How should we think about the e-NIC program? Prof Mehta offers insights from India's experience

With the recent passing of regulations, the Sri Lankans government to issue new digital id cards with a central database of citizens have come under scrutiny. When Advocata hosted Indian political analyst Prof Pratap Bhanu Mehta earlier this year we asked what lessons Sri Lanka can learn from India's digital ID project Aadhar


Q: Sri Lanka is planning to introduce a digital Id called the e-nic project. In India, you have experience with the Aadhar project that’s digitized millions of identity data. What can we learn from this in Sri Lanka

A: This is something that is going to be a big challenge for the future. There is no question in terms of ease and convenience. Some form of digital ID is very attractive. There’s almost a kind of utopian romance people associate this notion of, one ID, one authentication and all services open up- you don’t need multiple cards, multiple agencies.  Certainly we want a way of redeeming the promise. You can’t roll back the tide of technology and in any case we’re doing that with private companies, Google, Facebook all the time, so why not harness for a public purpose?

I think the real danger is that these are tools of surveillance and and these are also tools of control and you need to see new, robust privacy legislations. You need a consent architecture for it- how is this information is going to be used? and what are you consenting to when you use this ID. You need an information architecture -- who is allowed to share what and with whom? Because with that digital ID, depending on how it is designed, can potentially reveal a lot of information about a person. It has to be embedded in deep institutional safeguards.

In India, the worry is that -- and most of us were moderate proponents of Aadhar -- we are rushing into the ease and convenience part, but frankly there is very little protection on privacy and almost no protection on surveillance. And as the experience of democracy is globally showing you have to safeguard against the possibility that authoritarian elements within our societies might use this information and data to control and surveil populations, and you need safeguards against that.

Prof Mehta who was an earlier a moderate proponent of Aadhar wrote a hard hitting Column on the project arguing the project has gone too far.  Sri Lanka’s e-NIC project is even more casual on concerns around privacy and transparency.

The video of the exchange is below

Expanding Trade with India : Winning with Competition or Cowering under Protection?

By Anushka Wijesinha

The article originally appeared on the Daily Mirror on April 29, 2015

In preferential trade agreements, we often see the potential losers being the most vociferous and more organized, while the gainers are quieter and more fragmented. This has been a typical characteristic of the debates on the India-Sri Lanka Free Trade Agreement (ISFTA) and the proposed Comprehensive Economic Partnership Agreement (CEPA) as well. But Sri Lanka must be careful of letting one side be heard more – by the public as well as by policymakers – than the other. More eclectic and informed debate representing all sides is essential, which is why I look forward to moderating this afternoon’s National Chamber forum on ‘CEPA and Its Implications for the Sri Lankan Economy’ – the first by the private sector following Indian PM Modi’s visit and announcements by both him and the new Sri Lankan government that they would forge ahead with the deal.

Deeper Engagement

The proposed CEPA would expand the current ISFTA to cover services, investment, and economic cooperation. The agreement was to take in to account the massive asymmetry between the two countries (economic size, population, etc.), afford Sri Lanka a more than disproportionate advantage, and allow for partially or fully restricting sectors it didn’t wish to open up right away. Following aggressive lobbying by narrow nationalist business leaders with close political affiliations, there was an eruption of uninformed and exaggerated sentiments against promoting greater commerce with India over the past few years. These groups successfully scuttled efforts at completing the CEPA deal several times in the past. “CEPA” became such a taboo word that the India-Sri Lanka Joint Statement in January 2013 avoided using that terminology, and referred to a “special economic partnership framework” instead!

Problem with Protectionism

It is not surprising that protectionist trade lobbies have emerged so influential. Sri Lanka has been sliding backwards in its openness to the world. For around 10-15 years now, protectionism has been on the rise and there has been a creeping up of applied tariffs and para-tariffs. A tangle of para-tariffs has now effectively doubled nominal protection rates to over 20%. Simultaneously, successive Budgets have introduced a range of ad hoc, special protection and promotion schemes for various domestic industries and indigenous enterprise. While this is not an unprecedented industrial policy approach, it does serve to weaken competitiveness of Sri Lankan firms. I recall a conversation with a business school friend of mine who started a high value added spice export operation out of Sri Lanka some years back. He lamented about the severe protectionist behaviour from local spice industrialists even though the project had been given the green light by the necessary authorities. Economic theory and evidence amply proves that in the presence of protection and in the absence of competition, firms become more complacent, less innovative and dynamic, and less able to face international markets. Is this what has happened to Sri Lankan firms vehemently against expanding trade ties with India? Ill-prepared for competition, cushioned by industrial policy that afforded special comforts?

 Government Must Play Smarter Role

It is incumbent on the government to ensure that stakeholder concerns are heard and addressed; that as much transparency as possible is maintained (without of course compromising the country’s negotiation position), and information is shared more comprehensively and consistently so as to prevent groups with narrow vested interests being able to misinform an mislead. Most importantly, the government cannot let the agenda be highjacked and held hostage by narrow interests groups, like in the past. A bilateral trade or economic partnership agreement that Sri Lanka enters in to affects not just a handful of firms and their employees but hundreds of other firms, hundreds of thousands of employees, and millions of consumers in Sri Lanka. The government must provide a clear policy direction on its economic engagement with India, making a strong departure from the ambiguous statements of the past – i.e., calling for a ‘special economic partnership agreement’. Meanwhile, although I did acknowledge at the start that the gainers from freer trade are often fragmented, less organized and less vociferous, it’s time that changed. Consumer and producer groups that gain from freer trade must speak up.

Opportunity to Win Big or Cower Down

Whether its called a CEPA or any other variation of it, the fact remains clear – it is in Sri Lanka’s interests to deepen economic ties with India. An agreement must be forged that cleverly expands Sri Lanka’s economic interests – those of our firms and our consumers; not a narrow few of them, but the wider many. To those who claim that it threatens our national interest, we must remind them that expanding our trade interests for the benefit of the many is also a part of our national interest. Just the opportunity to tap in to India’s growing middle class alone, set to be over 250 million this year – 20 times our entire domestic market – can be transformative. There are Sri Lankan firms with quality products that can and must break in to India. There are service providers, including dynamic Sri Lankan start-ups like Trekurious – a provider of unique lifestyle experiences – that have already entered India and demonstrated early success. A bilateral agreement will ensure that the systems are set out, for companies like these to operate in a rules-based environment. And if it is that we feel Sri Lankan firms cannot face competition, and it is for that reason alone we should not go for deeper economic engagement, then I’m afraid we have bigger things to worry about than a four-letter word starting with C.

Anushka Wijesinha is a development economist and a consultant to a host of governmental and non-governmental organizations in Sri Lanka.  He has previously worked at Institute for Policy Studies, The World Bank and the presidential commision on taxation.  His writings on economics are found on his blog -- The curionomist.  You can follow him on Twitter @anushwij