Developing Mattala Airport

New pragmattic apporch needed

by Dr Janaka Ratnasiri

The Cabinet of Ministers at its meeting held on 27.02.2020 has decided to grant several concessions to airlines operating through Mattala Rajapaksa International Airport (MRIA), with a view to recommencing the International scheduled airline flight operations at the MRIA, based on a paper submitted by the Minister of Tourism and Civil Aviation. Among the concessions granted are waving off the embarkation tax, discounts on ground handling charges and supplying fuel at discounted prices. This will naturally reduce the revenue from the Airport.

Mattala as a tourist hub

However, a more sensible and pragmatic approach would be to develop MRIA into a tourist hub catering for tourists visiting the Southern and Eastern Provinces. The WildLife Park Yala is known to have the highest density of leopards in the world. Arugam Bay is known to be one of the finest coasts for surfing. Elephant herds seen at Minneriya cannot be matched anywhere else in Asia and beaches on the Southern and Eastern Coasts are unique providing serenity and tranquility to tourists. Bird sanctuaries in the East and South coasts are known the world over. With so many attractions, it is not too difficult to attract tourists to this part of the country. Even now, Yala attracts the second highest number for tourists (311,400) after Sigiriya (595,000) in 2018 (Annual Statistical Report 2018, SLTDA).

In addition, there are several national parks (NP) such as Uda Walawe NP, Lunugamvehera NP, Gal Oya NP, Maduru Oya NP and Wasgamuwa NP which are attractive tourist destinations, in close proximity to Mattala. An effort should be made to bring tourists, interested in visiting these sites, direct to MRIA. With the development of Trincomalee and the Eastern Coast as tourist areas, these too could be included with accessibility, if necessary, via helicopters. Archeological sites unique to Sri Lanka at Anuradhapura, Polonnaruwa and Sigiriya could also be added for visiting, via helicopters, from MRIA. All these sites could be incorporated into different packages. The potential is vast for the development of tourism in the forestry sector covering national parks, bird sanctuaries, ancient cultural sites and so on, according to former Conservator General V R Nanayakkara (The Island of 17.03.2020).

Developing a tourism plan utilizing Mattala

A short-term tourism development plan needs to be formulated as a joint exercise among all stake holders, including the Ministry of Tourism, Provincial Tourism Authorities, Sri Lanka Tourist Development Authority (SLTDA), Sri Lanka Tourism Promotion Bureau (SLTPB), Sri Lanka institute for Tourism and Hotel Management (SLTHM), Civil Aviation Department, Hospitality Sector Associations and Private Tourism Promotion Organizations.

It is essential to first develop infrastructure facilities both in and around MRIA as well as at the intended tourist destinations. Secondly, transport facilities, including helicopters, to visit distant destinations need to be easily available at international rates. Thirdly, the services offered by hotels and tour operators should be of the highest order. Finally, a well-planned promotion scheme should be launched internationally in a transparent manner, possibly in collaboration with an international tour operator.

If the demand for these tourist destinations is established through such an advertisement campaign, international airlines will automatically select MRIA as the preferred destination to fly to Sri Lanka with or without concessions. But it requires hard and honest work by everybody concerned. Government intervention is necessary, initially, to provide fiscal concessions not only to airlines operating through MRIA but also to international tour operating agencies bringing tourists via MRIA.

Sri Lanka Tourism Strategic Plan 2017-20

In the meantime, as part of the Government’s Economic Vision for 2025, announced in 2017, the Tourism Vision (TV) 2025 was developed in 2016 which is a strategic positioning of Sri Lanka in the international tourism market, which sets the foundations from which the sector can build. (visit the site https://www.srilankatourismalliance.com/wp-content/uploads/2019/05/Sri-Lanka-Tourism-Vision-2025.pdf). The TV 2025 designated five tourism regions for planning purposes: Colombo and Western Megapolis Zone, Cultural Heartland and East Coast Zone, North and North Western Zone, Southern Coastal Zone, and the Hill Country Zone.

In order to realize the targets set forth in TV 2025, the Ministry of Tourism has also developed a "Sri Lanka Tourism Strategic Plan (SLTSP) 2017-2020. This Plan has addressed several issues pertaining to development of tourism, including Improving governance and regulation; Marketing; Developing sustainable destinations; Lifting standards and Engaging local communities among others. Visit the site: http://www.sltda.lk/sites/default/files/tourism-strategic-plan-2017-to-2020.pdf. This strategic plan has been prepared as an instrument of transformation, as a start on the journey toward TV 2025.

In the SLTSP, however, only passing reference has been made for utilizing the presence of MRIA for developing tourism in the area. It only says that "Mattala International Airport is a significant infrastructure investment that is underused. Despite its many shortcomings, it offers opportunity for tourism as a future hub convenient to a number of marine and land-based wildlife hotspots and the highland tea areas".

