Business Times

Jostling over CEPA

In what was perhaps a rare sight in the streets of Colombo, at least a dozen of Sri Lanka’s high-level corporate chiefs including the likes of Micky Wickremasinghe from Ceylon Biscuits and W.K.H Wegapitiya of Laugfs, joined several hundreds to protest against the proposed Comprehensive Economic Partnership Agreement (CEPA) with India.

Triggered by concerns that India is pushing for finalisation of the pact in an atmosphere where it is now seen playing powerful godfather to small neighbour (otherwise why should Basil & Co run to Delhi whenever a crisis emerges in Sri Lanka?), small and big businessmen and other professionals including doctors and lawyers got onto the streets at the Liberty Plaza roundabout in Kollupitiya urging the government to refrain from signing the pact as it was apparently against Sri Lanka’s interests.

The CEPA is an extension of the Indo-Lanka Free Trade Agreement mainly to allow the flow of services between the two countries. For the past few years, it has been held up by concerns by Sri Lankan groups that the proposed pact is heavily weighted towards India and Sri Lankan companies and professionals may suffer as a result.

Before getting into the nitty-gritty of the agreement itself, it’s important to list a few crucial points that led to the protest and its aftermath. What triggered the protest, so we are told, is that at a seminar in Colombo organized to mark a decade after the Indo-Lanka Free Trade Agreement (FTA) was born, local industrialists expressed concern over the CEPA and its impact on Sri Lankan businesses and professional services. At a session where these concerns were expressed, an Indian High Commission official had hinted that it was only a few companies that were complaining about the CEPA and that should not be a hindrance to the industry at large who would benefit.

Obviously annoyed, a group of businessmen got together and organized the protest in an attempt to alert the public on the dangers of its provisions. That’s not all. The group was then given an audience by President Mahinda Rajapaksa who assured them that the government will not sign any agreement that is detrimental to Sri Lanka’s interests; trade, business or otherwise.

Now the curious part of this episode that ended happily with the presidential assurance is that generally any protests or demonstrations near Temple Trees are dealt with a firm hand by the police. Protestors are chased away; water cannons aimed at them and charged by baton-wielding or tear-gas canister-armed cops. Now has the president ever been as obliging in the past as he did to the group of protesting businessmen and their supporters? Maybe they were not as intimidating as university students , public sector workers or minor hospital staff? Nevertheless has he been ‘kind’ enough like in this instance to entertain even a small delegation from protesting groups in the past – on the same day of the protest – to listen to their complaints?

On the other hand how did a group of businessmen within a few hours mobilize busloads of young protestors on the streets? Was there a hidden hand behind the demonstration? It is reliably learnt, that a government agency orchestrated the move and brought in people from a state-sponsored youth movement for the protest. Some of the businessmen in the protest are also known to be strong backers of the Rajapaksa administration.

Was this meant to be a signal to India that Sri Lanka is not ready to sign the CEPA as yet, amidst pressure on Sri Lankan authorities to get it on track? India is very keen to wrap up the CEPA and this was part of the reason for recent visits by Foreign Secretary Nirupama Rao. India is concerned over China’s growing influence here and that too on loan-based deals whereas a lot of Delhi’s support is coming from grants (free money). A railway track deal in which China is involved is also a cause for concern. India is also helping in the railway sector. The President visits India next month and discussions on CEPA, among other issues, is on the agenda.

Besides that what are the pros and cons of an agreement with India. While Sri Lanka has always opened the doors to trade, investment and travel from India, it’s not always that Sri Lanka enjoys the same, equal benefits. For example, it’s quite difficult to start a business in India (ask Ceylon Biscuits Wickremasinghe whose efforts to buy an Indian biscuit company was doomed from day one.

