Wednesday Dec 11, 2024
Wednesday Dec 11, 2024
Friday, 15 November 2013 00:45 - - {{hitsCtrl.values.hits}}
Challenges in global trade
However, in spite of Stiglitz’s observation, there are corresponding challenges, Zarook said.
The lack of complete access to product markets caused by both trade barriers and hefty subsidies by developed countries on commodities of interest to agro producers, limited access to financial resources (and for some countries high conditionalities attached to concessional resources), constraints of acquiring technologies in terms of resources both human and financial, and inadequate infrastructure were mentioned as key constraints.
“The era we live in also brings about a closer degree of financial and economic integration between countries where shocks and financial terrors h
ave become more global in nature. A crisis in one country can easily replicate itself in true domino fashion in other countries, not necessarily in the neighbourhood alone.”
Achieving the right balance and pace of adjustment as well as building powerful domestic institutions are now challenges for policy makers.
Zarook added: “Building a powerful set of domestic institutions that can meet the rising demands and the race to remain competitive brings its own challenges. Commonwealth cooperation through which countries look beyond their borders to tap and leverage other strengths could be an effective approach in this endeavour.”
He also noted the importance of “letting the economics dictate politics, and not politics dictate economics”.
How to be attractive in your bikini
The recent experience in all emerging nations is that they cannot grow at the pace they hope to, if not for FDI.
In the Asian experience, to become the motor of global growth, a sunshine story in a dismal atmosphere, the secret is FDI. “Countries cannot balance budgets if not for FDI and foreign input. The infusion of capital is therefore important,” Finance and Planning Deputy Minister Dr. Sarath Amunugama said.
Speaking on how Sri Lanka is to attract FDI and what elements position us better than competitors, Amunugama said: “We are not the only girl on the beach. There is a lot of competition. The key is to make sure we are attractive in our own bikinis.”
For this, strategic location, stable government, efficient public services, talented and adaptive people and a country that is open to investment are key. Sri Lanka offers all these and more. “Sri Lanka’s story is a good story, a story that must be taken to the world. We have a winning story, a winning team,” he said.
Amunugama also noted that President Rajapaksa was set to sign a US$ 2 billion FDI initial agreement which falls under the preview of Economic Development Minister Basil Rajapaksa last evening, which is noteworthy as the usual FDIs coming in are US$ 1 billion or less.
Requisites for trade
De La Rue UK CEO Tim Cobbold sharing his experience in working with the Commonwealth over the years noted that it is a community that offers excellent opportunities and conditions for business and trade.
Listing out some of the requisites for trade and business, Cobbold mentioned investment, innovation, trade and common legal practices. “The Commonwealth offers an excellent environment for investment,” he said.
With nine operations within the community, which including Sri Lanka, Cobbold noted that the system in place in Sri Lanka can be used as a model to further successful businesses within the Commonwealth.
Coming in as a joint venture investment, De La Rue offers 300 long term skilled jobs with 80% of the production exported. Having inje
cted 25 million pounds recently to upgrade the system, the Lankan model has been a highly successful one, he said. “Malta, Kenya and Sri Lanka have been excellent,” Cobbold added. “It is critical to work in partnerships with mutual benefits for all parties.”
Commonwealth’s innovative capabilities have been underestimated so far, he said, noting that this must be improved upon.
It was also estimated that there will be US$ 5 trillion in trade within the Commonwealth by 2015, with significant room to grow. “De La Rue’s business with the Commonwealth is resoundingly positive,” Cobbold expressed.
UK’s story
In order for the UK to get out of the mess it was in and to be the leader in the global race, UK Prime Minister David Cameron determined that trade had to be at the very heart of progress, UK Prime Minister’s Trade Envoy Lord Marland of Odstock said.
Sharing their story, Marland reflected: “We identified that 60% of British businesses only export when someone comes and knocking on their door. We also had no money.” The country had also forgotten its trading relationships. “I think we were guilty of failing to remember the importance of the Commonwealth,” he acknowledged. They needed to refresh and rebuild. “Business starts well when there are good government connections; and under that canopy, business will prosper.”
How does one rebuild relationships with limited resources? “We had to first put in a tax regime that will support our business,” he said. The UK will reduce corporate tax which will be the lowest in the G20 by April next year at 21%. They also had to encourage universities and the education system that deploys skills reliant on the financial services was not going to be the cornerstone of the economy. “We had to deregulate. We had to create certainty for British businesses.”
Business will only prosper when there are several fundamental characteristics , Marland asserted, listing the following – rule of law that underpins every contract a business makes, transparency in trade, security so that businesses feel secure, efficient delivery of contracts, and competitive workforce.
“If we can standardise these practices around the world, we have a very clear market in which business can operate and governments can understand and recognise the rules of engagement. However, governments can lead a horse to water but they can’t make it drink. It is up to you as businesses in this country and the rest of the world to take the opportunities presented to get out there and transact,” Marland said.
