Thursday, July 4, 2024

IMF pact: Major changes not possible – Ali Sabry, PC

by malinga
June 30, 2024 1:06 am 0 comment 442 views

Govt winning trust of international community:
RCEP membership, more Free Trade pacts mulled :
Elections will be held on time:

In an exclusive interview with the Sunday Observer, Minister of Foreign Affairs and President’s Counsel Ali Sabry shares insights into Sri Lanka’s evolving diplomatic relations, economic strategies, and internal challenges. Minister Sabri discusses the Government’s proactive engagement with the Muslim world, pivotal bilateral relations with India, efforts to avoid geopolitical entanglements, and the country’s participation in regional economic partnerships.

Q: As the Foreign Minister, do you think the Government and the President are winning the trust of the Muslim world by expressing regret over Muslim burials and also the stand on the Gaza War?

A: Yes, I believe so. Since President Wickremesinghe took office, we have adopted a very proactive approach to engaging with the Muslim world. I have been travelling extensively, and Foreign Ministers from that region have also been visiting Sri Lanka frequently.

We have taken principled stands on the Gaza matter, both at the UN and elsewhere, which has earned us significant respect in the international Muslim community. Recently, I met the Foreign Minister of Palestine, who expressed profound gratitude for our consistent position.

Regarding the burials, the decision to prohibit them at that time was a grave mistake. Unfortunately, it happened, but all we can do now is express our regret and apologise to the Muslims and the affected families. It wasn’t only Muslims who were impacted; some Buddhists who wished to bury their loved ones were also denied. To prevent such issues in the future, we are introducing a new law that will grant people the right to choose either burial or cremation, unless the WHO advises otherwise for specific reasons.

Overall, internationally, we are gaining the trust of the Muslim community. As for the Muslim community in Sri Lanka, whether we are winning their trust remains to be seen. However, they do appreciate the President’s multi-ethnic approach, where he treats all Sri Lankans as equals and does not single out any particular segment.

Q: It is significant that Indian External Affairs Minister Dr. S. Jaishankar’s first foreign visit was to Sri Lanka after being sworn in. What were the significant highlights of this visit?

A: There were several highlights of Dr. Jaishankar’s visit. The most notable was the support extended by India during Sri Lanka’s economic crisis. The close to four billion dollars in credit lines provided by India was crucial; without this support, Sri Lanka’s economy could have collapsed beyond repair. This visit reaffirmed India’s continuous support for Sri Lanka and enhanced our business partnerships.

We reviewed numerous joint projects, including a dedicated Free Trade Zone in Trincomalee and collaboration on educational initiatives with the Indian Institute of Information Technology (IIT) in Chennai. We also discussed potential opportunities in the renewable energy sector.

The visit emphasized two key points: first, our desire to strengthen the economic partnership between our countries; and second, the significance of Dr. Jaishankar choosing Sri Lanka for his first official visit as External Affairs Minister during this period. This underscores the importance India places on its relationship with Sri Lanka, which is very gratifying for us. We discussed the possibility of a high-level visit by Indian Prime Minister Narendra Modi in the near future.

Q: What is the Government doing to avoid getting entangled in any geopolitical conflicts in the Indian Ocean Region, especially through its IORA Chairmanship?

A: We have made it very clear that we are not aligned with any particular camp. We are an independent country and will continue to uphold this stance. Our basic principle and vision are “friendship with all and enmity to none.” We are reaching out to everyone globally.

It is very important for us to avoid tensions or superpower rivalries at our doorstep, whether in the Indian Ocean or in our airspace. To achieve this, we have explicitly said that we are not interested in providing military bases for any country. However, we are open to conducting business with everyone. By consistently taking issue-based positions, we believe we have earned the support of the international community.

Q: With SAARC almost dormant, is Sri Lanka pivoting more towards BIMSTEC and Indian Ocean Rim Association (IORA)?

A: IORA is indeed very active, especially under our chairmanship. We have been undertaking numerous projects almost every month, and this has been very effective. Last year, we hosted the IORA Ministers’ Meeting and the IORA Day celebration. We also conducted sectoral dialogues on maritime security and cruise tourism. Just last week, we held a Business Council meeting in Sri Lanka in collaboration with the Colombo Chamber of Commerce. We are continuously working towards strengthening our engagement with IORA.

Regarding SAARC, it is in a challenging situation due to well-known reasons. While we are keen to see SAARC become more active, it remains in a difficult position. Recently, the SAARC Director General visited Sri Lanka for discussions, and there is a significant amount of work happening at the official level. However, it has yet to progress to the Foreign Minister or summit levels. Until our major neighbours, India and Pakistan, resolve their differences, it may take longer than anticipated for SAARC to become fully operational again. This situation represents a lost opportunity for all countries in the region.

Q: What is the progress with regard to joining the Regional Comprehensive Economic Partnership (RCEP) and having more Free Trade Agreements (FTAs) with countries in the region?

A: The idea behind joining the Regional Comprehensive Economic Partnership (RCEP) and securing more FTAs is essentially twofold. Firstly, no one is going to invest solely based on the Sri Lankan market, which comprises just 22 million people – not a huge market for attracting significant investment.