To be fair however the Brandix entry into running an investment/manufacturing zone has been smooth, so has the Aitken Spence experience in managing and part-owning a few Indian resorts); and getting a visa to visit India is cumbersome (for journalists it’s extremely difficult). It’s as difficult as trying to visit the US or Europe. Sri Lankan businessmen have always complained about this too. But here we happily give visas on arrival as Indian tourists are the best thing that has happened to tourism-starved Sri Lanka!

So will Sri Lanka get a good deal from the CEPA? Yes everything would be clear and as beneficial as possible for both sides as per agreement. However does everything work with clockwise precision and to the law in Sri Lanka or does influence and powerful interests override any law, regulation or rule?
It is in this context that concerns about the CEPA should be addressed. While everyone has a right to the service he or she wants, equally important should be a level playing field. Indian companies with a vast array of resources and economies of scale can easily swamp our markets and kill the local industry unless there are safeguards, the same way the Indian economy has zealously guarded against the entry of foreign companies.

On this page, we have a commentator strongly making the point that most of those protesting against the CEPA don’t have a clue about its contents. Maybe he’s right -- but if we take the argument further, even the best of laws and regulation don’t work here. What works however are the interests of powerful lobby groups and big political funders. Now can the president or his government give an iron-clad assurance that any CEPA agreement which has the interests of all Sri Lankans will be worked to the letter of the law? What is important at this moment is clarity.

The CEPA agreement is yet to be available for public scrutiny while only a few have access to the document, and there lies the problem. No one knows what exactly is contained in the agreement and in such a situation, there are concerns, worries. In recent times, there have been instances where proposed government policy has been open for public debate and access. Transparency is the key and the same principle should apply here. Otherwise the protests will continue –justified or not.

Top to the page  |  E-mail  |  views[1]
SocialTwist Tell-a-Friend
Other Business Times Articles

Lankan entrepreneurs protest against CEPA

BOC will list stockbroking firm
4th richest man in town
Extra 50 cents cost per call for Telcos
Ceylinco Insurance AGM held sans Kotelawala
New laws to revive sick companies, Rs 100 billion in assets
Comment - Jostling over CEPA
CEPA, trade-in-services and ignorance
10th anniversary of Indo-Lanka FTA: No trade pact can be perfect
Vasu takes on telecom firms over phone tarrifs
Dubai budget airline starts flights to Colombo from June 23
More women in hotel biz, thanks to Spanish efforts
Oman Air expanding fleet
Six new bank branches in the north on June 7
Samsung expanding market presence in Sri Lanka
Horana Plantations net profit up
Agenda? Just family connections with Sri Lanka – Vijay Eswaran
A&E partners Moratuwa University’s Dept. of Textile and Clothing Technology
IMF tranche due in 4 to 6 weeks
Union protests over use of EPF funds in losing stocks
Derivatives - weapons of mass destruction?
Fitch takes rating action against six Lankan Regional Development Banks
Former Malaysian PM to head Lankan Business Forum
Cathay Pacific Airways offers new Singapore package
Unilever renovating schools in Mannar and Vavuniya
Will the Sri Lankan economy take off?
Ethnic strife and good governance – lessons from Singapore
CCC looking to link with Indian business to use Indo-Lanka FTA
Construction Chamber to felicitate new minister
Mobitel offers Facebook access free-of-charge for one year
Microsoft's new SL launches "Office 2010" used by 8.6 million
New Bitumen product that would last Sri Lankan roads for 30 years
LOLC appeals to SEC regarding broker licence
First Capital Holdings reports record profit in 2009-10
Cargills increases annual profits, new MD appointed
Ceylon Continental hotel company reports loss
Hemas Power increases quarterly net profit
Garment industry needs more preferential trade pacts
Sri Lankans debate over a tea hub or not
5S Technique improving productivity
Allianz insurance opens Kandy branch
PBSS opens in Jaffna
SLT donates 10 beds, mattresses, etc to Ratmalana Blind School
Sri Lankan Tax Chief Mahinda Medagoda retires
Sustainable (economic) development needs good planning, sound economic policies


Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2010 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution