PM launches fresh Brexit backup plan

Prime Minister Ranil Wickremesinghe elaborates his plans for Sri Lanka’s economic future – Pic by Pradeep Pathirana

As the world reels from Brexit, Prime Minister Ranil Wickremesinghe yesterday outlined long-term plans to forge stronger ties with Asia to counter the potential fallout from Britain leaving the European Union, including fast-tracking negotiations with India on the Economic Technology Cooperation Agreement (ETCA) and implementing four Free Trade Agreements (FTAs) with key regional economies. 

Speaking at a ceremony in Galle as part of the United National Party’s (UNP) three million membership drive, Wickremesinghe insisted that Sri Lanka should form a strategy to protect itself from a potential Brexit fallout. Stressing on the need to “form a plan” and do it fast, the Prime Minister warned Sri Lanka’s foreign reserves could also be hit as 10% is held in British currency. 

Development Strategies and International Trade Minister Malik Samarawickrama will head to New Delhi next week to hold discussions on the proposed ETCA agreement, Wickremesinghe confirmed. 

“As much as 40% of our exports are to the European Union (EU) and this combination of countries is the largest economy in the world. If Europe stumbles into recession as a result of Britain leaving the EU, then it could hit our apparel exports and cost the jobs of people in rural areas,” he told the gathering. 

Government plans to regain GSP+ as soon as possible will continue, but Wickremesinghe confirmed his administration would also begin discussions with the UK on a separate FTA to protect Sri Lankan exports, though specifics of such a plan are yet to be ironed out. 

A report on the possible effects of Brexit has already been handed over to the Prime Minister by the Central Bank. Wickremesinghe has also appointed a fresh committee comprising leading professionals including Senior Advisor to the Prime Minister CharithaRatwatta, National Policy Ministry Advisor R. Paskaralingam, Economists Dr. IndrajitCoomaraswamy, Dr. SamanKelegama, SirimalAbeyratne, Nishan de Mel and Anushka Wijesinha, and JB Securities CEO MurtazaJafferjee. Central Bank Governor Arjuna Mahendran is also a member. 

“The committee will formulate a report on how Sri Lanka can deepen ties with Asia. As a small country we have to see how best we can leverage our advantages to improve trade. As a small country, FTAs with China, India, Japan and Korea are crucial to growth. We must consider such a strategy as part of our foreign policy,” he said. 

Once the committee hands in its report, the Prime Minister pledged further stakeholder engagement with the private sector, academics and other experts as well as presenting the report to President Maithripala Sirisena for his views. The report will also be presented to Cabinet for discussion, Wickremesinghe noted. 

“Even when Sri Lanka is facing such a dangerous situation, the previous Government had not drawn up plans to face these challenges. We, as a progressive party that cares for the wellbeing and development of our people, are attempting to meet these needs. I call on all citizens to join this endeavour and work towards the benefit of the country, so that we can all move forward towards a prosperous future.”