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The Official e-newsletter of the Institution of Engineers Sri Lanka  | Issue 28 - March 2016
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Sri Lankan Professionals & Proposed India - Sri Lanka ETCA

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Sri Lankan Professionals & Proposed India - Sri Lanka ETCA - by Eng. Arjuna Manamperi
 

On September 17th, 2015 a watershed event was organized by a small group of motivated engineers ( SLEA - Sri Lanka Engineers Association) at the Foundation Institute to educate professionals of this country about the negative impacts of proposed CEPA ( comprehensive economic partnership agreement) with India that had been in the workings for years. ISL CEPA was withdrawn in the Parliament on Dec 9th by the Prime Minister. During that period, UPM ( United Professionals Movement) consisting professional bodies ( including IESL) covering all major professional disciplines was formed to help the country with a strong belief that professionals must take part in National Policy making as much as executing them. It is important to state that soon after forming UPM, with the blessings of IESL, Organization of Engineering Association ( OEA) was formed to gather all the engineering communities ( around 40) under one umbrella movement to strengthen UPM's collective efforts. Those are watershed events of the country's history since independence.

 

Having rejected ISL CEPA, in December 2015, the GoSL and the GoI, proposed a new process to enhance existing bi-lateral trade between the two countries called ETCA (economic and technology cooperation agreement). The significance of ETCA and now aborted CEPA is that both, for the first time proposed "service sector liberalization" and also "rectifying anomalies of the active FTA between the two countries". Furthermore, instead of working from a draft comprehensive agreement like CEPA, ETCA process starts with a proposed ETCA Framework Agreement ( UPM is not in favor of this approach) and initially limiting ( to be expanded in time as stated by both governments) service liberalization to two of the booming industries in Sri Lanka - IT and Ship Building with greatest foreign exchange earning potential and employment potential.

 

Sri Lanka GDP contributors ~ : 10% government revenue such as taxes, 7% agriculture, 60% services ( area proposed to be systematically liberalized under ISL ETCA), 23% industry ( investments hopefully to come in this and service area due to ISL ETCA and other FTA s between countries such as China). The GoSL planners who spoke with UPM said that if Sri Lanka becomes the second country ( Singapore is the other) to have trade liberalization agreements with India and China that many other nations would come to Sri Lanka to service those two big markets from Sri Lanka thus creating employment and economic growth because of our countries strategic location. Wishful thinking or not? Then why jeopardize our own professionals opportunities? Why do we want to create 1 million jobs when we need around 350,000 jobs? For whose future unemployed ( see below of Sri Lanka's population growth predictions )?

 

It is very important that the reader understand that UPM is not rejecting international trade agreements and service liberalization as possible solutions to country's economic woes. What UPM has categorically opposed is the lack of transparency in the process of negotiations between the two governments ( this has dramatically improved since UPM's active engagement with GoSL and at a national level to educate masses) and the hurried approach to establish a lose and dangerous ( legally) ETCA Framework Agreement prior to a detailed draft agreement like CEPA. The logic of this thinking should be obvious to a casual reader, however, UPM takes this position after detailed studies on its own and direct engagement with GoSL ( Ministries, Ministers, etc. since December ). We oppose the process and some fundamentals behind ISL ETCA. However UPM dialog with GoSL continues unabated as of now. UPM hopes that GoSL will accept UPM's offer to assist and strengthen Sri Lanka side's knowledge and capacity with very capable professionals way beyond what GoSL has taken to meet its Indian counterparts. Sri Lanka certainly is the "smaller" player by far in this arena, but our "collective professional might" could be an even match to the large Indian professional team to arrive at a sensible working partnership.

 

To understand where things are right now, please watch the video speeches of United Professionals Movement (UPM) - Rally to Protest India Sri Lanka ETCA "process" at Hyde-Park March 24th:

 
 

Please view. Think. If appropriate share. Join UPM cause from where ever you are. Propose thoughts to IESL digital SLEN or post them to the digital forum topic on this matter: http://www.iesl.lk/page-1560841/3516549

 

Also read the following Article in Sinhala: http://goo.gl/g5ILR0

 

If you are abroad and a professional made in Sri Lanka at one point...please take extra effort to share. We need Sri Lankan professionals abroad more than ever. Join us. We are taking actions finally as professionals to participate in nation building from policy stage. Predicament our country is in due to collective actions / inactions by all of us since 1948;

