JVP stance on debt traps, fertilizer import bans, ports and PC elections

 

by Saman Indrajith- 2021/10/31

The JVP says that the country is caught-up in what it calls ‘debt-trap diplomacy’ and warns that Sri Lanka is poised to lose more national assets in the immediate future. “Several rating agencies downgraded Sri Lanka’s sovereign credit ratings, the long-term foreign-currency issuer and senior unsecured ratings, while the long-term foreign-currency issuer default rating signalling concerns about the country’s ability to fulfil foreign debt repayments. In the face of this crisis, the government will either have to print more currency, borrow more or sell off national assets,” says former JVP Kalutara District MP and Politburo member Dr Nalinda Jayatissa in an interview with the Sunday Island.

Excerpts:

Q: Some ministers have made statements about the possibility of holding elections for provincial councils. Is your party ready for provincial council elections?

A: They started speaking of provincial council elections only after Indian Foreign Secretary Harsh Vardhan Shringla’s recent visit. The visit has jolted the government into action. The elections are to be held not because people have asked for them but because India wants the government to have them. This indicates the present plight of our nation. In 2019, Gotabaya Rajapaksa came to power under the slogan of ‘Rata Rakina Viruva’ (The hero who protects the country). Now that same hero has succumbed to pressure from India, the US and China and many other foreign powers.

Q: Energy Minister Udaya Gammanpila says that Trincomalee oil tank farm had been given to India by former governments in 1987 and 2003. The present government tries to show they are on a mission get the tanks back from India. What is your party’s stand on this?

A: We believe that Trincomalee harbour and the oil tank farm were the reason for India shoving the Indo-Lanka Accord down our throat in 1987. The then President was supportive of US camp while India was supporting the USSR bloc. President Jayewardene was considering giving Trincomalee to the US. India was upset and invaded the air space of this country, dropped parippu and sent Indian ships to our waters to terrorize that government and coerce it to sign the Indo-Lanka Accord.

The correspondence between Jayewardene and Rajiv Gandhi before the signing of the Accord shows that India would not let Lanka make independent decisions about the use of Trincomalee harbour without India’s concurrence. But such conditions are not included in the agreement. In 2003, Ranil Wickremesinghe’s government leased 99 oil tanks for 35 years to India for an annual fee of 100,000 US dollars. A Memorandum of Understanding was signed to reach an agreement in six months. It is only with the signing of such an MoU that the lease would have had legal effect. However there has been no such agreement since 2003. Therefore, India does not have any legal hold of the oil tanks and that land. Yet, they have paid the annual fee for the past 18 years.

Gammanpila is only putting up a show. The former ministers who had the Ceylon Petroleum Corporation (CPC) under their purview, Susil Premjayantha, Anura Priyadarshana Yapa and Chandima Weerakkody, got cabinet papers passed in 2011, 2014 and 2016 stating that those oil tanks belong to the Lankan government. India continues to hold those tanks illegally. One of our trade unions in 2017 filed a case at the Supreme Court against this. The decision is pending.

In terms of the provisions of the Ceylon Petroleum Corporation Act No. 28 of 1961, only the CPC can import petroleum to this country. Ranil Wickremesinghe broke that monopoly in 2004 and gave permission to Lanka Indian Oil Corporation (LIOC) to import fuel for 20 years with effect from January that year. That permission expires in December, 2023. Then the monopoly of petroleum importing, exporting, storing, refining, distributing and selling will return to the CPC. If government would not extend this permit, then India will lose its argument for the need to use Trincomalee Tank Farm. India’s present need is to get the oil tanks and the land they stand on for another 50 to 60 years. That was the primary objective of the Indian Foreign Secretary’s visit. Their actual target is the Trincomalee harbour and the oil tank farm gives them a foothold to move in that direction.

Q: So it’s all about Trincomalee harbour?

A: Yes, it is. Not a single harbour but many. The harbour in Trincomalee is considered one of the finest deep-sea, natural harbours in a strategic location. Sri Lanka’s geostrategic location is vital not only for the Asia-Pacific region but for the entire world. The importance of that location finally depends on the control of our harbours. We have three main harbours in Colombo, Hambantota and Trincomalee. What has happened to them? Hambantota is now owned by China for 198 years. It is China that controls the Hambantota port and its surrounding land of 15,000 acres. The Trincomalee harbour is being eyed by India. Then we have the Colombo Port, which is considered one of the busiest harbours in the Indian Ocean and is at No. 24 in the Top 50 World Container Ports list.

This position could be bettered if we could increase the depth of the access route to that port, deepen and expand the terminals and berths and increase the number of terminal operations opening the way for the world’s largest vessels to enter the Colombo Port. Now South Asia Gateway Terminal (SAGT) with berth of 18 meter depth is controlled by China. Mahinda Rajapaksa gave it to China for 35 years in 2012. Basil Rajapaksa recently brought a cabinet paper to give 13 acres of adjacent land to China to set up an operational and service center. So, even when the 35-year period ends, China will still have control there.

When China is given such hold, other countries also try to get a piece of the pie. The Selendiva project will enable selling many adjacent areas covering the Grand Oriental Hotel, Gafoor Building, York Building, Foreign Ministry and the old GPO. The Bank of Ceylon (York Street) is earmarked to be moved to Battaramullla, so that land too could be sold. There had been an attempt to give away the East Container Terminal (ECT) to an Indian company but it was suspended owing to protests. SAGT could be taken back by the Ports Authority in 2028. Currently it is under John Keells Holdings which is the local agent of India’s Adani Group that is involved in the West Container Terminal (WCT) development. After building that terminal, the two most important terminals of the Colombo Port will be controlled by China and India. This process shows how we have lost control of the three most important terminals during the past ten years. The income they earn is taken by foreigners to their countries leaving us with little.

