Tuesday Apr 30, 2024
Tuesday Apr 30, 2024
Monday, 22 July 2019 00:00 - - {{hitsCtrl.values.hits}}
Strategic Development and International Trade Minister Malik Samarawickrama last week gave a checklist for the private sector if they truly care about national interest.
The suggestions were shared by the Minister at the launch of Sri Lanka-United Kingdom Bilateral Trade and Investment Research Report initiated by the Council for Business with Britain at Ceylon Chamber of Commerce. UK High Commissioner James Dauris and members of the Council, Ceylon Chamber and the Economic Intelligence Unit who prepared the report were also present. Following are excerpts.
Let me start by congratulating both the CBB and the Economic Intelligence Unit of the Chamber for putting together a comprehensive report that will serve as an excellent reference point for business people in the UK and Sri Lanka in forging new trade and investment ties.
These sorts of briefing reports are a very useful tool to identify current trends as well as prepare for the future, by exploring what additional areas we need to work on to increase our bilateral trade and investment.
I am encouraged to note that the bilateral relationship between the UK and Sri Lanka has grown over the last two decades, with average bilateral trade volumes in the last 10 years topping $ 1.4 billion. In this period the trade balance has been in favour of Sri Lanka, and it is led by the exports of textiles, which in 2018 comprised over three-fourths of our exports to the UK. We have also gained immensely from the import of high quality British machinery, equipment, automobiles, and food products. The report notes that there are further opportunities in FMCG, pharmaceutical and technology services.
In terms of future prospects, the report has highlighted textiles as the product category with the most potential for more trade. This is something we have to build on, and strengthen the linkages between British retailers and brands, and Sri Lankan manufacturers.
High Commissioner, as we have discussed on several occasions, we are seeking some preferential trade arrangement between our two countries following Britain’s exit from the EU, ideally the continuation of GSP Plus equivalent benefits, and leading towards an FTA in the future. We both know that Sri Lanka can offer ethically manufactured, environmentally responsible, high quality products for the British market, and our preferential access needs to continue regardless of Britain’s membership of the EU.
In this context, I need to emphasise the importance of Sri Lanka’s openness to trade, without which, investors from the UK or anywhere wouldn’t find us an attractive destination to do business in. For too long we have been frogs in a well, while the rest of the Asian region overtakes us. Trade liberalisation is a must if we are to progress and prosper. We are too small a domestic economy to do without it.
This is an area that our country needs the trade Chambers to be more active about. And active not just in telling us why we shouldn’t do it, but rather telling us that we must do it faster and how we can do it better. You should all be concerned that Sri Lanka is at risk of being left behind.
Did you know that there are now 170 free trade agreements in the Asia Pacific region? The free trade agreements cover over 40 countries in Asia alone, and a population of approximately 4.4 billion. The next FTA to come – the Regional Comprehensive Economic Partnership or RCEP – will be the world’s largest economic bloc, with 16 countries, encompassing about one third of global GDP and almost half the world’s population.
Other countries in our region have a number of FTAs already – Singapore with 25, China with 19, Japan – 17, Korea – 17, Malaysia – 17, Thailand – 14, India – 13, Indonesia – 13, and Vietnam – 12. And these countries have more FTAs under negotiation. Just India, Thailand, Singapore, Malaysia and Vietnam alone have 39 more FTAs coming up. This is a remarkable number.
Although we are late to the party, our Government has taken steps to integrate with these economies more than any other previous Government. With China, we have negotiations for an FTA as well as a Joint Economic Commission, with Singapore we have a modern and comprehensive FTA, with Korea and Japan we have Joint Economic Commissions to further trade and investment, and with India we are at an advanced stage of negotiations on the new FTA.
For the first time in history Sri Lanka now has an FTA with an ASEAN country – Singapore – who is also the recent ASEAN chair. We have begun talks on an FTA with Thailand, which is the current ASEAN chair. We have never had better prospects for integration with this dynamic East Asian bloc than we have today.
There is no question that we have to do more to integrate with the world. We cannot be afraid, and we have to be bold. Our Government has taken many steps down this journey.
