As Sri Lanka prepares to celebrate yet another traditional Sinhala and Tamil New Year – the first under the National People’s Power (NPP) Government – the country does so while heaving a sigh of relief following the Trump administration’s 11th-hour decision to suspend its steeply revised import tariffs for a period of 90 days. Prior to this announcement, thousands of workers serving in export industries, primarily in the apparel trade, were unsure of their employment once they returned to work from the holiday break. At least for now, it appears that they will have their jobs to return to, but not for long as the deadline has been reset for three months.
Therefore, it is now up to the Government to make use of this breathing space to thrash things out in Washington while simultaneously exploring new, alternate markets for its American export portfolio, if that door were to eventually close. While the Government has been struggling to deflect the harsh criticism directed its way for not acting in time despite adequate warnings of the imminent tariff revisions under the Trump presidency and not doing enough to avert what could have been an economic catastrophe from a local point of view given the still precarious state of the economy, it has attempted to deflect some of that criticism towards the Opposition and the regimes past, accusing them of not diversifying the country’s export portfolio.
Talking tongue in cheek is a skill the NPP appears to have mastered pretty fast. Just the other day the media exploded over a speech made by a prominent Deputy Minister at a party election rally in Galle attended by the President, that what the NPP inherited was a bankrupt economy with just $ 20 million in forex reserves, fuel shortages, and electricity cuts. He then stated that in the six months since taking office, the NPP had succeeded in raising forex reserves from $ 20 million to $ 6.1 billion. He also demanded that the crowd applaud this achievement.
It doesn’t take a genius to figure out the lie of the Deputy Minister, which he had previously repeated at least on two different occasions with success. Therefore, it was a case of being third time unlucky with the media in general and social media in particular taking him to task. For the record, it was in May 2022 that the country underwent its worst-ever economic nightmare and the shortages and cuts the Deputy Minister mentioned.
However, it was Ranil Wickremesinghe who was elected President by Parliament under extraordinary circumstances, who over the course of the next 26 months succeeded in not only reversing those economic misfortunes but also managed to build up forex reserves to the tune of $ 6 billion at the time of his departure from office last September. With the media highlighting this fact, the Deputy Minister was figuratively caught with his pants down and the fallout is something the NPP will have to deal with, with even the Cabinet Spokesman being compelled to admit during last week’s Cabinet media briefing that the Deputy Minister’s assertion was wrong.
It is in this backdrop that the NPP attempted a similar stunt in Parliament, accusing the previous governments of having failed to do enough to diversify the country’s export basket and thus exposing the nation to the vagaries of the American market. That was enough for the Opposition to pounce on the Government and remind it that it was the Janatha Vimukthi Peramuna (JVP)/NPP combine that was responsible for the status quo; that it was the NPP which while in Opposition opposed every trade deal, every proposed Free Trade Agreement (FTA), and even those economically beneficial such as the Millennium Challenge Corporation, more popularly known as the MCC Agreement, the Economic and Technology Cooperation Agreement (ETCA), and the Comprehensive Economic Partnership Agreement (CEPA) with India.
While the MCC was primarily a programme designed to reduce poverty through economic growth, CEPA was to be an FTA that aimed to establish a comprehensive economic partnership, including a free trade area, covering trade in goods, services, investment, and economic cooperation between India and Sri Lanka. Meanwhile, ETCA was designed to enhance trade, investment, and economic cooperation, particularly in the service sector, all of which the NPP opposed.
Thousands were brought on to the streets in protest, resulting in all of these having to be shelved. It was during this time that the JVP renewed its agitation against so-called Indian expansionism, calling both ETCA and CEPA subtle instruments to further those expansionist goals. Now, not more than just a year later, the NPP has capitulated.
It is evident that the party’s abrupt U-turn on its long-standing anti-India policy has cost it in terms of political capital, which appears to be what prompted the Party General Secretary to come out in public and issue a statement to the effect that the India of today is not what it was when the party stood opposed to it.
Whether the Party General Secretary, like his beleaguered colleague and Deputy Minister, is suffering from amnesia we don’t know, but even as recently as the Presidential Election campaign in August last year, the NPP regularly accused India of having even plotted the Easter Sunday terror attacks, recordings of which have flooded social media in the recent past. Therefore, the assertion that India has changed holds little water in justifying the NPP’s sudden change. In fact, even New Delhi must be pondering what it did in the past year to be perceived as having changed so much when in fact its policy has remained consistent over the past decade that Narendra Modi has remained as Prime Minister.
To make matters worse, the regime stands accused of entering into no less than seven bilateral agreements, the contents of which have not yet been released to the public. Alternatively, various spokesmen have attempted to pacify the public that there is nothing harmful in any of the agreements, including the one pertaining to defence, but if so, why are they not being made public? Some others have attempted to justify them claiming that these are only Memoranda of Understanding (MOUs) and therefore there is no cause for concern. In fact, the President himself claimed that there was “nothing” in the defence-related MOU.
Adding fuel to the fire, when the Opposition raised the matter in Parliament last week, the Government’s response was that those interested in finding out the details should make a request under the Right to Information Act.
However, what is of concern and in fact a watershed event is that this is the first time in the history of this nation that it has ditched its non-aligned foreign policy and entered into a defence-related ‘understanding’ with another nation. This abrupt departure from non-alignment has by default exposed the nation to new security concerns which the nation can ill afford at this juncture.
Whether a President elected with just a 42% plurality has the moral right to change course and seemingly compromise sovereignty at a time when global tensions are at breaking point, is something the current leadership will have to seriously consider once the New Year celebrations are over because there is seemingly more to these MOUs than what appears to meet the eye, as evidenced by the lack of clarity and unwillingness to present them even to Parliament.
These MOUs cover critical areas such as the national power grid, digital identity systems, pharmaceuticals, defence cooperation, and fuel resources in Trincomalee. While Big Brother appears to have got all that it wished for and paved the way for Indian engagement in nationally critical aspects, it is up to the powers that be in this sovereign nation to ensure at least post-event review and ensure that national interests are not compromised at the altar of political expediency.