Historical records show that the harbours have been among the most important feature in our civilisation. Recent archaeological findings yield evidence to prove that the Anuradhapura civilisation had been founded on the Mathota harbour which is said to be in Mannar. It was this harbour that supported the thriving Anuradhapura civilisation that constructed giant stupas and tanks during the 400 years from 150 AD to 250 AD.

During that period, South Indian traders invaded the Anuradhapura kingdom and ruled it intermittently when they had the control of Mathota and its resources. King Elara ruled that kingdom for 44 years and took away what it generated to South India. Later five other South Indian rulers before King Vattagamani Abhaya did the same. They took home what was earned from that harbour. They (the harbours) have been a principal prop of our civilisation.

Even when the Portuguese came here, they asked the King of Kotte only for one thing – that was to build a fort near the Colombo port. The present day rulers are depriving this country and its people the ownership of those harbours and thereby we lose the country’s geostrategic importance.

Q: The government describes those transactions as investments. Do not we need such investments?

A: China spent only USD 500 million to develop South Terminal of Colombo Port. The Lankan government took a loan of USD 1,400 million to build the Hambantota port. If the government took a loan of USD 500 million instead and developed the South Terminal of the Colombo Port, then we would have earned profits from there. China or India will not come here to invest in our health, transport or education sectors. Their investments have the objective of snaring us in a debt trap and taking control of our assets.

Even the previous governments used to have similar excuses. They used to say there were loss making enterprises which needed to be privatized. That has no place in the present times, so they use the word investments. For example, 40 percent of the Kerawalapitiya power plant is being sold to America’s New Fortress Energy (NFE). That plant is built and we could earn profits in the years ahead. Now it is being sold. The government is handing over the gas pipeline and floating storage system for the Kerawalapitiya power plant with the entire supply of gas to the NFE for a period of 10 years. There is massive waste, fraud and corruption in awarding this contract.

A contract has been awarded to the company without a tender to supply liquefied natural gas for 10 years at a cost of US$ 6 billion. Usually, we need electricity from the Kerawalapitiya power plant only between 6.00 pm and 12.00 pm. The ‘Take or Pay’ (TOP) deal to which we have committed ourselves is hugely disadvantageous as we will be paying for LNG we will not be using because we don’t need it. Could such deals be called investments?

This power plant is to supply around 35 percent of the power generated to the national grid. So NFE will have a near power supply monopoly in this country. It will also have the opportunity to place ships for floating storage near Colombo harbour permanently. These are not investments. If they really are investments, the government should have called for separate tenders for the floating storage and the pipeline and kept the ownership of the plant 100 percent. Gas could have been purchased at the world market prices through spot tender or term tender processes.

Q: The government says that there is economic instability therefore they are compelled to take such decisions. Is this true?

A: It is those whoz had governed this country since Independence, who should be held responsible for the current economic instability. As of now the country’s sum total of debt is nearly 17,000 billion rupees. Our total revenue is not sufficient to pay the loan and interest instalments. In this scenario, the government has solutions such as printing money, taking more loans and selling off national assets to pay the loans. It is said that the government has printed currency notes worth Rs 1,400 billions during the past 20 months. It is a sum equal to total government revenue for a year. This would certainly result in inflation.

People should ask the question why we have borrowed so much. We as a nation are trapped in debt raised for loans taken for mega projects some of which were not our priorities. A country with an economy like this should never have borrowed to build an International Cricket Stadium at Sooriyawewa, an International Convention Hall at Hambantota or the Lotus Tower in Colombo. These are neither essential nor priorities. The loans taken to pay for them were many times their actual cost with commissions ending up in the pockets of politicians. Whenever there are international exposés such as the recent Pandora Papers, many names of Lankans surface. They show how such commissions are stashed away in overseas accounts. What these political leaders do is show people a mega project and take their cut. When the loan cannot be settled they sell off national assets. This is the ultimate consequence of a process known as ‘debt-trap diplomacy’. We are in this plight because of a corrupt political culture.

Q: Hardly a day passes without a protest. Farmers stage protests everywhere in the rural hinterland demanding fertilizer. What’s the JVP standpoint on this fertilizer issue? Do you recommend continued use of chemical fertilizers?

A: The first excuse of the government when they abruptly stopped imports of chemical fertilizers, insecticides, weedicides and pesticides was that this was done to save dollars going out of the country. Then weeks later they said the ban was to save people from kidney disease and cancer. Organic fertilizers are fine but no country can switch from chemical to organic all at once. It is not feasible to ask farmers to go organic in the next Maha season soon after the end of Yala season. Farmers, agricultural scientists and everyone who dared to open their mouths in the Agriculture Ministry repeatedly said that this was not practical. But the President and the government did not listen. Now we are in a crisis. This will surely result in a food scarcity in a few months time.

The government says that it will compensate the farmers for crop losses if that happens. Such compensation would be sufficient only for few months for the farmers. But what about the food shortages? You cannot eat currency notes. This is just another example for the whimsical nature of this President. Apart from that there is a serious doubt whether this is just the beginning of a plan with the objective of compelling farmers to sell their land. When farmers cannot cultivate for two or three seasons, they have no option but to give up their livelihoods. They will have to sell their land or lease them to companies. This is an agricultural country. When agriculture is destroyed this country would go bankrupt in few years time.