The Economic Transformation Bill offers imaginary solutions to real problems. The Bill is not a blueprint for efficiency but its antithesis.

By Tisaranee Gunasekara

“The silence is a danger in itself”

Seamus Heaney (The Burial at Thebes)

Ten years: that was how long three State institutions didn’t pay EPF and ETF monies to their retired and deceased employees.

Most victims of this act of criminal injustice suffered and died in silence. A few (about 2,000) filed court cases. The larger society, including the media, political parties and the labour movement, didn’t know, didn’t care.

This injustice happened in the only place it could have been perpetrated with legal, political, and societal impunity: the plantation sector. The culprits were the three State-owned plantation companies. The excuse was that these companies made losses. How many state-owned enterprises make profits? Do the loss-making ones (which include CEB, CPC, and Air Lanka) deny their employees EPF and ETF payments? What would happen if they even tried?

Two weeks ago, the cabinet approved a proposal by President Wickremesinghe to set aside Rs. 5 billion to pay these long overdue monies. The Deputy Minister of Finance “… highlighted the severe difficulties faced by a large number of employees due to non-payment of their provident and trust fund contributions…” (FT – 1.6.2024).

Such impunity is possible because an absolute majority of victims are the most discriminated against people in Sri Lanka: Upcountry Tamils.

Transporting Indians as indentured labour across the British empire began in 1834 and continued till 1917. Many were lied to, some even kidnapped. The first Indian Tamils were brought to Ceylon to pick coffee. They stayed to pluck tea. More were brought because most Sinhalese shunned the work as too onerous and too demeaning. They still do. Now, Up-country Tamils too are moving away from an industry which treats them as less than human, and less than citizens.

As R. Yogarajan, a plantation worker from Ratnapura, explains, the work begins at 6 a.m.; working conditions include leeches and weather variations. Though this is skilled labour, and nationally vital labour, the pay is low. The social attitudes they have to live with are even more unbearable. “The worst is the denigrating way people look at us. All this suffering is to educate (our) children. Our suffering should not become the legacy of our children. We don’t want our children to do this work. Some talk to as if we are animals” (Irida Divaina – 9.6.2024).

The result is a growing labour shortage which might turn Ceylon Tea into a memory within a few decades.

The only solution is to make the work attractive, in terms of pay, working conditions, and employer and societal attitudes. Instead, the plantation companies are planning to hire retired military officers to manage the estates.

War-heroes to keep the coolies in place!

The Tea Board’s solution is replacing underpaid and ill-treated human workers with machines. The Tea Research Institute has, in a 2021 publication, highlighted a host of problems with mechanisation, including inability to harvest tea shoots selectively and the harvested crop containing mature foliage, twigs, and other refuse, requiring manual sorting. Industry experts fear that tea yields could drop by 30%-50%.

Planters Association officials believe that machine harvesting is untenable due to the damage it does to the tree. Undeterred by these expert opinions the authorities are forging ahead, determined to lavish tax monies on another white elephant. “Tea Board and Tea Small Holding Development Authority (TSHDA) will provide 437,000 rupees per acre of tea land for those who follow the new model along with a special irrigation system,” (Economy Next – 25.11.2022).

Last week, the Appeal Court refused a petition by 21 regional plantation companies to issue an injunction against Wickremesinghe Government’s gazette mandating a minimum wage of Rs. 1,700 a day for plantation workers. During the hearing, the AG’s Department pointed out that the plantation companies boycotted the meeting of the Wage Board to discuss the issue. Such impunity is enabled by political and societal indifference. Which continues. The Government is making some amends, but the Opposition, including the JVP, remains silent.

During the 1948 parliamentary debate on that most egregious piece of legislation which wrested from Upcountry Tamils their natural-born right to citizenship, SWRD Bandaranaike (a prime supporter of disenfranchisement) revealed what Jawaharlal Nehru told him during their discussions on the fate of this community: “If you don’t want these Indians here, we will be glad to take them back. What difference will seven or eight lakhs make in a country of four hundred million people? But if you feel that you must have them, if you feel that you cannot be without them, then it becomes a hatter of honour with us that they should be given the rights to which other citizens are entitled” (quoted in Democracy Stillborn – Rajan Hoole and Kirupamala Hoole). Bandaranaike’s response was, “Let them go back. Let us face the economic and other difficulties that arise in our country” (ibid). Now the descendants of these workers are going away. If this economic migration is ignored, if it isn’t handled with intelligence, decency, and compassion, a day of reckoning awaits us.

Economic Transformation Bill: An unfunny comedy?

On the night of 30 March 2023, a BOI garment factory in Katana was attacked. A group of five thugs entered the premises and assaulted the Security Manager. Then they broke into the home of the Managing Director, an Omani national, and attacked him. Both were hospitalised. Complaints were made. Days passed and nothing much happened.

The factory, employing more than 300 workers, belonged to a famous Omani chain. The thugs were reportedly linked to a local politician. The media named deputy minister Indika Anurddha. He denied involvement insisting that the attack was due to an internal issue.

The issue was the factory’s refusal to lease a vehicle belonging to a supporter of a local politician, claimed the Free Trade Zone Manufacturers Association (FTZMA). The statement came a fortnight after the attack and included a demand for ‘swift legal action’ against the culprits. The absence of such action was the clearest indication that the suspects did indeed have a powerful political godfather.

Impunity continued to reign. In May 2023, the Omani owner pulled out.