Hence, it is important that a new strategy has to be worked out when preparing the SLTSP 2021-2025, incorporating measures to be included to make the MRIA a tourist hub for the South and East as outlined previously. If the proposed strategy could be implemented, it will enhance the revenue from MRIA substantially.

Case of Arusha, Safari hub in East Africa

In this respect, it is pertinent to mention the case of Arusha, a hub for Safari tours in East Africa. Arusha is a small town in Northern Tanzania bordering Kenya. With an elevation of about 1,400 m, it has a pleasant climate and is the venue for an International Conference Hall. Several decades ago, the writer had the opportunity to visit Arusha to attend an international conference held there and visited a few game parks around. Arusha is a gateway to safari destinations and to Africa's highest peak, 5,895 m Mt. Kilimanjaro, lying some 100 km northeast. To the west lies the famous Serengeti National Park, home to wildlife, including lions, rhinoceros, giraffes and leopards, and several other games parks.

What is noteworthy about Arusha is that it attracts many international airlines coming directly from the USA and European countries, including France, Germany and Scandinavian countries, bringing plane loads of tourists for heading straight to game parks, bypassing the capital city. Sri Lanka has two dedicated bodies for the development of tourism in the country – SL Tourism Development Corporation and the Sri Lanka Tourism Promotion Bureau. It is their duty and the responsibility to update the SLTSP covering the period 2100 -2025, incorporating measures to convert Mattala into another Arusha bringing plane loads of tourists heading for such places as Yala, Arugam Bay, Horton Plains, East Coast and the Cultural Triangle.

For such a system to work in Sri Lanka, it is essential to have a governing system in the country where competent professionals, having the necessary background, are appointed to management positions in various semi-government institutions, solely on their merit. Another important pre-requisite for increasing the inflow of tourists is to ensure that law and order prevail in the country. The present situation in this regard is nothing but pathetic. The tourists should be made to feel that they are safe and secure here without exposure to unruly elements, including drug addicts, pimps, rude taximen, dishonest hotel staff and corrupt law enforcing officers.

MRIA as a transit centre between Africa and Far East

Another option available for the development of MRIA is to attract tourists travelling between Africa and SE-Asia and the Far East, to transit, via Mattala. For this purpose, a direct flight between Nairobi and MRIA needs to be commenced. Nairobi is the aviation hub in Africa, with convenient connections to all major cities in Africa. But Colombo has no direct flights to Nairobi and a traveller has to fly, via ME. These two cities are both close to the equator and hence their distance apart is the shortest, compared to travelling via ME.

Nairobi is the home for the United Nations Environment Programme (UNEP) where regular meetings are held year-round bringing large number of delegates from Asia. Also, many affluent Africans fly to SE- and Far East on shopping sprees. Both these groups of travellers could be attracted via MRIA by having direct flights to Nairobi and convenient connections to Far East cities. They could also be offered stop-overs with tour packages to visit places of interest in the region.

Incidentally, the Cabinet has already granted approval, at its meeting held on 19.07.2019, to commence a bilateral air service between Sri Lanka and Tanzania. It is not known what the rationale for selecting Tanzania’s Dar es Salaam (?) airport for launching this service. It could be that landing rates in Dar es Salaam are lower than in Nairobi. But increased traffic from Nairobi would compensate for that. However, commonsense dictates that Kenya’s Nairobi is a better airport with connections to all major cities in Africa and truly an aviation hub, to launch an air service between Sri Lanka and Africa. The new government may therefore wish to review this decision to shift the destination from Tanzania to Nairobi.

Tourism Strategic Plan (SLTSP) 2021-2025

The writer believes the authorities responsible for developing the SLTSP 2021-25 will give serious consideration for the proposals made above and develop Mattala both as a tourist hub for the Eastern and Southern Provinces as outlined above and as a transit centre for travellers between Africa and Asia. It will not only bring added revenue to MRIA, but will also assist in uplifting the economy of the region.

Source: www.island.lk (01 April 2020)

Sri Lanka's Trade Policy

By Gomi Senadhira
Former Director General of Commerce

The recent article by the former Director General of Commerce Ms Sonali Wijeratne (Is there a national trade policy for Sri Lanka?) published in your newspaper illustrates the major problems about the trade negotiations and policy formulation in Sri Lanka. She has apparently written this article to provide "… some clarity, truth and also understanding" to the apparent confusion created by the conflict of opinion between the Professional National Front of Sri Lanka, which vehemently claim that Sri Lanka has no Trade Policy and my position that "Sri Lanka does indeed have a Trade Policy." Unfortunately, her attempt to provide "… some clarity, truth and also understanding as to why the present confusion has arisen" … has added further confusion to the discussion on this subject.

