Eshuffle xpected

Nts giving a wide role for nomy; President esday

have been given. One such MP was Harshana Rajakaruna who at a UNP parliamentary group meeting declared that not even ten jobs had been given.

The backdrop in which these developments are taking place has also been cause for concern. Main among them is the law and order situation with both crime and drug abuse on the upward spiral. So are road accidents. The murder rate is on the increase. Recently, a Police Narcotics Division team was shot at in Piliyandala by drug traffickers, killing one policeman. His colleagues have been hospitalised. Strike threats by trade unions are mounting. The Government Medical Officers’ Association (GMOA) has warned of another work stoppage together with a number of like-minded groups. They are said to include petroleum sector trade unions. There are also concerns over small groups attempting to create racial tensions. An increase in these trends, some worried Government parliamentarians complain, tended to create the impression that there was “no governance” in the country and “indiscipline was on the rise.”

These developments apart, the Government is also facing serious challenges on the economic front. It was just last week that President Sirisena asked Premier Wickremesinghe not to go ahead with the Concession Agreement (CA) with the Chinese company for the Hambantota Port project, as exclusively revealed in these columns last week. This was after Sirisena, who had earlier not been given a copy of the CA, later believed that many provisions of this legally binding document could be to Sri Lanka’s detriment. It has been jointly worked out by Ministers Malik Samarawickrema and SarathAmunugama. Sirisena is to order a further study and a renegotiation is not ruled out.

Minister Amunugama, who headed a Cabinet subcommittee on the Hambantota Port project, told his ministerial colleagues in a note last week that his Committee “had several consultations and further reviewed the already approved Concession Agreement together with the observations and comments made by members of the Sub Committee, the Sri Lanka Port Authority (SLPA) and the Project Committee (PC) consisting of senior officials of the SLPA representing cross-functional disciplines.”

He added: “Matters pertaining to technical-commercial nature were deliberated at length and a substantial number of issues were resolved and incorporated, as deemed appropriate, into the Concession Agreement with the concurrence of the investor(China). There are several more issues being deliberated between the parties and amicable resolution is expected shortly.

“A Road Map on the implementation of the Cabinet Decision was developed and actions followed through. Fair progress is made, except in regard to completion of due diligence by the investor with the support of SLPA. It is to be understood that the process is now in progress. Meantime, the PC/SLPA has raised twelve critical concerns with differing views from the covenants agreed in the already executed Framework Agreement.”

Ahead of his visit to China, Minister Samarawickrema, who has been responsible for a number of the Government’s controversial proposals, sought approval at their meeting on May 9 from the Cabinet of Ministers to sign two different documents in Beijing. One was the Framework Agreement between Sri Lanka and China “for the promotion of Investments and Economic Co-operation.” Details of this Agreement, where there were differences in his draft as the line Minister and that of the Chinese, were revealed in these columns last week. The second Agreement was “Signing the Outline of the Medium and Long-term Development Plan for Investment, Economic and Technological Co-operation.”

The Cabinet of Ministers gave approval for the two proposals. However, they added that such Agreements were subject to the conditions: That, separate Cabinet Memoranda pertaining to the priority projects referred to in the list attached to the above mentioned “Outline of the Medium and Long-term Development Plan for Investment, Economic and Technological Co-operation,” will be submitted by the respective Ministers, so the Cabinet, prior to entering into formal Agreements in that regard; and That, signing of the formal Agreements pertaining to the relevant projects referred to above will be done in consultation with the relevant stakeholders. The two strong conditions laid down by the Cabinet of Ministers (see above) makes clear that Minister Samarawickrema failed to obtain blanket approval for all projects -- a move that could have widespread repercussions both in terms of Sri Lanka’s sovereignty and economic well-being. This would have meant that no other Ministry needs to be consulted. In fact, the agreement he signed for an “Outline of the Medium and Long term Development Plan for Investment, Economic and Technological Co-operation” has raised eyebrows both in Sri Lanka and abroad. Firstly, the two documents have not been released for study by the Sri Lankan public or Parliament.

Among the questions asked is how the Government of Sri Lanka, in terms of the Agreements signed, promise not to alter existing administrative permits since there are prospects of the Government changing at one time or the other. The move, as one source familiar with the processes pointed out, amounts to the coalition Government issuing guarantees for all future Governments. The source added “it is a funda- mental tenet that policy changes are the sole prerogative of the Government in power.” How can that be subjected to another party outside Sri Lanka, the source asked.

Another instance pointed out is how the two Agreements say that the Sri Lankan side shall establish special cross-departmental coordinating and decision making mechanisms. The source pointed out that this is “one sided” and added that in effect it lays bare a lacunae in the Sri Lankan system since Beijing would be placed on a higher pedestal. The international practice is that coordination mechanisms should be there on both sides largely on equal terms.

