 plus.  The LLRC never accused of systematic violations of human rights by the Sri Lankan armed forces.  It said there was no evidence for it. Nevertheless, it said there had been instances where certain people had violated the law and they had to be investigated and acted upon.  For a start, the SJB is fully for the implementation of the recommendations of the LLRC, an undertaking given to the international community by MR.  As a matter of fact, the previous government did implement some of the LLRC recommendations. Singing the national anthem is one. It is a small thing. Then, setting up of the truth commission, the office reparation are there. Those are things that were meant to forge links with the different communities and, to the extent possible, compensate for losses.  Nobody has shut them down even now. 

Port City Commission Bill takes away Parliamentary control over Port City in fiscal policy

QIt means there is no much difference between the previous Government and the SJB. Do you agree?

It is very different.  For a start, the SJB’s position is that it will support the implementation of the recommendations of the LLRC report.  It is different to the previous government. What I said was that the previous government implemented some of the LLRC recommendations. I don’t want to slam the previous government. We are for a domestic investigation as the LLRC tells us to do. There is nothing beyond that. It is domestic investigation with international credibility. 

QThe Government has imposed many import restrictions, as claimed, to save foreign exchange and to boost local production. Also, there is a huge debt servicing bill.  How do you read the situation? 

The protectionist, import substitution model has not worked anywhere. It has failed everywhere including in Sri Lanka between 1970 and 1977. This idea originally came about after the World War II. The person who is really credited for this is Prof. Raul Prebisch, a Latin American economist. The idea was to become self-sufficient, to produce domestically, and be less dependent on the developed world.  

That is a model only trying to bring in equipment that will enable these Latin American countries to manufacture capital goods that will then be used to manufacture consumer goods.  Each country tried it. They found out very quickly that it did not work.  Even big countries like Argentina and Brazil tried to produce everything domestically.  They could not get economies of scale.  When small countries tried to do it instead of trading with their neighbours they found that this model did not yield the expected results.  Then, Raul Prebish suggested the combination of Latin American countries instead of this model being implemented by the individual countries.   They tried to bring these nations together and tried to implement it as a group of nations.  That also failed.  This was tried in India, Sri Lanka. It was an utter failure. 

Port City Commission Bill takes away Parliamentary control over Port City in fiscal policy

QIn Sri Lanka we introduced the open market economy in 1978 in contrast to protectionism. It means this model has been in operation for more than 40 years.  But Sri Lanka has been unable to move beyond point in economic point.  Isn’t that system also a failure?

No.  It is not the failure of the model. It is the failure of the politicians who have not been able to understand the model.  When Ronnie de Mel, one time SLFP strongman, changed his thinking and joined the UNP, he implemented the original plan of this model.  He told me that he was a socialist at heart.  He said, “I want to make sure that what we created would really benefit the struggling people of this country,”

Now, China has  opened up its country since the time of Deng Xiaoping in 1977 or 1978.  When somebody asked him, he said famously, “It does not matter what colour the cat is as long as it catches mice. 

It has to be pragmatic. They have started from the coastal regions in the south of China and moved to other regions. Now it is going inland.  China embraced the policy of engaging with the world and has been expanding its share of global trade.  When India hit its rock bottom in 1991, it opened up. India has seen tremendous growth since then.  India, being a democracy, has not been able to move fast. Countries like Malaysia, Thailand, Bangladesh, Rwanda and East European countries are engaging with the world.  The countries that are closing up are really going nowhere.  You have to have the political courage and will to actually follow the model.  The reason why we haven’t been able to achieve what countries like Thailand and Malaysia have is the lack of political will to explain to the people what we need to do.  It is misleading to tell the common people that the government is capable of looking after all of them, engagement with the world is bad and culture, religion and way of life will be destroyed due to engagement with the world.  The 1978 opening up was only partial.  It liberalised the financial sector, the investment regime and industrialization in the western province.  We need a lot more liberalization.

• SJB is for implementing LLRC recommendations
• Supports domestication investigation with international credibility

   
QWhat are those areas that need  to be liberalised more?

For example, trade liberalizations. We cannot build a wall around this country. We have to build bridges from this country to the region and beyond.  If you look at your phone, you can see how many countries are part of it.  You will see the list is more than 30-40 countries.  The camera is made by Sony, the case in Thailand whereas the screen has a patent in New York.  It is produced in Vietnam under licence.   But, the chip is made somewhere else, the microphone in another place and so on. Sri Lanka is not in that list. That is because we have been told that trade is bad. 

We have been told that a Free Trade Agreement with Singapore will destroy Sri Lanka though, in fact, it creates flourishing opportunities for Sri Lanka. This is a cheap, politically oriented misrepresentation of facts to people who are gullible.    We need to liberalize trade.  Suddenly, I hear this government is talking about a Free Trade Agreement with China.   If they are against a Free Trade Agreement with Singapore, how can they talk about one with China? 

A Chinese professor once said that Sri Lanka should become part of a RCEP (Regional Comprehensive Economic Partnership).  When I vociferously stood for it under our government, these people opposed it. The Chinese professor is 100 percent right. I subscribe to it.  We must become a part of a regional trading bloc. 