The Department of Commerce is Sri Lanka’s main agency dealing with trade policy and trade negotiations. The mission of the department is, as stated on its website;

Promote

"To develop and promote Sri Lanka’s foreign trade relations at bilateral, regional and multilateral levels by the effective implementation of government trade policy, with a view to raising the standards of living and realizing a higher quality of life through the increase of total production, income and employment levels, thereby actively contributing to the overall economic growth of Sri Lanka.

The DoC is responsible for foreign trade policy formulation, and all related coordination and implementation matters, with the objective of developing and promoting Sri Lanka's foreign trade relations at bilateral, regional and multilateral levels."

The department has a number of trained trade policy specialists. The department is also the focal point for technical assistance on trade policy related capacity building, which, in the recent years, included two large, EU funded, multi-year projects.

So, when the newly retired DG/Commerce says "… It is an irrefutable fact that there was no informed, credible nor coherent trade policy", or "… the need for a National Trade Policy for Sri Lanka is paramount." it is a matter of serious concern. Did the Department of Commerce, under her leadership, failed in its key mission, the effective implementation of government trade policy. Or, if there is "no informed, credible nor coherent trade policy" how was it implemented effectively? Did the DG advise the government about the need for a National Trade Policy? Or, are we talking about different trade policies?

Simplest

As the simplest of trade policy terms used in the trade negotiations are difficult "… for the laypersons and newcomers to penetrate" the WTO has published a Dictionary of Trade Policy Terms. The dictionary defines the term "Trade Policy" as; "the complete framework of laws, regulations and international agreements and negotiating stances adopted by governments to achieve legally binding market access for domestic firms." Every country has a trade policy that fits into this definition.

The trade policy of Sri Lanka is the complete framework of laws, regulations and international agreements and negotiating stances in place. It is not a detailed proposal or a set of decisions about how to do something in the future. Though, these laws, regulations, international agreements and the negotiating stances change constantly, at any given time, any country has a trade policy and Sri Lanka too has a trade policy. If someone says "Sri Lanka has no trade policy" then s/he has not understood the meaning of the term "trade policy."

Trade policies
The best place to find the trade policies of the WTO members is the WTO TPRM website, where comprehensive information available on the trade policies of the members. That includes Sri Lanka’s Trade Policy, which is simply a compilation of information on the trade related laws, regulations and international agreements and negotiating stances adopted by the government of Sri Lanka.

The WTO reviews cover all aspects of trade policies of the members, with particularly emphasis on the WTO compliance. Any trade policy analyst should understand that it is difficult, if not impossible, to review the WTO compliance of a country’s trade policy without comprehensive coverage of all trade policy related issues. It appears that the former DG/ Commerce has not understood the role and functions of the WTO Trade Policy Review Mechanism (TPRM), even after "participating and spearheading" one of such reviews.

The former DG also claims "Policy Prescription that attended the SLSFTA as well as other proposed FTAs were entirely based on Political Policy Prescription of the Cabinet Committee on Economic Management… Thus was the official Mandate given to the Ministry of International Trade & Development Strategy to negotiate Free Trade Agreements with India, China, Thailand and Singapore in parallel! Such are the flimsy, naïve and shallow assumptions based political policy prescriptions that cannot be taken by any rational human being as one constituting a Trade Policy!"

Bad decision

The decisions by the Cabinet to negotiate FTAs with India, China, Thailand and Singapore in parallel, based on "flimsy, naïve and shallow assumptions", may have been a bad decision or one of the worst trade policy decisions, because of the type of the negotiators and advisors appointed to carry out that task. However, "flimsy, naïve and shallow assumptions" or the preparatory work was not a part of national trade policy. Only the decision to commence negotiations turn into a small part of the negotiating stances adopted by government to achieve legally binding market access and becomes a tiny part of the national trade policy. A FTA becomes an important part of trade policy only after it is concluded and signed. For example; few years ago Sri Lanka negotiated FTAs with Thailand and Iran due to "political decisions" to do so. Those were badly negotiated agreements and, fortunately, never became a part of our trade policy. But the FTA with Singapore, with all its problems, unfortunately, became a part of our trade policy.

Political decisions to launch FTA negotiations are not uncommon. The decision to negotiate U.S.- Singapore Free Trade Agreement was taken by two men, President Clinton and Prime Minister Goh, during a late-night round of golf! If you study what happened after those two decisions (the decision by the Cabinet and the decision by two men during a late-night round of golf) and the two agreements, it is possible to identify the problems with the SLSFTA. The problems are mainly with the agreement.

