Trade: A New Leverage

by Peter Ratnadurai, June 4, 2009

Events of the past month have, understandably, taken a heavy toll on the global Tamil community. What I find difficult to comprehend, however, is the re-emergence of the 'slave mindset', which was supposed to have faded in our most recent sacrificial, glorious history.

The p rimary argument for apathy is that with the Tigers' conventional military loss, we Tamils have exhausted all available leverage in negotiating with the Sri Lankan state for equal rights.

When I mention trade as a leverage, many point to the 'boycott', of which I am already aware. Indeed, lately, all Diaspora-owned shops and restaurants have abstained from stocking 'made in Sri Lanka' goods. Innovative alternatives for the likes of 'lemon puffs' are, in fact, ensuring that monies otherwise destined for the Sinhala state are actually contributing to the informal global Tamil economy.

Yet, our boycott alone is not enough. At most, the million strong Diaspora probably accounted for around US$ 300 million worth of trade with Sri Lanka. While the current initiative is welcome, in the absence of the military leverage, Tamils have to take the extra step to cultivate more powerful alternatives.

Exports

Sri Lanka is an export-dependent state. Given an absence of vast quantities of oil and minerals, much of its exports are manufactured goods. So, despite powerful allies like China, Iran and Pakistan, the Sinhala state is dependent on trade with the West for its economic survival; unlike, Sudan and Burma, for example, who can afford to ride on China's back, because they have oil and gas.

In 2007, Sri Lanka exported US$ 7.26 billion worth of goods. Five countries, US, UK, Germany, Belgium and Italy, accounted for more than 55% of all exports.

Clothing

In 2007, Sri Lanka exported US$ 3.15 billion worth of clothing; at 43% of all exports, this is a vital sector.

Of that, 95% was to US, UK, Germany, Belgium, Netherlands, Italy, Canada and France. Do those countries ring a bell? Yes, they are Western states with significant Tamil Diaspora populations. Sale of clothing in these countries contribute around US$ 3 billion (40% of all export earnings) to the Sinhala state's coffers.

United Kingdom

The UK imports US$ 782 million worth of clothing from Sri Lanka. While it is difficult to get hold of actual figures, three names, Marks and Spencer (M&S), Anne Summers and NEXT, are mostly mentioned in all meetings and literature on UK trade with the Sinhala State.

Marks and Spencer

A conservative estimate is that M&S, UK's largest clothing retailer, imports garments worth around US$ 500 million from Sri Lanka.

M&S has hundreds of stores across the UK, with the largest in Marble Arch, London. The company targets the 'middle class' market, which doesn't simply shop for the cheapest. It also spends more than US$ 170 million on 'branding'.

The company has adopted an 'ethical trading' policy that includes a 'fair partner' initiative to ensure that child and forced labour are not used in production, as well as humane conditions are provided to workers employed without discrimination. MAS Holdings and Brandix Lanka are its main trading partners in Sri Lanka.

Leverage

Tamils' most significant current leverage is our capacity to halve Sri Lanka's exports - an event that would not be welcome by the Rajapaksa regime, or its supporters, many of whom are themselves employed in the garment factories.

Through persistent protest, the Diaspora can force brand-oriented retailers, who will not want to have their names dragged into human rights abuses and war crimes, to stop trading with Sri Lanka. In particular, the 'middle class' retailers such as M&S, Anne Summers, NEXT and GAP Inc., are extremely cautious about brand associations. Significantly, they are the Sinhala state's main trading partners.

Protest

First responsibility for exercising this leverage, in my opinion, rests with the British Tamils Forum (BTF), the largest association of Tamils in the UK with more than 100, 000 members. Given the number of Tamils spread across the UK, many within walking distance of local M&S stores, our community should be able to organise high impact protests to rival that of the anti-fur campaigners.

The Tamil Youth Organisation (TYO) has led a praiseworthy non-stop campaign, in its 10th week now, at London's Parliament Square. The need for youth involvement in the trade protests cannot be emphasised in greater terms.

Potential

The Diaspora should not be discouraged by previous failed initiatives.

Unlike the GSP+ campaign, targeting the actual brand is likely to be more fruitful. Governments can, and obviously do, ignore concerns of rights abuses in the name of 'national interest.' Brands, on the other hand, cannot afford to generate negatively publicity for any reason. A day of Tamil protests has the potential to undo any positives achieved by the US$ 170 million M&S spends every year on 'branding.'

Most importantly, action must be immediate.

For best results, protests must coincide with current, largely negative, British press coverage given to Sri Lanka. The Times, UK's largest circulating broadsheet, has adopted the plight of Tamils as a worthy cause. Protests timed to concur with it are likely to show relevance.

Secondly, the world is in recession. Clothing sales are on the decrease. M&S recorded a fall in sales for the most recent quarter. The company is obviously looking to cut suppliers. Diaspora action now would ensure that suppliers on the chop are Sri Lankan ones that are contributing to the pathetic treatment of our people in Eelam.

Caution

A general response from M&S would be that if trade is suspended, the 'poor' in that country will be most affected. Sri Lanka, being a democracy, as it prides itself, has the potential to be influenced by the 'poor.' Murder, committed by a 'poor' person is no more acceptable than that committed by the 'rich,' however. It must be stressed that all garment factories are based in the south, and only benefit the Sinhala community, which, at best, remains indifferent to their government's treatment of the Tamils.

Note: This article was inspired by Mr J's Call to Organize Picketing of Stores and Peter Bregman's Play the Game You Know You Can Win.

For Sri Lanka export figures [2007 is the most recent available full year], see http://www.doc.gov.lk/web/down/3.pdf

For more resources, check No To Sri Lanka