“…Foreign investments shall be permitted into all sectors and regions of Sri Lanka. Foreign investors shall be permitted to own one hundred per centum of the shares in entities engaged in such sectors and regions, unless otherwise determined by way of regulations made under the provision of this Part or any other written law…”
– Economic Transformation Bill, p 32, Chapter VIII
By Dayan Jayatilleka.
In Parliament in August 2000, Ranil Wickremesinghe’s UNP torched copies of President Chandrika Kumaratunga’s draft Constitution with its expansive autonomy provisions and tricky transitional arrangements. In 2024 the Opposition should do the same to Ranil’s Economic Transformation Bill, with far better reason.
The Economic Transformation Bill (ETB) is the line of decisive demarcation in Sri Lanka’s politics and contemporary history. It will impact the Presidential and Parliamentary elections.
If the Bill becomes law and is not reversed by an incoming President and Government, it will mark the point at which Sri Lankan capitalist development was ended and Sri Lankan national entrepreneurship buried alive by foreign big business. The project of ‘national development’ dating from 1948, with its foundations laid in the pre-Independence period in the Legislative Council by the Ceylon National Congress, will be ended.
This Bill is the 21st century equivalent of the Waste Lands Ordinance imposed on the island by British colonialism. It should be called the Economic Re-Colonisation Bill or the Economic Transformation Back to Colonialism Bill. Under the guise of ‘equitable treatment’ the Bill explicitly prohibits preferential treatment, i.e., state support, of domestic investors over foreign investors. Thus, it rejects the Asian and especially the East Asian model of development in favour of the obsolete Washington Consensus and the neoliberal model.
The Bill will drastically shift the balance between the national and the foreign in our economy and on the island in general, tilting heavily to the foreign and against the domestic. It will facilitate foreign economic invasion while it condemns and criminalizes the Sri Lankan state safeguarding the national economic space and supporting competition by national enterprise.
Negating democracy
The Bill attacks the cornerstone of our Constitution. Popular sovereignty is the foundation of our democratic Republic. We choose our leaders through regular, periodic elections. In a multiparty democracy, political parties compete by presenting their ideas of what is best for the country. By choosing and voting, i.e., by deciding, the citizens endow a party or candidate with a mandate to put those ideas into practice.
The ETB seeks to establish an ironclad ‘economic Constitution’ within the Constitution. It seeks to freeze economic policy to that prescribed in this Bill, which is so detailed that it actually specifies percentages. This brackets out and renders irrelevant the economic policies which the people would have chosen among competing ideas and sets of proposals more suitable to the needs of that time.
If an elected Government decides that there should be greater balance between agricultural production for export and for domestic food security, it would be unable to do so if this Bill became law and remains on the books, because integration into the world economy and a shift to export production are inscribed in it.
The Bill seeks to establish an ‘economic dictatorship’ or economic policy oligarchy within our democracy. This is the so-called Economic Commission, six members of which are appointed by the President. It is the unelected Economic Commission that prescribes the economic policies to the (largely elected) Cabinet of Ministers: “The Economic Commission shall formulate and recommend to the Cabinet of Ministers the national policies on investment, international trade and investment zones…”
The Bill is Ranil’s ‘Big Bang’ which destroys the state sector of the Sri Lankan economy while exterminating the larger national economic development project and aspiration. It is the local version of the policy adopted on Western advice in Russia in the 1990s by Boris Yeltsin. The West no longer pushes that advice – one of Russia’s US advisors in the 1990s, Prof Jeffrey Sachs, has long since recanted and adopted the opposite view. The effects of ‘Big Bang’ shock therapy were so indelibly ghastly that the Russian public opted for Putin to restore the role of the state, and decades later, remains determined never to return to nihilistic, state-negating ‘Yeltsinist’ 1990s.
Excerpts from a longer article published on Daily FT