In February 2024, Israel repeatedly bombed and destroyed the Gaza office building of the Belgian Agency for Development Cooperation, after the Agency refused to cut funding to UNRWA. Israel violates every international law and norm with impunity thanks to unconditional American support.

Whenever American politicians wax eloquent about international law and human rights, one thinks of the tens of thousands of Palestinian children murdered in Gaza; of the five-year old Hind Rajab, trapped in a vehicle damaged by Israeli fire, with dead family for company, pleading, “I’m so scared. Please come.” She died unaided three hours later. (

Similarly, whenever Lankan Minister of Public Security holds forth about Yukthiya (Justice) one thinks of the porter assaulted by Prasanna Ranaweera and the SLPP parliamentarian allegedly assaulted by Mahindananda Aluthgamage. Both miscreant politicians remain above the law. Politics over law. Public security trumped by private impunity.

In its April 2023 statement on the attack on the Katana factory, FTZMA warned, “…if this kind of treacherous act goes unabated, the influx of FDI will not happen and even the existing investors will leave for safer destinations.” That warning resounds when the Government talks of how the Economic Transformation Bill aims at creating an ‘attractive investment climate’. If thugs protected by local politicians can attack foreign investors with impunity, which foreign investor is going to invest here, irrespective of how many laws this or any other Government introduces?

The Economic Transformation Bill offers imaginary solutions to real problems. The Bill is not a blueprint for efficiency but its antithesis. It proposes to replace one BOI with many institutions. This will hike up costs without a corresponding (or even any) increase in efficiency. It will also entrench confusion as a new quotidian. Incidentally, all employees in these many new institutions would be public workers to be paid with public money. So much for slimming the state!

The Bill also aims to place the employees of the many institutions it breeds above the law, by granting them impunity from legal action. Imagine the corruption, the nepotism, the cronyism that would result, the many tidal waves of bad decisions and worse actions, the blindness, the deafness, the world-destroying stupidity.

One of the stated aims of the Bill is the prevention of another economic disaster. The 2022 economic collapse was brought about partly by bad management. A supremely ignorant executive president filled state institutions with incompetent yes men. If the executive presidency continues, this Bill cannot prevent a Gota II from filling state entities with his/her henchmen and women. On the contrary, it will provide a Gota II with an even broader stage on which to act out his/her inanities.

For example, 6 members of the proposed Economic Commission (including the chairperson) are to be appointed by the president. If this Bill had been a law in 2019, one can imagine who Gotabaya Rajapaksa would have appointed to the Commission and what havoc they would have wreaked there. And how much worse off we would have been as a result.

Have we forgotten exploding gas canisters, so soon?

The aims of the Bill are desirable – increasing foreign investment and exports, enhancing female labour force participation, reducing poverty and unemployment. But the Bill doesn’t say how any of these lofty aims could be achieved. After all, if market forces are to prevail, the only investment we are likely to attract will produce nothing other than extremely low paying jobs in very bad working conditions. This would result in ruthless and futureless growth, if growth there be. And the explosives for the next social outburst.

A role for the State

“No one who works full time should be poor,” argues Michael Lind in Hell to Pay: How the Suppression of Wages is Destroying America. Low paying jobs with bad working conditions lead to social unravelling and mental trauma. Yet these jobs are not expendable; on the contrary they are vital to the very survival of the economy and of life. “…society would collapse if all low-paid workers in health care, retail, waste-management, and service industries ‘upskilled’ for jobs in the knowledge industry” (ibid).

Prof. Lind is no Commie or even a leftie, but a solid conservative, a founder of the New American Foundation. Yet he argues that wages are determined not by need but by bargaining power, a systemic truth we can see played out in our own plantation industry. The answer to the mushrooming of low paying jobs is not to wait for the invisible hand of the market to work its supposed magic, but to beef up the bargaining power of workers. This, Prof. Lind points out, needs the state.

Ranil Wickremesinghe is on the right track when he advocates a tripartite set up of government-industry-labour for the plantation industry. It is a necessity for every industry, every sector if we are to prevent job-creation to become synonymous with low wage, no benefit work. For example, if the Economic Transformation Bill is to achieve its explicitly stated aims of poverty reduction, it needs to approach employment from both quantity and quality angles. Or we will continue to haemorrhage skilled workers in waves of out-migration, as has happened with the construction industry and is happening with the plantation industry.

The State as the protector of the weak, as the corrector of imbalances, as the guarantor against impunity is a better role than owner and entrepreneur. We have seen what happens when the State is either indifferent to the plight of the powerless (10 years of non-payment of Provident and Trust Fund monies) or ranges itself on the side of the powerful. The Rathupaswala protest is the best example of the latter, when the Rajapaksa government used maximum military force to protect the interests of acolyte businessman, Dhammika Perera. Three lives were lost. A decade on, justice evades victims and their families.

Hopefully, President Wickremesinghe’s decision to use the State to correct the gross imbalance in the bargaining power between plantation workers and the management would set a new trend. Unfortunately, the chances of such a positive outcome is unlikely. Both the SJB and the JVP are silent on the issue (Sajith Premadasa’s promise to fully implement the 13th Amendment is commendable. The JVP is yet to make such a full throated endorsement). Production economy (nishpadana arthikaya) is not a plan but a slogan. Reducing PAYE tax is not a road to the future but a return to the past. If one cannot tell Elon Musk, James Packer, and George Soros apart (as Sunil Handunnetti obviously failed to) a new Gota, armed with the impunity of new-mint popularity, awaits us at the next bend.

Courtesy:Daily FT