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Sri Lanka Shuns West, Finds Solace in Emerging Powers’ Arms

Amantha Perera

COLOMBO, Sep 8 2010 (IPS) - The European Union’s decision to suspend trade preferences for Sri Lankan exports may have finally come into force, but the island nation is not budging an inch on any of the powerful bloc’s recommendations on its controversial human rights record.

On the contrary, Sri Lanka remains adamant about its position against the EU’s proposed measures concerning allegations of human rights abuses committed during the three decades-long civil war in the island nation that ended in May 2009. And President Mahinda Rajapaksa’s administration knows that it is not fighting a lone battle against the EU, having received support from emerging economies like China and India to withstand pressure from the western block.

On the same day the European body ended the Sri Lanka trade benefits on Aug. 15, Rajapaksa ceremonially released water into the newly built Chinese- funded harbour at Hambantota, a southern coastal city in Sri Lanka. The port was built to the tune of 360 million U.S. dollars, about 85 percent of which came from China.

While the EU and even the United States want Sri Lanka to address the human rights issues hounding it, China has called for more international support for the South Asian country.

During last month’s visit to China by Sri Lankan Foreign Minister Gamini Peiris, his Chinese counterpart, Yang Jiechi, said: “Countries big and small have their own problems, and it is important to remember that solutions have to be found to suit the circumstances of each situation in keeping with the wishes of the country in question without hectoring or pressure from outside.”

Last month Sri Lanka forged an 83 million U.S. dollar-agreement with India to reconstruct a section of the northern railway left in tatters by the war that pitted government troops against the secessionist Tamil Tigers.

The two states had previously signed a similar agreement to rehabilitate another section of the same track worth over 140 million U.S. dollars. The commitments are part of a larger package worth 800 million U.S. dollars that India has pledged on concessionary terms to help rebuild the war-ravaged northern side of Sri Lanka.

“India remains committed to continuing its assistance to Sri Lanka as it undertakes the important and challenging task of reconstructing the Northern Province,” the Indian Mission in Sri Lanka said when it announced the new funding.

India is also helping reconstruct houses destroyed in the north during the armed conflict. According to the U.N. India has pledged to build 50,000 out of an estimated 160,000 new houses.

Indian companies are also exploring prospects for expanding their presence in Sri Lanka. The Mahindra group, worth over 7 billion U.S. dollars, announced last month in Colombo that it was introducing new vehicle models into the Sri Lankan market while looking to set up an assembly plant in the country.

“Sri Lanka has been able to stave off pressure brought on by the EU and the western block because other countries like India and China have supported it, especially in the U.N.,” analyst Jehan Perera told IPS.

The EU has accused Sri Lanka of violating international human rights conventions that made the continuation of the trade concessions problematic. It has recommended certain measures to the Sri Lankan government to facilitate the reinstatement of the concessions under the Generalised System of Preference Plus (GSP+), a tariff reduction regime unilaterally granted by the EU.

In 2008 GSP+ was worth around 100 million U.S. dollars, based on EU data. Expected to be hardest hit by the removal of the concession will be the 270,000-strong apparel sector, the country’s biggest foreign exchange earner. Garment exports raked in over 3 billion U.S. dollars in 2009.

Government spokesperson Minister Keheliya Rambukwella told IPS that the conditions imposed by the EU on GSP+ renewal were an insult to the country. “It is nothing short of that,” the minister declared soon after the EU recommendations were made public earlier this year.

Just four days before the GSP+ suspension came into effect, the U.S. released a critical report on actions taken by the Sri Lankan government on possible violations of human rights during the final phase of the bloody civil conflict.

“The principal measures the Government of Sri Lanka has taken to investigate incidents of alleged violations of international law have been the appointment of two commissions, the ‘Group of Eminent Persons’ and the ‘Commission on Lessons Learnt and Reconciliation’ (LLRC),” the U.S. State Department noted.

“The Department of State concludes that the Group of Eminent Persons was ineffective. The LLRC is less than halfway through its six-month term (it was established May 14, 2010). Initial actions taken by the Government of Sri Lanka, including aspects of the naming of commissioners and publication of terms of reference detailed in this report, have raised concerns regarding the LLRC’s mandate and its independence,” it said.

Government has assured the public that no jobs would be lost as a result of the EU’s suspension of the GSP+ concessions. In fact, said Minister Rambukwella, the government expected to increase foreign reserves to 7.5 billion U.S. dollars by the end of this month. A strong currency and reserves on top of increased earnings from other sectors like tourism and foreign remittances will cushion any fallout from the GSP + loss, he added.

Yet such assurances have not assuaged the fears of the workers in the apparel sector, said Achila Mapalagama, who heads Stand-up, a workers’ rights campaign in the Katunayake Free Trade Zone just north of the capital Colombo.

“No one has a clear idea what will happen now that the concessions are gone. We will see within the next six months. For now there is a lot of fear,” she said.

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