To address this, we aim to position Sri Lanka as a regional hub, serving a larger market. We can achieve this by establishing FTAs, thereby creating an artificially larger market that is ten or even 100 times bigger than our own. This strategy has been successful for countries such as Vietnam, Bangladesh, Malaysia, Singapore, and Indonesia. By following this approach, we can attract foreign capital and investment, which is crucial for our economic growth, along with technology transfer.

Regarding the RCEP, we have applied for membership and are following the set criteria and procedures. We anticipate visits from the Foreign Ministers of Malaysia and Indonesia in August, and we will continue our discussions with them. We are very keen on this.

In terms of FTAs, we have made significant progress. We have signed FTAs with Bangladesh and Thailand and are currently negotiating with Malaysia, Indonesia, China, and India for more comprehensive agreements. It is essential to approach this carefully to avoid overexposing our market and to ensure that any agreement results in a win-win situation for all parties involved.

Q: At a diplomatic level, what is the level of success with talks on debt structuring with creditor countries and International Sovereign Bond (ISB) holders?

A: Sri Lanka has reached the final agreement on debt restructuring between Sri Lanka and the Official Creditor Committee (OCC) on the sidelines of the Paris Forum 2024 in Paris, France. This will facilitate the restructuring of our debt with foreign creditor countries.

With this agreement, instead of suspending payments, we will secure a postponement of payments and resume paying interest and other dues. This is a significant development for Sri Lanka.

Sri Lanka is on track to be one of the fastest countries to emerge from bankruptcy. For instance, Greece, despite being a European Union (EU) country, took about 11 years to come out of bankruptcy. If we can achieve this faster, it will be a remarkable accomplishment for us.

Q: Several Western countries are still alleging that Sri Lanka engaged in genocide while seemingly ignoring Israel’s actions in the Gaza War. What is your view on this?

A: The situation can largely be attributed to domestic politics in many Western capitals, where pockets of diaspora votes exert pressure on their MPs, who in turn influence their Governments or ruling parties. This phenomenon is likely to persist for some time.

We in Sri Lanka must continue to uphold internal accountability mechanisms. However, the double standards of the West are very evident. The way they address different conflicts, whether in Ukraine or Gaza, is clear for all to see.

Who provides the diplomatic cover, arms, and ammunition that enable the slaughter of innocent, unarmed civilians, particularly women and children, in Gaza? The death toll there has now exceeded 37,000, yet there is no tangible action being taken. Every time the Security Council or UN proposes a resolution, it is often vetoed or blocked.

This double standard is particularly difficult to understand when it comes to Sri Lanka. According to our Constitution, we treat all our people as equals. In any conflict, there will unfortunately be collateral damage, but we fought not against a minority group but against terrorism, and we united our people.

We provided food and immunity to those affected by the conflict, and we have released 94 percent of the land occupied during the height of the war. Today, you can see students from previously war-torn areas such as Mullativu and Kilinochchi entering medical faculties, which demonstrates that Sri Lanka treats all its people with respect and dignity.

Q: Can the President’s term be extended by a referendum or by other legal provisions? What is your view?

A: Technically, extending the President’s term requires amending the Constitution with a two-thirds majority in Parliament, followed by a referendum.

I don’t think it’s feasible, and even if it were, it shouldn’t be done. The people must endorse and give the power to carry out reforms to whoever is in office. I believe the President has done enough to go before the people and lay a strong claim for another term, given the significant improvements from two years ago to today.

People may express various personal opinions, but the President himself and the Government are not interested in postponing any elections, particularly the Presidential Election (PE). It will be held as per the Constitution.

Q: Who will you be supporting at the PE and would you back a Sri Lanka Podujana Peramuna (SLPP) candidate if it were a choice between President Wickremesinghe and SLPP?

A: We have to wait and see how things unfold. Personally, I feel that President Ranil deserves another term for the betterment of the country. These economic reforms are challenging and require foresight and knowledge to implement effectively. I do not see anyone else who could accomplish what he has done.

Internationally, he has gained many supporters and admirers in multilateral organisations such as the UN, World Bank, and IMF. He has also garnered support from the international community, including both Eastern and Western countries. I believe it would be beneficial for the country if he could remain in power for another term.

Q: Many have perceived the President’s recent statements on the Supreme Court as a violation of the independence of the Judiciary. What do you think of this?

A: Supreme Court judgments, like those of any other body, are open to legal criticism. The President has exercised this right. However, it is crucial that all branches of Government – the Judiciary, Executive, and Legislature—respect their boundaries and roles.

Intellectual criticism of judgments is normal and happens daily. Beyond that, we should observe and ensure that all branches maintain their independence and integrity.

Q: There have been remarks made by the Opposition parties about renegotiating the deal with the International Monetary Fund (IMF). Could you elaborate on whether it is possible to renegotiate or what possible amendments can be made?

A: While discussions with the IMF are always possible, fundamentally changing the scope of the agreement is not feasible. The parameters, such as the percentage of GDP that should be taxed and the proportion allocated for foreign loan repayment, must be adhered to by any administration.

While the approach to achieving these targets can be negotiated, major changes to the IMF agreement itself are unlikely. Such discussions by Opposition parties are often more about election rhetoric than practical policy changes.

Pic by Dushmantha Mayadunne

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