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'Indian Connection: A reprise'- a
comment A most curious piece written by someone who seems to be more than familiar with his subject. Do we read him right, that some 'deal' was done---- some secret agreement concluded, or that there was a hidden agenda or at least that some understanding was arrived at?---- and that this is yet another repeated passage from our recent history. The Hindu Cor-respondent also came to this same conclusion. He was speculating whereas this could be from the horse's mouth. Let me however begin by taking issue with this professional India watcher who states that there was "hype and hoopla, which has now begun to subside". Unless he was of course referring to those who are using their official positions to make this country a satellite state, we the ordinary people, have been and are most anxious about what this so called Agreement portends for this country, and whether the "evolving situation" which this "India Watcher" refers to, will lead us on to disaster. Dr. Lal Jayawardena, 'the father', as someone referred to him, or the Architect of the Agreement, has of course stated that those who are expressing concern are being Xenopho-bic. He is said to be the persistent optimist. Let us hope he is right but then have these Economists not been all proved wrong and not just over South East Asia. Let us not only recall the story of the three Nobel Prize winning Economists whose Bank crashed, ruining the lives of thousands. Recent history is replete with many instances when Economists of great intellectual capacity have been proved wholly wrong when they applied their so called theoretical models to the real world where we live. Whether it was the classical Economists such as Adam Smith, Malthus, Ricardo,or Karl Marx, (their prophesies and theories did not quite turn out right) or the Economic gurus of today. Quite often theoretical Economists living in Ivory Towers or in their Universities, come up with theories despite the overwhelming empirical evidence provided by Economic History. Have we not seen how models of 'competitive equilibrium' built on the premise of the 'rational economic man' have been shattered? Have we not seen before our very eyes, the result of the full implementation of so called 'Free Market' policies---the 'Savings and Loan' scandal of the early 80s, has become small change compared to what has happened in more recent times. Do we not know of what has happened to the former Soviet Union and to Russia in particular, who restructured their economies to the dictates of so called economic gurus. Have we not seen how great economic theorists such as Pareto have been debunked? Have we not seen the critical writings of Partha Das Gupta and Heal, not to mention Newbury and Stiglitz? Even with regard to the work of Kenneth Arrow, despite his sheer intellectual power----we see the huge discrepancy between theory and reality. In more recent times we had the Nobel Laureate Milton Friedman, who was a firm believer of and preached the 'quantity theory of money', which asserts that inflation is always and everywhere caused by increases in the supply of money. Many countries, including Germany and Britain under Thatcher were influenced by this view that Inflation was a purely monetary phenomenon. But that claim that Inflation is ALWAYS AND EVERYWHERE CAUSED INCREASES IN THE MONEY SUPPLY has been proved to be ridiculous. Whether it was the classical economists or the more recent ones they have all been the same, but let us pray that we Xenophobes are wrong and that the professional economist, Dr. Lal Jaya-wardena is right. After that diversion, let us address ourselves to what the 'India watcher' has been observing, from his perch, through his binocs, telescope, periscope or his ring side seat, which ever it be. "India Watcher" certainly seems to know what he is talking about when he traces the 'history' of this particular visit to India by the President. The 'Watcher' states, quite authoritatively, that the visit was originally conceived only "for the prosaic purpose of laying the foundation stone for a pilgrims rest in New Delhi" but ended in "a full blown State Visit with all the trimmings". His next sentence is most revealing, "available evidence suggests that this was acceptable by the Sri Lankans without even token demur, given that it would then be the second successive such visit from here, without an intervening reciprocal State or even official visit from there. He then states that the original purpose was subsumed by the "epochal and even apogean one of hurriedly concluding and signing, (quite exceptional thing for heads of Governments to do, he says) a fast track Free Trade Agreement ··". The "Watcher" goes on to state that the "Agreement was negotiated and signed without consulting the private sector here, which the President and her business oriented Foreign Minister have repeatedly proclaimed to be the engine of this country's growth". The "India Watcher" next states that he wishes to provoke a public debate about the Political aspects of the Agreement.