• Sri Lanka, as a country, should come out of Geneva crisis
• Ban on chemical fertilizer the worst decision by the President

QThe Government says it imposed these import restrictions to boost the local agricultural production and to save foreign exchange. In that context, how do you view these protectionist measures?

It is a fallacy. It is not saving foreign exchange. We have to make foreign exchange.  Import is connected to export.  There is nothing called stopping imports and expanding exports.  It is a fallacy. It does not exist in the globalised world of the fourth industrial revolution.  Today, what we have is regional production network.  That is why you don’t find ‘made in Sri Lanka, made in China, made in Vietnam labels’.  We used to see made in Japan labels when we were small. Now things are not made in one country. 

I encourage the policy makers of this Government to read the works of Prof. Premachandra Athukorale and Prof. Sisira Jayakody. They have done years of work on why trade is good for this country, and why these kinds of huge non-tariff barriers stand in the way of regional production networks. 

There are two tools in agriculture. One is the macro picture and the other the micro picture.  We have archaic agricultural laws on the one hand. On the other hand, we don’t have a consistent policy of duties and tariffs on agricultural produce. Duties on Sugar and potatoes go up suddenly and come down again. The Government in September said its policy on sugar was to encourage domestic manufacturing, and to increase import duties from Rs.35 to Rs.50.  The same Government, two months later with no reference to the policy it laid down, brought it down to 25 cents. Now what is that? 

On the micro side, the farmer is faced with challenges of solving multiple interconnected issues- management of water given at ad hoc times, getting fertilizer at the correct time and choosing the type of crop to be grown.  The prices are so volatile.  Farmers have no way of predicting the prices to be. They don’t know how to store their produce and get working capital. Farmers have to fend for themselves in terms of all these. 

 I personally take pride in three things.  I tried to resolve, never having been the food or agriculture minister, them.  I tried to develop the ICT in the agriculture sector. That is to let the farmer get a sense of what the price is. I did it using my own private money.  That was in 2003. A farmer could make a telephone call and an automatic voice recording would say what the price was. I take pride in creating the first ever climate-control warehouse for agriculture.   The current Government even tried to stop that.  I have fought against. We are redoing this.  This one is the creation of Shakthi rice through a farmer cooperative body.

If they are against a Free Trade Agreement with Singapore, how can they talk about one with China?

QWhat is your view on the Government’s decision to ban the use of chemical fertilizer?

That is the worst decision by the president.  That is not the way you should do it.  There are hundreds of agriculture economists and plant chemists who have done research for years.  I am not disagreeing with the president that organic farming is good.  To get the kind of yields to feed 22 million people, you cannot go from chemical farming to organic farming in one day. It just cannot happen.  He said the farmers would be compensated for the loss of incomes.   But, you need rice to eat.  If you import rice from India or Bangladesh, it has more chemicals. 

QWhat is your position on the Port City Economic Commission Bill? 

The Port City must succeed. It will catalyse our next growth phase to create a knowledge based highly competitive economy at the centre of the Indian Ocean. It should become a dynamic hub that would attract the best global talent that will link Sri Lanka to the world and create national wealth. But, this draft law won’t do it. I have three main issues. One, the draft is to create a private company. The commission is actually a privately held corporate body run by five-seven commissioners appointed by the President. Two, the regulation is by the Commission. That is a recipe for disaster in today’s tough global anti money laundering environment. If we are to attract top financial names we must have credible regulation. Why do you want to remove the Central Bank from being the financial regulator? Who are you trying to attract? Three, this draft by and large takes away Parliamentary control over Port City in fiscal policy. For instance, the Commission can give a 40 year tax break to a casino and ‘inform’ Parliament it has done so. What nonsense is that? I mean the Port City has to be part of our country. It cannot be a part of another country.

When the then PM appointed me as the chairman of the steering committee of the PC, we had long discussions with stakeholders both public and private. We had a dozen State Counsel work on multiple drafts prepared under the Yuwanjan Wijetilleke working group on the law. We had experts including foreign consultants in Dubai and London and development agencies besides local private sector. We had a dozen State Counsel working on it. We had multiple discussions. It was an inclusive, dialogue –based effort. In our draft framework law the Commission was a public corporation and run under the BOI law. It was not a private entity. The majority of the commissioners were ex-officio like Secretary Treasury, Chairman UDA etc., and others appointed by the Constitutional Council. The Central Bank was the financial regulator. Parliament had control over law and fiscal policy. Actually, the draft law which Prime Minister Mahinda Rajapaksa proposed in June, 2020 was very similar to the one we prepared in 2019. But, the draft prepared by Secretary to the President Dr. P. B. Jayaundara and now before Parliament is totally different as I explained.

This law is ad hominem. No law should be centred around a person. President Gotabaya Rajapaksa has only 3 1/2 year left. He may go back to the US. But the PC lease is for 99 years. Who will the next President appoint as Commissioners? The one after that and so on? We have a problem there. We went to the Supreme Court to make sure that the PC belongs to us. It must be a part of Sri Lanka and the Commissioners have to be accountable to Parliament.

QWhy did your Government fail to enact it then at that time?

We had a draft framework law ready mid-2018. Then the coup happened. Then ,we had another draft in the middle of 2019.