Another area that could cause strategic implications is Minister Samarawickrema agreeing to include communications. This would, cover telecommunications and IT including mobile communications and digital technologies. The Agreement says, “Both parties agree to enter into policy exchange in mobile communication, information and communication technology, Internet and other areas, strengthen the co-ordination and co-operation at the International Telecommunication Union and other international organisations. The Chinese party will strengthen the training and capacity building for Sri Lanka to further promote the application and penetration of new telecommunication and digital technologies in Sri Lanka. Both parties will support enterprises of both countries to enter in to cooperation in the areas of international voice and data services, and improve the technological and management level in areas covering information and communication technology, and digital technologies.”

Among other highlights of “The Outline of the Medium and Long-term Development Plan for Investment, Economic and Technological Co-operation” are: Both parties agree to strengthen the investment cooperation in tourism area, explore cultural heritages, particularly deeper significance of the “21st Century Marine Silk Road,” encourage enterprises of both countries to jointly develop tourism projects and tourism products, and support Chinese enterprises to invest in construction and management of hotels in Sri Lanka. Both parties will support Chinese enterprises to participate in the investment and construction of housing reconstruction and real estate development projects in Sri Lanka. The Chinese party will continue to encourage Chinese citizens to travel in Sri Lanka and assist the Sri Lanka parties to develop the Chinese tourism market. The Sri Lanka party undertakes to protect legitimate rights and interests of Chinese investors in Sri Lanka, and respect Concession Agreements, Commercial Contracts and other documents signed by the Government of Sri Lanka with relevant institutions and investors, not to alter existing administrative licensing due to Government change or other factors, and not to apply law and policy adjustments to the previous cases. Encourage enterprises of both parties to participate in the investment, operation and management of ports, airports and other infrastructure projects by means of joint ventures, concession and other forms in Sri Lanka. Encourage both parties to invest in and construct petroleum and natural gas storage, transport, refining, chemical, and processing and other projects in areas near ports. Further support the participation of Chinese enterprises in the construction of agricultural infrastructure, reservoirs, irrigation channels, field roads, marsh gas systems and other facilities, so as to gradually improve agricultural infrastructure conditions in Sri Lanka. The Chinese party agrees to continue talent exchange, training and other aid projects, deepen talent exchange and technological training between China and Sri Lanka in politics, education, tourism, culture, science, technology, medical service and other areas, and deepen the friendship and mutual trust between both countries in all areas. It is abundantly clear that almost all the projects envisaged in these two Agreements are not joint ventures. Those are cited as “priority projects,”

Moreover they are to be financed using Chinese loans, which like the Hambantota Port project, could add to Sri Lanka’s debt burden. A fuller enforcement of the Agreements would also see a substantial Chinese population operating in Sri Lanka. Another worrying provision is one which may amount to possibly outsourcing certion policies of the Government of Sri Lanka to China.

This begs answer to the question whether Minister Samarawickrema directed an official study of all aspects that may affect Sri Lanka before making his controversial recommendations to the Cabinet of Ministers. Or was it his own initiative alone? Did a Committee or a Committee of officials examine the provisions? Quite clearly, most ministers have not studied the small letters or the fine print like many do when it comes to agreements or mortgages. A clear read of the Agreements leads one to the inevitable conclusion that in every aspect of the country’s economy, Sri Lanka has assured a Chinese a role.

How will this impact on countries in the region, like India? There is a hue and cry over the proposed Economic and Technical Co-operation (ETCA) with India but the provisions of the two Agreements in question are much broader and raise several questions. Quite clearly, Ministers and officials do not seem to be learning from past experience. Negotiations over the Hambantota Port project have been protracted in the light of irregularities being discovered from time to time. Now, the Concession Agreement has generated controversy, among other matters, over the 99-year lease period. Issues have come to the fore much after the Cabinet of Ministers gave approval – a move which indicated that there was no closer scrutiny or study. Whilst this is going on, two more Agreements have been signed with China without closely studying the implications. It is doubtful whether the two caveats introduced by the Cabinet of Ministers would bring about the required checks and balances. There are fears, mostly among ministers, that proposals can slip through to be discovered only when the damage is done.

Thus, even after Sirisena effects a ministerial reshuffle on Monday, there are greater challenges for him. The change in itself would become a continuation of the cracks within the Government which has become apparent. Another area for concern is a move by SLFP ministers to reject a call for the abolition of the Executive Presidency. The recommendation is one of the highlights in the Steering Committee report on Constitution making which the SLFP “Constitution Committee” will take up for discussion tomorrow at the party headquarters. It is headed by NimalSiripala de Silva and includesDuminda Dissanayake, Mahinda Amaraweera, Mahinda Samarasinghe, Susil Premajayantha, Anura PriyadarshanaYapa, DilanPerera, Dayasiri Jayasekera, FaiszerMusthapa, John Seneviratne, Sarath Amunugama and Lasantha Alagiyawanna.

On top of that, many a governance issue continues to haunt Sirisena. It was only Friday that Sirisena asked Premier Wickremesinghe and Law and Order Minister Sagala Ratnayake to proceed to Muhamalai near Jaffna where a shooting incident had led to a rise in tensions. Details of the story appear elsewhere in this newspaper. So, for Sirisena, there is a two-day respite Down Under. With the reshuffle then behind him, when he returns, there is little doubt he would have to get on top of the situation.