(which is entirely justified) but on which side of the argument is he? he does not reveal, neither does he enter into a serious examination of the political impact of the Agreement on this country. I am frankly disappointed. For a Foreign Relations Pandit this should be 'kaju'. But I wish to draw attention to certain words he uses and certain statements he makes, for they seem to indicate a particular bias,(could he be an Indian?-no bias then) which we need to take account of, to set this article in perspective. He is quick to absolve India of blame for setting up the fruit for easy plucking. He says that that there were two happenings in 1983, NEITHER OF INDIA'S MAKING, the exodus to India (ruling out the possibility that RAW, which was associated in many gruesome acts of terror with EROS and other militant groups about which there is a mountain of proof, could have orchestrated events) and the 6th Amendment, (the same principle, which requires one to swear allegiance to the State is enshrined in the Indian Constitution too) which "effectively disfranchised the Tamil leadership" made the Indian intervention in Sri Lanka "INESCA-PABLE", (conceding the RIGHT to interfere in our internal affairs). He then sets out his thesis, the resolution of the Tamil problem is crucial for us and of some marginal importance to the Indians. Could not an 'understanding' have been reached to help the Sri Lanka Government without too much visibility? In return, Sri Lanka would ensure that India has a virtual monopoly of the Sri Lankan economy. In fact 'India Watcher' may for all purposes be right. The President cannot go into an election with any degree of certainty that she could pull it off, (neither could her PA win the Parliamentary elections) without putting an end to this war. Would it not therefore make sense to do a deal? It certainly would. Whether the Indians could deliver this time around would be the question. If such a deal has indeed been struck, does it mean that India is once again determining as to who shall govern this country, [it had been alleged, and also confirmed subsequently, that some ballot boxes were stuffed in the Eastern Province, ironically in favour of Presidential candidate Ranasinghe Premadasa!] What if this Agreement also becomes unstuck, say, the Indians give us all possible help but we cannot end the insurgency. I would agree with 'India Watcher's words, used in another context, that such a situation "would not be of India's making", we would then not have the right to level the playing field by entering into a similar Agreement with Pakistan or any one else. What if the Indians are unable to perform, as was the case with the Rajiv Gandhi- Jatawardena Accord. It would be recalled that they, amongst other obligations, were required to, (under section 2.16 of the Letters exchanged), co-operate with the Sri Lanka Navy to prevent arms reaching the LTTE. But for two valuable instances, the political will has been absent in the matter of discharging this obligation. So at the end of the day this what if they are again unable to deliver because of domestic political compunctions. Meanwhile there has been a new development of serious import. A Sunday paper which published photocopies of certain documents {obviously leaked} and alleged that the document that was signed was not the document that had been initialed by Dr. Jayawardena and his Indian counterpart. It is alleged that certain significant sections which would have protected our interests have been left out of the Agreement. This is indeed serious, but who will provide the explanation? not the Trade Ministry for they have apparently been left in the cold about this agreement. Sadly the Opposition does not now ask Parliamentary Questions, for reasons best known to themselves. So we shall remain uninformed. If the thesis of the informed 'India Watcher' is correct what would be the new position, the UNP would take, since it welcomed the Agreement initially? The UNP has also been pursuing a sort of aggressive pro-India policy--- even publicly supporting some bird brain idea that would end for all time our 'Island' status, by rebuilding the Hanuman bridge. Let us hear from them now. To conclude, if the 'India Watcher' is right and we have indeed come to some agreement/understanding to end this insurgency, and to restore peace to this country so that all its citizens could live in security and dignity, then it is certainly worth paying almost any price for it's short of losing out on our independence and sovereignty. Indo-Lanka Trade Agreement - an analysis
in perspective Much has been written and said recently about the signing of the Free Trade Agreement by the two heads of State of both India and Sri Lanka in New Delhi. The impression created in a section of the media here is that Sri Lanka has lost out on the deal. Even before the details of the Agreement were made known recent Indo-Lanka trading history and statistics were subjects of scholarly analysis by respected economists, who prescribed their own thoughts to overcome the growing asymmetrical trade imbalance between the two countries. The agreement itself is a product of many years of "burning the midnight oil" by experts and officials from both sides - in the process of which many sections of the trade were consulted and whose views no doubt formed part of our own proposals. Nonetheless, a section of the local media encouraged the charge that the Agreement is an imposition by one side