Sri Lanka’s investment promotion minister Sarath Amunugama has staunchly defended the country’s human rights record, as a preferential EU tariff agreement for garment exports comes up for renewal in October.
Sri Lankan garments – which comprise 10% of the country’s exports – have since 2005 enjoyed duty-free access to the EU under the Generalised System of Preferences (GSP+) trade regulations.
The EU has indicated that extension of the scheme depends on human rights being respected, as the Colombo government steps up its military campaign against Tamil separatists. The UK withheld £1.5 million of aid to Sri Lanka in May 2007 over concerns about the government’s aggressive conduct of the campaign.
But Amunugama argued that domestic politics should be delinked from trade deals.
“The GSP+ should not be coupled in the EU to human rights. But nonetheless human rights [conditions in Sri Lanka] are a lot better than in other garment-exporting countries,” he told Emerging Markets in Madrid this weekend.
“We can’t just have a Western media-based description of Sri Lanka’s human rights situation.”
Amunugama suggested “we might not get a full concession” for clothing
products, but the country must be rewarded for its respectable labour standards. “Our apparel industry is a model, as we have no slave labour and no child labour, and we pay our workers very well.”
As the Colombo consumer price index inflation spiked to 30% on Sunday – the highest in Asia – Amunugama vowed to counter soaring commodity prices by reducing the country’s reliance on oil imports by building coal power plants.
He also pledged to further diversify the government’s sources of financing, and reduce debt costs. He responded to a sovereign rating downgrade in April by Fitch, from BB- to B+, that cited vulnerability to debt refinancing in the context of high inflation and fiscal deficits.
“Our debt to GDP ratio has been declining from 102% in 2003 now 86% at end of 2007,” Amunugama said. “Our economic growth allows us to be in a position to pay off our debt. ... Our aid architecture is also changing, we are now getting money from China, India and Iran, who are offering attractive terms.”
The EU’s concerns stem from human rights violations during the 20-year war between the Colombo government and the Liberation Tigers of Tamil Eelam (LTTE), who urge a separate state for the ethnic Tamil minority in north-east Sri Lanka.
In January, the government unilaterally ended a ceasefire accord with the LTTE and has since captured eastern provinces previously held by the Tamil separatists. It is also pursuing a military campaign in the north. Yesterday, the LTTE attacked army and navy personnel at a coastal base in the northeast, reportedly killing three government troops.
But Amunugama said the conflict was drawing to a close. “The east is now fully liberated, and there will be an election in the provinces this month that will allow the east to function as a devolved entity. In the north, we are pursuing the LTTE and they will be forced to surrender.”