Now the Chambers need to strongly champion the cause of openness, not just mildly believe in it. On the topic of Chambers’ advocacy, I want to address another issue that was triggered by an exchange between the CCC and the Government in the press recently. No doubt the private sector should be vocal about issues of national interest. Especially when in the past the private sector was largely silenced on issues of national interest and weren’t given the freedom to voice their views, under a regime that provided no space for democratic debate and would punish those who were vocal in their opposition. If you were a journalist you would disappear or pay with your life, and if you were a business leader you would lose deals and pay with your profits.
While I acknowledge that Chambers must continue to advocate on national issues and hold Government to account, I would urge you to be consistent in your advocacy, and not selective.
If you care about national interest, then you should also care about trade liberalisation. Currently we have a protectionist trade regime that benefits a few hundred firms at the expense of millions of consumers and households. We haven’t seen the Chamber being very vocal about that and advocating publicly to change this dynamic. National interest is also about ensuring prosperity for the many and not the few. National interest is also about opening ourselves to the world so that we don’t get left behind and wither away into irrelevance.
If you care about national interest, you should care about the new Monetary Law Act that is at risk of being scuttled. I haven’t heard the Chambers say anything about it. The new Monetary Law Act brings greater independence to the Central Bank, reduces the chance for fiscal dominance of monetary policy, and helps build a more stable interest rate regime that will support businesses. An independent Central Bank, better inflation management, these are also in the national interest. Stand up for it. Help to galvanise private sector support.
If you care about national interest, then you would also care about transparency in Government decision making. Unlike the previous regime where there were sweetheart deals struck for a handful of favoured businesses, our Government has built a culture of transparency. We passed the Right to Information Act, which is now processing hundreds of information requests daily. You can ask me or the institutions under my Ministry anything about any project and we can tell you credibly and openly about it.
I’m sure you haven’t forgotten the era when none of this was possible. At least – not possible, without the threat of retribution!
If you care about national interest then you would also care about the plight of the businesses of our fellow Muslim citizens and come out strongly condemning the actions and rhetoric of the racists. Today, hundreds of Muslim businesses are being targeted and they are facing bankruptcy but I haven’t seen Chambers – who represent the business community – aggressively combat this. This is a commercial issue, which needs apex bodies representing the commercial sector, doing something about it. It’s not just about individual companies trying to fight it – Chambers must throw their full weight behind it and combat it at all levels.
More broadly, Chambers must play a key role in combating extremist views being propagated in society – no matter what segments of religion and race they’re being expressed from or against. Extremist views are driving harsh wedges in our society today and risk jeopardising a hard-won peace. The Ceylon Chamber has taken an admirable step of getting its members to take a ‘Pledge for Unity’, and I hope this will be built upon to tackle the growing curse of extremism.
The reason I mention all this is because we recognise and acknowledge the important role that Chambers like this one play in the Sri Lankan governance ecosystem and the public policy sphere. You have a valuable and strong voice. You can use it to advocate for important things – economic policy reforms, trade opening, and yes, national interest issues. It is important to be consistent, and not selective, in the issues you advocate on.
In the matters of national interest, I would urge you to start with the things closer to your domain and push those agendas forward and upward – like trade opening over protectionism, competition over favouritism, consumer welfare over oligopoly profits, and extremism that’s pitting one business community over another. This Government has always been open to hearing and debating the private sector. We have always been open to your ideas and open to your criticism. Some may say we have been too open, and we should just ‘do dodo’ without consulting so much. We are not wired that way. And the way the world is moving – fast, complex, disruptive – we cannot afford to be wired that way. We may not get it right 100% of the time, but at least you can be assured that we are genuine in our intent. And we ask the same of the Chambers.
I once again congratulate the CBB and the Economic Intelligence Unit for this excellent report and the initiative taken to grow trade and investment ties between the UK and Sri Lanka. I will certainly be taking a closer look at the insights in this report, and instructing the officers under our Ministry – at the EDB and BOI – to work with you to act on the recommendations contained in this.