from their position of strength on the other. Such criticism will be unkind to the many officials from the Sri Lankan side who worked hard for months to get a good bargain for Sri Lanka. A study of the Agreement, now made available, re-assures those entertaining doubts that Sri Lanka's interests have not been thrown to the wind. I have chosen some of the more relevant clauses in the Agreement for discussion here. - The preamble makes it very clear what the objectives were "Further recognising that progressive reductions and elimination of obstacles to bilateral trade through a bilateral free trade agreement would contribute to the expansion of world trade" - Article I (Objective)) Para 2 ((ii) states the Agreement seeks : "To provide fair conditions of competition for trade between India and Sri Lanka" - More importantly pare 2 (iii) illustrates that inspite of the assymetry between the two sides in trading terms "In the implementation of this Agreement the Contracting Parties shall pay due regard to the principle of reciprocity" - Article 4 (General Exceptions) offers further cause for encouragement when it states "Nothing in this Agreement shall prevent any Contracting party from taking action and adopting measures. Which it considers necessary for the protection of its national security, the protection of public morals, the protection of human, animal or plant life and health and the protection of articles of artistic' historic and archaeological value, as is Provided for in Articles XX and XXI of the General Agreement on Tariff and Trade, 1994." - Making it clear that no clause in the agreement is totally rigid and irrevocable Article IX (Domestic Legislation) goes on to provide:- "The contracting parties shall be free to apply their domestic legislation to restrict imports. In cases where prices are influenced by unfair trade practice like subsidies or dumping. Subsidies and dumping shall be understood to have the same meaning as in the General Agreement on Tariff and Trade 1994 and the relevant WTO Agreements." - To emphasise the point either party does not suffer from benefits accruing disproportionately Article XI (Joint Committee) Para 1 states : "The Committee shall meet at least once a year to review the progress made in the implementation of this Agreement and to ensure that benefits of trade expansion emanating from this Agreement accrue to both Contracting Parties equitably. The Committee may set up subcommittees and/or Working Groups as considered necessary.... (Para 2) The Working Group shall meet as often as required and shall report to the Committee on its deliberations" - Para 3 of Article further reassures:- "The Committee shall accord adequate opportunities for consultation on representations made by any Contracting Party with respect to any matter affecting the implementation of the Agreement. The Committee shall adopt appropriate measures for setting any matter arising from such representations within 6 months of the representation being made. Each Contracting Party shall implement such measures immediately." - Article XII {Consultations) lays down:- "Each Contracting Party shall accord sympathetic consideration to and shall afford adequate opportunity for consultations regarding such representations as may be made by the other Contracting Party with respect to any matter affecting the operation of this Agreement" Addressing nearly 5,500 items of trade (six digit figures only) which the two countries have engaged in for long and carefully tracking them down to a few hundreds to facilitate the generation of trade between two countries is no easy task. India evidently has been responsive to Sri Lanka's deep concern to narrow the vast gap between the two countries - where last year India's export to Sri Lanka was in the region of Rs. 33,023 million vis-a-vis Sri Lanka's export to India of about Rs. 2,582 million. Now that India produces many of the items we do and the alternatives left to trading alone will not bridge in this gap the Indian side has encouraged the setting up of manufacturing units under Indo-Lanka cooperation utilising Sri Lankan raw material. Several such units are already functioning successfully in Sri Lanka offering employment and generation of income to many. Many such possibilities are available and should be exploited by the Sri Lankan side. It is also to be expected with the passage of time there will be a few aberrations between objectives and realities under the Agreement. But this is to be expected considering the vast number of items involved. From the foregoing it would appear that much attention has been paid to protect Sri Lanka's interests under the Agreement by our officials. Both sides must be congratulated - and not subject to unfair criticism - for taking abstract ideals and converting them to a practical Agreement aimed at offering a filip to trade between the two countries. It is now left to both the Sri Lankan and Indian entrepreneurial skill to take off from this lead and demonstrate their trading experiences and innovation to benefit from the vast trading area now made available to them created by the Political leadership of two friendly neighbours in a spirit of goodwill and accommodation rather than otherwise. |
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