Catastrophic Economic Partisan Agreement (CEPA) with India Means Disaster
Posted on May 27th, 2010

Dilrook Kannangara

India is in the process of signing CEPA (Comprehensive Economic Partnership Agreement) with many countries in Asia in an attempt to match Chinese economic expansion. Already India has signed CEPA agreements with a number of countries including Singapore and South Korea. Interestingly previously China signed CEPA (Closer Economic Partnership Arrangement) agreements with Chinese territories including Hong Kong and Macau. Now India is forcing Sri Lanka to sign the agreement which Sri Lanka refused to sign last year. Businessmen in Colombo and parliamentarians of the pro-business UNP party protested new attempts by Sri Lankan government to go ahead with the agreement.

 The logic or illogic of CEPA is very clear from an economic perspective. There s absolutely nothing beneficial for Sri Lanka in it. It is one sided and favours only India. According to Sri Lankan folklore it is like the story of two farmers who share a cow by owning to equal halves of the cow. They tied a rope around the belly of the cow. One owned the front part and the other the rear. Farmer who owned the rear got all the economic benefits including milk, calves and even manure while the other paid for it! What job opportunities are there for Sri Lankans in India when Indians illegally come to Sri Lanka to find work! Even at the professional level, there are many qualified unemployed persons in India than Sri Lanka. They will easily gain employment in Sri Lanka driving unemployment in Sri Lanka among qualified persons will skyrocket. It must be appreciated that unemployment and underemployment among Sri Lanka’s qualified youth is the highest of all unemployed people. CEPA will aggravate this. Unemployment among qualified persons has already bred youth unrest in the country. Government of Sri Lanka cannot disregard these facts just because economically desperate India pushes the damned agreement.

 India’s labour force is growing at a rate of 2.5 per cent annually, but employment is growing at only 2.3 per cent. Thus, the country is faced with the challenge of not only absorbing new entrants to the job market (estimated at seven million people every year), but also clearing the backlog. Sixty per cent of India’s workforce is self-employed, many of whom remain very poor. Nearly 30 per cent are casual workers (i.e. they work only when they are able to get jobs and remain unpaid for the rest of the days). Only about 10 per cent are regular employees, of which two-fifths are employed by the public sector.

More than 90 per cent of the labour force is employed in the “unorganised sector”, i.e. sectors which don’t provide with the social security and other benefits of employment in the “organised sector.” Sri Lanka will be in a much worse predicament if CEPA comes into being.

 Sri Lanka has a nominal GDP per capita of US$2,020 while it is only US$1,068. Therefore it makes sense for Indians to exploit the Sri Lankan service sector than the other way round. These figures speak for themselves.

 Sri Lanka emerged after a 34 year old war. Economic recovery is obvious while the stock market had an exceptional year last year. Good performance continues at the Colombo Stock Exchange. Tourism and other connected industries show tremendous improvement already. All other industries are likely to do very well. India is trying to skim and exploit these benefits grabbing them from deserving Sri Lankans.

 President Rajapakse feels indebted to India for India’s support to eliminate the LTTE. However, he seems to be unaware of tragic economic repercussions of CEPA. Sri Lankans must rise against this national crime. If the government disregards peoples’ concerns and sings the agreement that will convince the people of the mistake they did by giving an overwhelming majority to the UPFA. Absence of a strong opposition is badly felt by the people now.

 India has another hidden agenda behind this. A large number of RAW spies disguised as professionals will enter the island and carry out usual disruptive moves with absolute safety. Indians will eclipse close to 20,000 highly skilled Chinese essential workers presently in Sri Lanka.

  All patriotic forces, not just the business community must come forward to stop this “ƒ”¹…”Catastrophic Economic Partisan Agreement’. 

4 Responses to “Catastrophic Economic Partisan Agreement (CEPA) with India Means Disaster”

  1. orpheusperera Says:

    Dirook you are absolutely right. This is happening in Australia. After similar agreement during the Harword government, initiated by businessmen, the flow of Indian Migrant to Australia is massive. They are taking all the jobs. First the IT jobs and other professionals. then the professional migrants sponsor their families who takes up all the jobs from managing petrol stations to security jobs and then onto businesses such as news agencies and post offices. Australians do privately complain about this. Because of new anti-discrimination laws nobody openly complain about it.
    In the IT profession, Indians who are already in, talk to the managers and get other Indians to join even if they don’t have experience. The person who gives reference in India could be just a driver or a computer operator in India. The guys who know the job help the friends to learn the trade, cover up for them until they learn the job while getting high salaries. I personally know such cases.

    India although, is an emerging supper power, with high tech industries and nuclear weapons, still have poverty and unemployment at a higher rate than Sri Lanka.

    Australians can afford to become unemployed. They will at least get money to survive. Before signing such a pact Sri Lankan government will have to make sure good unemployment benefit scheme is in place for Sri Lankans. Our onion, chilli and potato farmers lost their lively hood because of cheap products from India. This could be one of the reasons why Tamil farmers in the north let their off springs to join LTTE. Economist like Bandula Gunawardane should know of the consequences of such deals with India, better than any of us

  2. De Costa Says:

    agree with both of you.
    Mahinda should not be allured by this agreement. Too many Indians will destroy our culture. They have already destroyed a lot. They are culturally very different. They have no moral shame and fear. Our girls will not be able to walk freely.
    What benefits did India gave us ? Bajaj mosquito instead of taxis ? Lousy quality busses which make hell of a noise like trucks? All Indian products are sold in Sri Lanka but do they buy any Sri Lanka products ?
    This agreement will bring us ell.

  3. Fran Diaz Says:

    CEPA will take Lanka into trouble, no doubt. We do not know the details of CEPA, but if it allows Indian labor to freely come into Lanka, we can expect very large numbers to come in. And will they go back ? Who is going to check up on this incoming
    labor from India ? It may be illegal immigration by another name !

  4. sena Says:

    This article make sense. Hope those in power tally the benefits vs risks. However expecting majority of Sri Lankans to respond constructively is not real judging from their electoral wisdom since the independence. Also assuming a Sri Lankan, orpheusperera’s comments on Austarlian experience are irrational and prejudiced

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