Sri Lanka’s GSP and IMF deals at risk

By Easwaran Rutnam

Sri Lanka’s EU GSP+ facility and the agreement with the International Monetary Fund (IMF) is on the fence following the political turmoil in the country.

Both the European Union (EU) and the IMF are keeping a close watch on the developments in Sri Lanka and will decide the next course of action based on how the pendulum swings over the next few days.
Sri Lanka has made commitments to both the EU and the IMF in order to have access to the facilities they offer.

However, a change of government threatens to see a shift in the policies of Sri Lanka which could harm the deals Sri Lanka has with the EU on GSP and with the IMF.

“What we can say now is that we take note of recent developments and are monitoring the situation closely,” IMF Press Officer Ting Yan told The Sunday Morning.

Sri Lanka committed to a change in its tax policy and agreed to a fuel price formula in order to obtain funds from the IMF.

The IMF had commended the Unity Government for implementing a fuel pricing reform and encouraged the introduction of an automatic pricing mechanism for electricity. Sri Lanka was also urged to push ahead with its Vision 2025 policy.

The Maithripala Sirisena-Mahinda Rajapaksa Government has however said it will look to change the tax system and also the fuel price formula.

Sri Lanka also risks losing the EU GSP+ facility if the country fails to abide by its human rights commitments and International Labour Organisation (ILO) conventions.

“All countries benefitting from the EU’s GSP+ trade preferences scheme are required to put into practice and respect key UN human rights and International Labour Organisation conventions. Sri Lanka is no exception,” an EU Spokesperson in Brussels told The Sunday Morning.

The government in 2015 committed to the 27 core conventions to have access once again to the EU’s GSP+ trade preferences.

The EU GSP+ scheme was withdrawn from Sri Lanka in 2010 when Mahinda Rajapaksa was President over his failure to effectively implement the 27 core conventions.

The Rajapaksa-led government however said at the time it was not hurt by the loss of GSP.

The Maithripala-Ranil Unity Government however worked tirelessly to regain GSP from the EU but in recent times it faced criticism over the slow progress on the human rights issue.

Sri Lanka was expected to show more progress by next March but the political crisis has now resulted in those attempts also taking a back seat.Government co-spokesman Mahinda Samarasinghe said that the new government will negotiate with the IMF and resolve any concerns they have.

Samarasinghe stated that the new cabinet has not yet been fully formed, and the policy of the new government is not fully clear.

He further noted that once the new cabinet is fully formed steps will be taken to address the concerns.

Core human and labour rights UN/ILO conventions for GSP+
1. Convention on the Prevention and Punishment of the Crime of Genocide (1948)
2. International Convention on the Elimination of All Forms of Racial Discrimination (1965)
3. International Covenant on Civil and Political Rights (1966)
4. International Covenant on Economic Social and Cultural Rights (1966)
5. Convention on the Elimination of All Forms of Discrimination Against Women (1979)
6. Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1984)
7. Convention on the Rights of the Child (1989)
8. Convention Concerning Forced or Compulsory Labour, No 29 (1930)
9. Convention Concerning Freedom of Association and Protection of the Right to Organise, No. 87 (1948)
10. Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No. 98 (1949)
11. Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No. 100 (1951)
12. Convention concerning the Abolition of Forced Labour, No. 105 (1957)
13. Convention concerning Discrimination in Respect of Employment and Occupation, No. 111 (1958)
14. Convention concerning Minimum Age for Admission to Employment, No. 138 (1973)
15. Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No. 182 (1999)

Conventions related to the environment and to governance principles
16. Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
17. Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
18. Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
19. Convention on Biological Diversity (1992)
20. The United Nations Framework Convention on Climate Change (1992)
21. Cartagena Protocol on Biosafety (2000)
22. Stockholm Convention on persistent Organic Pollutants (2001)EN L 303/60 Official Journal of the European Union 31.10.2012
23. Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
24. United Nations Single Convention on Narcotic Drugs (1961)
25. United Nations Convention on Psychotropic Substances (1971)
26. United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
27. United Nations Convention against Corruption (2004)