Editorial Courtesy The Island

May 23, 2018, 10:15 pm

The yahapalana government is apparently labouring under the delusion that a sure-fire way of propping up the ailing economy is to ink free trade agreements (FTAs) with as many countries as possible. Its desperation seems to know no bounds. It came to power, promising to perform economic miracles and create a Utopia of sorts. But, it has become an economic cripple looking for free trade crutches to steady itself.

The yahapalana government’s latest attempt, to enter into an FTA with Singapore, has run into stiff resistance. Local professionals and entrepreneurs are opposing this move tooth and nail. They are of the view that the proposed agreement is heavily loaded in favour of Singapore. The government has sought to allay their fears, but in vain. Minister Malik Samarawickrama spoke sensibly in Parliament on Tuesday, countering, as he did, some of the arguments against the FTA at issue. But the government is faced with a severe trust deficit owing to questionable deals it has struck with foreigners for short-term gains.

The Sirisena-Wickremesinghe government has shelved the Economic and Technological Cooperation Agreement (ETCA) with India due to vehement protests; the government doctors are threatening stern trade union action if the government decides to go ahead with the controversial pact. Several professional outfits have pledged solidarity with the doctors, and the government, obviously, does not want to take unnecessary risks at a time when its chips are down on the political front. It has made a tactical retreat and craftily opened another front by undertaking to sign an FTA with Singapore. It is trying to wear down resistance from several professional groups which are also troubled by the prospect of foreigners taking the bread out of their mouths. The yahapalana administration has adopted the same modus operandi in handling the private medical school issue. It confuses its enemies by creating numerous other issues so that they will keep on protesting until they tire themselves out. As for the ETCA, the signs are that while feinting with its right the government may swing a left.

Not all arguments the opponents of the FTAs put forth, in a bid to justify their resistance campaign, hold water. But the concerns of the local stakeholders should be heeded and their views taken on board before vital decisions are made. One cannot but agree with them on the need for a national policy to prevent governments from entering into trade pacts with other countries in an ad hoc manner at the expense of the national interest.

It is time the government stopped trying to get lucky by hitching its wagon to strong economies. FTAs may be welcome so long as they are not blatantly lopsided. The FTA, it has agreed to sign with China, looks favourable, but whether the yahapalana negotiators will be able to ensure that Sri Lanka will stand to gain from the pact remains to be seen. However, FTAs are no substitute for a well thought-out plan to revitalise the national economy, which is in the doldrums. Similarly, the way to arrest the rapid depreciation of the rupee, which has aggravated the country’s economic woes, is not to depend on proceeds from the sale of state assets to foreigners to boost foreign reserves. The government ought to create an investor friendly environment to attract foreign direct investment. Corruption is driving foreign investors away and the gravity of the situation has become evident from the recent arrest of President Maithripala Sirisena’s Chief of Staff for taking a huge bribe from a foreign businessman.

Meanwhile, former Minister Dayasiri Jayasekera told Parliament on Tuesday that as for the proposed Sri Lanka-Singapore FTA, the government’s point man in Singapore was former Central Bank Governor Arjuna Mahendran. Politicians cannot be expected to tell us the truth, the whole truth and nothing but the truth, on the floor of the House, but the government had better counter his claim, if it is in a position to do so, because nobody in his or her proper senses will accept anything brokered by the likes of Mahendran and Mahanama.