ECONOMYNEXT – Senior government ministers in cash-strapped Sri Lanka on Sunday (19) defended a decision to pay 6.7 million US dollars to a Chinese fertilizer company over a deal that had gone awry, as opposition lawmakers decried the move.
Minister of Highways Johnston Fernando told reporters that antagonising a nation as powerful as China will not be in Sri Lanka’s interest in the long run.
“This issue must be resolved amicably. It’s easy for people to say we paid money for a ship of faeces. But antagonising a powerful country could prove more disadvantageous for us in the long term,” he said.
“[Losing] 6 million dollars is not like losing 1.6 billion dollars. China is a country that gave us money when we needed it,” he said.
Sri Lanka’s cabinet of ministers has decided to pay the 6.7 million dollars to the China’s Qingdao Seawin Biotech Group Co Ltd, whose organic fertilizer was rejected by the island nation.
Sri Lanka’s National Plant Quarantine Service (NPQS) had claimed that samples of the fertilizer contained harmful bacteria, prompting the Chinese company to demand 8 million US dollars from the agency in early November.
The shipment was rejected by Sri Lanka while en route to the island, with the authorities denying entry to what opposition lawmakers and other critics had called a ship of faeces.
Sri Lanka’s scientific findings were roundly rejected by the Chinese company, with the Chinese embassy in Colombo going as far as to blacklist the state-run People’s Bank for not making the payment owed to the company.
The Chinese company subsequently sought arbitration in Singapore, and Sri Lanka later decided to settle the matter by paying 6.7 million dollars to the fertilizer company, on terms purportedly agreeable to both parties.
Asked if Sri Lanka can afford to pay such a colossal sum at a time when the country is facing its worst economic crisis since Independence amid a worsening foreign reserves shortage, Minister Fernando told reporters that the money simply had to be paid.
“The cabinet has decided to pay the amount. It must be paid,” he said.
Education Minister Dinesh Gunawardena, speaking to reporters after an event in Colombo said the matter needs to be resolve amicably.
“China is a friendly nation to us, as is India. These matters can be resolved amicably, and the president has instilled confidence in the country that this can be done. That’s what’s important,” said Gunawardena.
“If there are certain shortcomings meanwhile, steps must be taken to correct them,” he added.
The opposition is crying foul.
Main opposition Samagi Jana Balavegaya (SJB) MP Ashoka Abeysinghe told reporters: “These funds are being charged for turning the ship away. The fertilizer must be paid for separately. Some ministers are saying countries cannot be antagonised. What is this government?”
SJB MP Nalin Bandara addressing a gathering said: “This isn’t money from Medamulana (the ancestral home of the ruling Rajapaksa family; not the money in the American bank accounts of Gotabaya or Basil Rajapaksa. It’s your money.”
“It’s 1.4 billion rupees collected from your sugar, lentils purchases, from the reloads bought by young people, to pay for this faeces. Who ever thought Sri Lanka would have to pay for faeces?”
Meanwhile, Environment Minister Mahinda Amaraweera, who represents the Sri Lanka Freedom Party (SLFP), was also critical. The SLFP is a constituent party of the government coalition that is increasingly at odds with the ruling Sri Lanka Podujana Peramuna (SLPP).
“No, we have no such hope on China. I don’t see China saving us or helping us contrary to claims. There is a risk of a coming food crisis. We must prepare for it. We must launch a massive food production campaign, an agricultural operation. Or we’ll be in big trouble,” he said. (Colombo/Dec20/2021)