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By Charumini de Silva
Sri Lanka’s efforts to liberalise its economy and encourage a solid basis to establish close business-to-business relations, are crucial to countries looking to expand investment opportunities, believes Ambassador of Denmark to India and Sri Lanka Peter Taksøe-Jensen.
Speaking at the inauguration of the ‘Danish Days in Sri Lanka 2016’ themed ‘Water, Energy and Infrastructure’ hosted by the Embassy of Denmark along with the Confederation of Danish Industry, Ambassador Taksøe-Jensen said that Denmark wishes to support the positive development process that has been initiated by the Government.
He said it was important to keep in mind that democratic reforms have a positive impact on the inflow of investments by large foreign investors, who require democratic stability as well as political and economic predictability.
Noting that the Government of Sri Lanka is working hard to ensure the democratic and economic development of the country to enable business and citizens to enjoy the real economic potential that Sri Lanka has, he said it: “A new chapter of bilateral cooperation is now taking off in which Denmark’s honorary consul in Colombo; along with the embassy in New Delhi intend to expand the commercial ties between our countries which today do not reflect their full potential.”
The Ambassador said the 14 Danish companies participating are world leaders in each of their lines of business and offer solutions to a range of challenges in Sri Lanka. We are confident that this delegation will strengthen the two countries commercial ties and provide tangible results to the benefit of both our countries.
“Danish companies are ready to step in and help Sri Lanka expand and develop its ports, renewable energy, consultancy services on city planning and water technology. We look forward to meeting Sri Lankan public and private stakeholders with interest in exploring opportunities for partnerships with the Danish companies,” he added.
The ambassador described the Danish economy as small, open and highly dependent on foreign trade. “Trade and investments are the driving forces for the Danish business sector and good external sector trade relations are therefore crucial for maintaining the Danish economy.”
The two countries have a long history of cooperation as Danish development aid has previously been used across several sectors, including port construction projects in the fishing industry. The Ambassodor noted that the match between Danish competencies and Sri Lanka’s positive path of development calls for more cooperation across these sectors.
“This even offers a unique opportunity to establish mutually beneficial cooperation in the areas of energy, water and infrastructure which are sectors with high demand for new technologies, know-how and foreign partner companies,” he said.
International Trade State Minister Sujeewa Senasinghe said Sri Lanka is committed to adopt a policy agenda that strengthens competitiveness of the country’s private sector.
“We are taking concrete measures to increase ease of doing business and investor confidence. We currently review our laws and regulations with a view to create simple rules-based business environment including those related to land ownership, tariffs and para-tariffs, automation of regulators to reduce time and charges. Together with these reforms, it is expected that Sri Lanka become the most attractive, secure and competitive investment destination in the region,” he added.
Emphasising that the Government’s development strategy is focused on foreign direct investments (FDIs) and exports in place of debt; he identified IT and enabled services, manufacturing, tourism, agriculture, food processing and energy as potential sectors for cooperation on the basis of comparative and competitive advantages.
The Minister insisted the need to promote the diversification of the export sector through backward integration, high technology and value addition. In addition, Senasinghe outlined emerging sub-sectors that could be important for Denmark investment will include manufacturing of electrical capacitors, electric conductors and parts of machinery, poultry, dairy industry, agricultural produce, post-harvest packaging, canning, tourism infrastructure and fisheries.
Senasinghe said tha Sri Lanka has signed a double tax treaty with Denmark, which provides reduced tax rates on dividends interest and royalties. Hence, exchange of business delegations in mutually beneficial areas would enhance economic and trade potentials and encourage business chambers and promotional agencies to have closer interactions.
It was pointed out that bilateral investment agreements that exist between Sri Lanka and Denmark provide for protection against nationalisation, prompt and adequate compensation if required, free remittance of earnings, capital and business fees, settlement of disputes under the international Convention for the Settlement of Investment Disputes (ICSID).
Foreign Affairs Ministry Additional Secretary – Economic Affairs and Trade Grace Asirwatham said Sri Lanka’s economic policies have been regulated to create sustainable growth by unlocking Sri Lanka’s long untapped economic potential through FDI, trade and tourism.
“Private-public partnership is the order of the day. The private sector will be the engine of growth, while exports and FDIs will be key pillars of the new model for increasing growth, employment and incomes,” she noted.
Asirwatham pointed out that as a trade dependent country, the rules based international order has served Sri Lanka well and are committed to its preservation and development.
Increasing investment including in human capital, realigning public spending, enhancing the role of the private sector, increasing exports and productivity and ensuring inclusive growth while achieving sustainable development were highlighted as key challenges at present.
Thereby she suggested that creating a more business friendly environment will help fulfil Sri Lanka’s enormous potential both in terms of its location and people. Trade facilitation was acknowledged as an important factor in improving trade productivity and advancing trade performance.
Highlighting that Sri Lanka has preferential access to large markets in the region, she asserted lifting the EU fisheries export ban this year and the much expected restoration of GSP+ next year will give the country required preferential access to the massive EU market. She said compared to the significant potential that the two countries have, the statistics are not very impressive. Bilateral trade between Sri Lanka and Denmark stands in the range of $70 - $90 m, where Danish investments in Sri Lanka are less than $2 m.
“We need to work hard to realise the full potential. The European Chamber of Commerce and Sri Lanka–Nordic Business Council should facilitate high-level business-to-business engagement between Sri Lanka and Denmark. The relevant agencies related to trade promotion, investment facilitation and the connected Ministries including the Ministry of Foreign Affairs will compliment such a process,” she added.
Pix by Lasantha Kumara