 

bul we live on debt (debt is 74% of GDP which was around US$ 80 billion in 2015 and almost 60% of that debt has been borrowed from our local savings)
bul our exports level pathetic and had dropped 50% during the last 15 years
bul imports are 138% of exports in 2015
bul about 20% of our GDP is required for debt servicing (annual capital + interest payments) yearly leading to a serious balance of payment crisis
bul tax revenue at 10% of GDP is about half of what it should be for a country with a per capita GDP of US$ 3,600 per year ( no wonder as the inflated citizen wealth is on wasted and high spending borrowing that did not get distributed in reality among citizens)
bul our unemployment at age group 15-29 is around 18% compared to national unemployment of 4.3% leading to long term revenue generation challenges. ( http://www.colombopage.com/archive_16A/Apr01_1459483764CH.php ). 
bul our public transport systems are in shambles even after massive infrastructure spending and we spend 43% of our export revenue to import oil
bul brain drain is huge and still prevails and biggest flight is with our most educated and most needed such as engineers and scientists ( especially those who are getting some sort of a free education). It's aggravated even more as the foreign opportunities get better with experiences our processionals get locally before they leave
bul SL rupee has taken a nose dive and continuing to do so ( 2009  Rs 109 for a US$ and now Rs 150) causing massive issues around balance of payments and actually survival through adequate imports
bul 28% our work population is employed in the agriculture sector and sector contribution to GDP is 7% !

 

What lousy productivity!! What have we as engineers done? Rest is mostly involved in the government services that do not add to National coffers ( they are paid from borrowings). Once proud maintenance team of the nation ( sadly not the innovators or the inventors of the nation) - engineers of all sorts in the public sector - got a "black eye " during the recent power outages! Note: Who is telling the truth? What's IESL doing about finding the truth? Is IESL going to let the media circus convict our engineers of CEB ?

 

We have to invent, innovate, improve productivity in all sectors and create high value adding products and services for the world markets to get $ and £. Then work on long term strategic issues such as stable - modern education and skills building national policies to feed into the years to come. Critical factors to consider are our increasing aging population percentage reaching developed world numbers, low population growth rate that will likely stabilize our population around the current number or even few millions less in a decade or so, unemployment of working age females (almost 60%), poor income distribution even as country progress creating political instability, etc.

 

Also view a statement by the PM on March 31st on International Trade Agreements that clearly shows the efforts of UPM to make all these agreements transparent is paying off: http://www.colombopage.com/archive_16A/Apr01_1459489872CH.php

 

Summary of Key Events of the Past:

 

Development processes such as International Trade Agreements ( including Indo-Sri Lanka ETCA) must be globally thought out and executed locally to be a success. For this, the professionals of UPM have already done tremendous amount of work and is in dialogue with GoSL. We are not pleased with the intensity of government actions although GoSL is very much in agreement with what we propose as professionals of the country. We need a good government and that government will certainly need professionals' help in "national policy making and execution" . One cannot do without the other and it's time we all realize this utter truth.

 

1 11/02/16: UPM - Protest Rally at Viharamahadevi where more than 6000 professionals from all sectors came
2 12/02/2016: Meeting Minister Malik Samarawickrama of Development Strategies and International Trade who is heading international trade agreement initiatives
3 16/02/2016: First meeting with Joint Working Committee at the Ministry office (UPM and GoSL lead by Dr Saman Kelegama, Dr Indrajith Kumaraswamy both are consultants on ISL trade agreements since 1998 and the Secretary to the Ministry Ms. Chandani Wijewardane)
4 22/02/2016: Meeting Minister Patali Champika Ranawaka at a meeting arranged by him to exchange ideas and share understandings
5

23/02/2016: Meeting both Ministers and Dr. Kumaraswamy - Receiving Draft ETCA Framework Agreement ( this has been now been presented to the Indian team and we do not know the outcome)

 

Note: UPM is not in agreement of the framework approach which is worse than the more detailed CEPA agreement that we all rejected! We ask for a detailed agreement that will clearly spell out terms of engagement. To suggest that we could do this after a loose FA is so crazy leading many to distrust the government working teams real intentions or understanding of the gravity of signing the FA. Professionals have and in the process of giving detailed action plans to the government team because they do not seem to be busy doing that but instead working according to some internal plan ( of whom?)

6 26/02/2016: Second Joint working Meeting
7 03/03/2016: Receiving Ministers commitment to (a) Conduct a skill gap study (b) Lead to get other stake holders to a common forum such as UPM
8 15/03/2016: Receiving signed meeting minutes from the Secretary to the Ministry
9 24/03/2016: UPM protest rally at Hyde Park

 

UPM is awaiting for written government explanations from the GoSL team lead by Dr Kekegama:

 

1 Detail study done on the pluses and minuses of a trade agreement with India especially liberalizing service sector ( GoSL plans to eventually open up many sectors other than IT and Ship Building that's in the current ETCA FA)
2 Skill gap needs of at least IT and Ship Building and the plans to benefit them through ETCA
3 Some other key clarifications on whose doing what in the government to ensure the house is put in order - it's not going to be done by the consultants as per them but by departments such as Commerce and International Trade. Officers of the highest level in those have not given the indication or for that matter we have not seen the capacity to do that! Thus we are proposing serious joint work with professionals.
4 Next Joint Com Meeting

 

 

The writer wishes to acknowledge detailed timeline updates given by Eng. Gamini Nanda Gunawardane ( UPM Spokesperson)

 

Eng. Arjuna Manamperi
IESL Council Member | Chairman IESL - MESC

 
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