When President Clinton and Prime Minister Goh agreed to negotiate a FTA, it was believed that an agreement with Singapore, a small, very open, market-oriented economy, should be "easy" to negotiate and could be concluded in two months. But it took two years. That was because, in trade negotiations, most of the real and complex issues crop up only after the negotiations start. Though, doing homework on the feasibility of a FTA (please don’t call this trade policy) prior to the commencement of any such negotiations is important, that amounts to very small part of the work involved. Real work begins only when the negotiation starts and the level of ambition is set.

The problems with the SLSFTA are with our negotiators (including the DG/Commerce) and what they did or didn’t do during the negotiations and even after the conclusion of the negotiations. So, don’t blame the politicians or the "Political Policy Prescription".

Shocking

The comments by the former DG Commerce on the proposed FTA with Thailand are even more shocking. She says, "In the case of the proposed FTA with Thailand, the study to ascertain benefits for Sri Lanka by entering into such Agreement laughably enough commenced after the negotiations began! The high level political decision making to enter into negotiations had already been made by key Cabinet Ministers… It is a puzzle to figure out what professional officials could negotiate sans a National Trade Policy….!"

Didn’t she know that between 2001 and 2011, Sri Lanka negotiated two FTAs with Thailand, one bilateral and one regional, and the Department of Commerce had done sufficient studies on a FTA with Thailand, "including the market access requirements/capacities of stakeholders vis-à-vis the competiveness, strengths and weaknesses of the goods and services supply base of Sri Lanka to Thailand and vice versa". One such cost-benefit analysis was carried out just before what would have been last meeting to finalize the BIMSTEC FTA. Then the conclusion was – don’t do it, as the agreement was heavily favourable to Thailand. This was followed up with the stakeholder consultations, where they were briefed about the possible adverse implication. At that time, the department, not only recommended against signing of the BIMSTEC- FTA, but also lobbied, discreetly but strongly, against it.

But when the department was informed that as the BIMSTEC - FTA was mandated by the Heads of states, the department was obliged to continue with the negotiation, damage control measures were initiated by reducing the level of ambition to minimize the adverse implications of the agreement. Sri Lanka’s stance was supported by all the members, other than Thailand. All the relevant information was available in the department. All that was required was to update those studies, after the high level political decision was made to relaunch FTA negotiations with Thailand, and the brief the government and the stakeholders appropriately. Any professional trade official would have done that without any difficulty.

Easy prey

Same applies to proposed Bangladesh FTA. Though the former DG says "In the case of proposed Sri Lanka/Bangladesh FTA, too, political imperative over trade policy continued to hold sway…, Sri Lanka would be an easy prey in negotiations!" any professional trade negotiator should be able to negotiate mutually favourable agreement with that country as Sri Lanka has two F/PTAs with that country and is in the process of negotiating a third FTA (BIMSTEC). The Department of Commerce has enough information, to prepare for the negotiations. But as I said earlier, the real work begins only when the negotiation starts and the level of ambition is set. But Sri Lanka is in a position to negotiate a balanced agreement with that country without becoming "… an easy prey."

If the negotiations are not moving well with any of the FTAs, the negotiators should brief the "Political Masters" appropriately. Take for example, IOR-ARC FTA, BIMSTEC FTA, Iran FTA, Thailand FTA (which was negotiated earlier) where the department informed the decision makers that these agreements are not favourable to Sri Lanka. For example, take the Sri Lanka – Iran FTA. The agreement was negotiated and finalized before the high profile visit of Iranian President Dr. Mahmoud Ahmadinejad to Sri Lanka and was one of the agreements to be signed during the visit. However, the department advised the government against signing the agreement. It didn’t "discreetly, but voluntarily" withdraw from its responsibility of advising the "Political Masters", even when, the department was the lead negotiator for Sri Lanka for that agreement. After all, that is the role and the responsibility of the department. If the Department of Commerce, as the key government agency on trade policy had failed to carry out its mission don’t blame the "Political Masters". It is department’s and its Director General’s responsibility to advise the government. Did the department fail in its key mission? Did the department wasted all the funds received from the donors (including the ongoing EU/ITC project) to develop the capacity building in the area of trade policy?

If so, look inward. It is not very difficult to identify the problems. Then try to understand what trade policy means and the difference between the terms "trade policy" and "trade strategy". For example, do we have an Asian trade strategy? Do we have a strategy (for Post-Brexit) trade with the UK? Then more urgently and most critically we need short, medium, and long term strategies to meet the challenges stemming from the unprecedented disruption to the global economy and world trade by the COVID-19 pandemic. Some countries have already notified to the WTO the trade policy measures they have initiated to face this crisis. We could learn from those notifications and develop our own policy options.

Source: www.island.lk (01 April 2020)