The Comprehensive Economic Partnership Agreement (CEPA) has triggered mass paranoia and an upsurge of nationalist sentiment crying out against ‘Indian invasions’. Recently a group of business people presented a petition to the president asking him not to compromise on local businesses in favor of foreign firms.
But how realistic are the protesters claims? and are they based on fact, or conjecture? Most of the fears concern mutual employment with speculation rife that the CEPA will mean the influx of Indians seeking employment in Sri Lanka, and of Indian firms entering the market.
But as a presentation released days before the protests started, on the assumption that the agreement will be signed, shows Sri Lanka has only opened two very highly specialized IT and ship maintenance segments for Indian employment. On the converse India has opened many segments to absorb Sri Lankan employees.
Sri Lanka has allowed Indian firms to set up in the island as well. This is a source of much needed FDI but local industries are arguing that this brings in unfair competition. But information released so far indicates that industries set to be effected are already well established and potentially capable of taking advantage of any new competition.
For further analysis, read the Invisible Hand on this Sunday’s edition of the Leader.