The Island
With days to go for the European Commission’s recommendation on whether the GSP+ facility to Sri Lanka should be continued or not, Dr Karunasena Kodituwakku, an economist, former parliamentarian and cabinet minister and the present UNP organizer for Kolonnawa spoke to C.A.Chandraprema, about the realities of the present world order and the way the government could have handled the GSP+ issue better. The principle of tying trade to human rights issues is also discussed in this interview.
Q. Sri Lanka is now in danger of losing GSP+ over allegations of human rights violations. As an economist and a politician, what is your position on tying trade to human rights issues?
A. Over the past three decades, trade restrictions were applied to various countries on the grounds of human rights violations. During the apartheid days, South Africa was barred not only from trade but even from sports. According to the interim report of the EU, they say they have granted GSP+ to Sri Lanka with two objectives in mind – the promotion of development and good governance. Unfortunately, there was an escalation in hostilities in this country after GSP+ was granted. There were also other issues such as the non-implementation of the 17th amendment which the government could easily have carried out. No one can really accept the reasons given for the non-implementation of the 17th amendment. The reason given is that a parliamentary select committee has been appointed to look into the shortcomings of the 17th amendment. Even so, there is no need to suspend the implementation of existing provisions. Out of 225 parliamentarians, 224 voted for it, with only Champika Ranawaka voting against it. What now prevails is the view of Ranawaka. The overall picture painted by the EU report, goes against us.
I feel that the government mishandled this issue from the very beginning. I must say that even though there are criticisms of the foreign minister, in this matter he was silent and did not make any offensive statements. Some offensive statements came from the central bank governor. We have to realize that we are living in a different international order. Whether we like it or not the European Union is both politically and economically important for us. I do not mean to say that everything they do is correct. But we have to realize that we live in a different world. At a recent summit, Obama and the Russian President were both on the same wavelength when it came to Nuclear power in Iran. Similarly, China and the USA clash on other matters, but on trade, they see eye to eye because China cannot survive without the American market and the Americans cannot survive without Chinese money. Being a developing country, we have to be very careful in handling these matters. It is not the politicians or the bureaucrats who will suffer in the end, but the workers. The EU report says that various parties had made representations requesting that no decision adverse to the country should be taken. The Tamil Nadu politicians who visited the IDP camps seem to have found the situation generally satisfactory. Similarly, had the EU been invited to visit Sri Lanka, they may have left with a different perception. General day to day life continues here, and there are basic freedoms. A few journalists or a few activists may have been affected, but the general atmosphere is that you don’t feel repression. The Tamil Nadu delegation was taken to the Up-country areas, and they were given a rousing welcome, so they may have thought that their preconceptions about Sri Lanka were wrong. So we can say that the government mishandled the whole issue with the EU. When the GSP+ crisis came up the government could have hired expert negotiators either locally or from overseas, to handle the matter. If this matter had been handled professionally, we could have avoided all these uncertainties. I hope that finally, the EU will grant this facility, even conditionally, considering that a significant segment of the population is still under the poverty line and about 40% of the population lives on less than two Dollars per day. Most poor people depend on the garments sector or connected jobs and the middle east for employment. So I hope that the European Union will consider all these factors. To retain GSP+ is our hope.
Q. The present government is not the only government that had problems with the west over human rights issues. Even when the UNP was in power, they had the same problem, and at that time, the issues escalated to such an extent that the British High Commissioner was declared persona non grata. If trade is going to be affected by these periodic flare ups, where are we going to end up? If GSP+ had existed during the period of UNP rule, it may have been withdrawn at that time. Then where would we have been today?
A. There were travel advisories and so on even during the period of UNP rule. But particularly during president Jayawardene’s time, even though these pressures existed, he had other ways to approach the west. Neither he nor his ministers ‘blackguarded’ them publicly. At that time, it was not just the Tamil diaspora, but even Indian diplomats based in the west were working against the Sri Lankan government. Despite this hostility, president Jayawardene was able to have a close understanding with the USA. He is the only Sri Lankan leader to be given a red carpet welcome at the white house. Even though concerns were expressed, the foreign assistance that came into this country was un-interrupted up to 1989. I have to admit however, that there was some mishandling after 1989. Of course Gladstone stepped out of line. As a diplomat he has the right to express his views, but he had no business to go into a polling booth. What I want to say is that this kind of treatment from developed nations is not a new thing for developing nations. Even if a UNP government comes into power in the future it will be the same. We have to realize that. That is why I stress the importance of negotiation and the use of diplomatic skills. There are retired professional diplomats who could have advised the government. I am not saying that what the developed world does is correct. But we must realize the order that prevails internationally. We have to survive within the existing order. As I stressed on an earlier occasion, the national interest is more important than self respect. The day to day economic survival of our people is more important. I hope that the European Union would consider the requests made by so many parties, including the British retailers, the Arch Bishop of Colombo, the UNP, and extend this facility to Sri Lanka. The government is only one institution in society. The government has not had a professional approach to these matters. They allowed Tamil Nadu politicians to tour the IDP camps but opposition MPs here are not allowed to go to the camps. There is no consistency in what the government does. There is a lot that they can learn from India. Look at the way Indian is working with the USA. We must learn from India, how to work with the world.
Q. Apart from considerations of the world order and the power argument, as an economist, how would you regard the principle of basing trade on non-trade considerations?
A. Interference in the market, in supply and demand, from outside for political or other reasons, is wrong. Market forces have to be allowed to operate freely. British retailers are very keen to continue with our products. But unfortunately, the world order is a different matter altogether.
Q. All this is ostensibly to further the cause of human rights in Sri Lanka. Doing away with GSP+, cutting off aid, all this is meant to accord us more human rights than we have at present. Do you believe that the cause of promoting human rights will be met by such means?
A. Everybody would like to have more and more power. Power was devolved in this country, but many central government ministers were reluctant to allow power to be taken away from them. The European powers, would like to retain the power that they have. Today, colonialism is not a viable instrument to control anybody. At the moment, the western powers have two weapons to control the rest of the world – trade and aid. Now even aid such as grants and concessionary loans depends on the per-capita income of the country. At least accounting-wise, we get a higher per capita income. So aid will get progressively reduced. Finally, the only weapon those countries will have is trade. The Chinese economy would collapse in a year if their market access to the USA is blocked. So the west will manipulate trade to look after their national interests or to have their intentions fulfilled. We have to understand these realities and diplomacy has to be given a due place. Ten to fifteen years ago, people were talking about an Asia-Pacific century, but this has so far failed to materialize. The focus is still on the two sides of the Atlantic – the USA and the EU. They are trying their level best to retain that domination. As long as that economic strength and purchasing power exists, we have to work with them. At least for the next ten to fifteen years, we can’t think of any other markets.
Q. Do you think the terrorist problem here could have been solved if Sri Lanka listened to what the west had to say about the matter?
A. If the government allowed our professionals to handle this matter, we would have succeeded. We have some very able diplomats. At one time the JHU was asking the British for compensation for what happened during colonial rule. Now they are signing a petition against the USA. Except for generating emotion within this country, no one would take these things seriously. If the government accepts what the JHU is doing, that is a sad situation. Recently, Basil Rajapakse and P.B.Jayasundara made a visit to Brussels. No one knows what the outcome was. But it shows that the government has realized the importance of retaining GSP+. That is a positive sign.