Kingsley T Wickramaratne has been the treasurer of the Sri Lanka Freedom Party (SLFP) for several years. He has been to Jaffna five or six times in the past few years, (in itself, no mean achievement) because as minister for internal and external trade and food, it is his job to see that food and commodities are freely available to all Sri Lankans, regardless of whether they are Tamils or Sinhalese. Wickramaratne, himself a businessman of some standing, speaks to Aditi Padhnis on free trade, the ethnic problem in Sri Lanka and India's role.
Q: Now that a free trade agreement is in place, are there any figures about how much trade has actually taken place between India and Sri Lanka? Investments? JVs?
A: The free trade agreement was signed in 1998 but came into operation only on March 1 this year. It is too early to collect figures. But what is happening now is that both countries are creating awareness about the possibilities of free trade between each other.
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The agreement is a landmark one. We have been neighbours. But we source many products from the outside world. Sometimes our own products come back to us with minor value addition at very high prices. So now we've found a way out of that.
It has been the policy of my party to foster closeness with India. In 1994, when we came to power, the first trip my President, Chandrika Bandarnaike Kumaratunga, undertook was to India. We created a very special relationship _- both political and businesswise.
This is very important. If you find two neighbours doing business together it automatically strengthens the political relationship.
So our business relationship has been strengthened for the last five years since we took over. There is normal business, there is South Asian Preferential Trade Agreement (Sapta) business, and free trade business.
We now have several advantages: the advantage to network between the two countries; to identify products, goods and services coming into the two countries and do joint marketing.
For example, tea _- today, in a larger economic market, tea is not in competition with tea. Our competitor is coffee, not tea. India and Sri Lanka should not compete in tea. We should join together, market our tea together and try to actually get a small portion of the world coffee market.
We should join together and market our expensive tea and look for the richer markets. Increasingly, tea is going to be the health drink of the world. We can take advantage of this together. Like this, there are so many products: tea, coconut, rubber. At the moment, we look at each other as competitors. As a result western and other countries have taken advantage of that. They bargain with us.
As far as Sri Lanka is concerned, I don't think India should be afraid of us. We are so small that you won't even know we're there.
Q: It is the Sri Lankan businessmen who are worried about their market being swamped by cheap Indian goods.
A: In the past goods have been coming to the country even without the FTA. When companies become too large, their structures become unwieldy, they become slow. Large companies have vanished in the past. But today, with the Internet, there's been a marketplace revolution. Companies born on the Internet are faster than the standing companies. Change in the next few years is going to be very fundamental. Obsolescence is going to be the order of the day.
We have to be in tune with this. We've set up a facility with Microsoft in Bangalore and Colombo. We're looking at a Colombo-Bangalore-Seattle axis for software.
Facilities have to move to people and this has to be fast. The French, for instance, discovered that there were a lot of French people doing business in Colombo but there were no French banks in Colombo, so the business was going elsewhere. Now, they've moved a bank to Colombo.
My point is that if we don't change, we're in danger of becoming history.
Q: India still has a very high level of tariffs. Doesn't this hamper trade?
A: We hope to harmonise the tariffs. In my country, tariffs are three-band: 30, 20, 10.
Next year, we'll try to get it to two-band. Then we're going to get it to single band. Where tariffs are high, there's a distortion in the marketplace. We lose to smuggling, under-invoicing, and over-invoicing.
Q: One of the Indian companies which is very happy doing business in Sri Lanka is Ceat. They did a study and found that if only the north and east were brought under control, investment and trade in Sri Lanka could go up by 60 per cent. What is your comment?
A: If the north and east were brought under control we would take off. The basic infrastructure is there. Large companies are there. What Hong Kong had been to China, we could be to the Indian subcontinent.
Q: But the problem is bringing the north and the east under control.
A: My President's aim, when she took over in 1994 was to bring peace to the country. It was her mission. She wanted a dialogue.
Q: But the LTTE broke the cease-fire....
A: It did. Even after that, we believed that whatever we give to the LTTE must be agreeable to both _ my party and the Opposition United National Party (UNP). If we don't come to an agreement about what we're going to do, it is difficult for the Tamil people to believe us, the Sinhala majority parties.
So we devised a package. Around 90 per cent of the people believe in this devolution package given for Tamils. But the leadership of the Opposition is not agreeing to this. We asked the Opposition to give us your amendments. They now want basic changes in the package.
Q: It is not just the Opposition but parties like the Sri Lanka Muslim Congress (SLMC) which are a problem because they want a Muslim province in the east, separate from the Tamil province in the north.
A: SLMC is not a problem. They will fight with us inside the party but they're with us.
Q: What is happening now in Jaffna?
A: We're regrouping north of Elephant Pass. We're fighting. But regrouping doesn't mean Elephant Pass is the only place to safeguard Jaffna. There are other places from which we can safeguard Jaffna.
The tigers are fighting so that they can come to the table for talks. Anybody who wants to come to the table wants to do so from a point of strength. That's what they're trying to do. They're trying to get Jaffna and then talk from a point of strength. Any organisation or party would try to do that. India will also be affected by these developments.
Q: If you got a chance would you ask for military help from India?
A: We did ask for help from India last time and they did give help. India is our next door neighbour. Who else do you go to but your next door neighbour in an emergency?
Q: But last time India was also asked to leave Sri Lanka because President Premadasa referred to it as a `force of occupation'.
A: At that time the government that came (after J R Jayewardene) took a different view of the situation. We don't take that view. Every time India proposed something in an international conference, we supported the proposal. Take the World Trade Organisation (WTO) we were not in agreement with India on labour standards. But when we were attending the conference, it was the policy of my President to support India. I remember, she sent me a fax during the WTO conference, and she said: `Kingsley, whatever India says, don't contest it _ whatever it says you just second it'.
B B Ramiah was representing India then. I told him: `child labour is not a problem for us. But I will support you because my President thinks we should support India'.
Q: You spend so much on defence. If India were to sell you defence hardware, would you buy from India?
A: India has been selling us on a commercial basis. But defence... the concepts have been lost. Instead of looking towards a borderless world we're asking for more borders.
There is also a problem with the Sinhala people. Some of our people also refer to the past while looking at the future. They talk about the Sinhala kings who conquered the world on elephants, like Duttugemanu.
In our party, the Sri Lanka Freedom Party (SLFP), too, there were such elements. But when my President took over, she reprogrammed the entire party. Now we're a Sri Lankan party. We want a united Sri Lanka. And we seek India's cooperation.
`We look at each other as competitiors. As a result western and other countries have taken advantage of that. As far as Sri Lanka is concerned, I don't think India should be afraid of us. We are so small that you won't even know we're there.