Kudos from Key

• New Zealand PM says planned reforms encouraging and crucial
• Believes SL has chance to adapt and attract investment if “nimble” with changes
• Invites Wickremesinghe and Sirisena for visit, investment in agriculture and IT discussed  
• Says encouraging imports and reducing protectionism crucial to improve SL trade
• Calls for stamping out corruption and improvement in infrastructure

By Uditha Jayasinghe 

Sri Lanka’s efforts to liberalise its economy and stamp out corruption need to be “nimble” to bring crucial investment opportunities from countries looking to expand in the South Asian region, believes New Zealand Prime Minister John Key.  

In the midst of a tour of Sri Lanka the New Zealand premier told Daily FT in an exclusive interview the developments over the past few years have been encouraging and open up space for greater economic and political engagement. 

“We have raised issues with Sri Lanka and we will wait to see where they go. We have invited the president and prime minister to New Zealand and we are hoping they will both be able to come at some point but I think they are conscious of the reforms they need to undertake,’ he said. 

New Zealand Prime Minister John Key - Pic by Lasantha Kumara

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Key insisted encouraging imports and reducing protectionism is crucial to improve Sri Lanka’s trade with the world and pointed out that if the Government can implement reforms in a competent and timely manner the island could find itself a preferred investment destination, especially for companies looking to expand across the Palk Strait to India. New Zealand, which is keen to widen its “patchwork” of trade destinations beyond China and Australia, could find Sri Lanka an attractive link to the Sub Continent.        

“The first thing is the economic reforms the Government is undertaking, which to us seem the right ones, so we look at India and we see a lot of really good initiatives from Prime Minister Modi but question is can he actually pass them through parliament? The system is very different from China though  they have also undertaken significant reform and Sri Lanka is nimble enough, I think, to be able to adapt and change and grow. If we look around the region we certainly think Sri Lanka will be one of the countries that will really do well.” 

“We look at tariff structures that our companies pay at the moment, those tariffs are too high and what that does is stop important component parts being exported to Sri Lanka. One of the points made to me by the Prime Minister was that they need to reduce tariffs on imports. So we can actually support each other,” he added. 

Outside of agriculture, which both parties have already pledged to cooperate on, Key earmarked manufacturing industries in technology as a possible sector of mutual interest for both countries.    

The New Zealand premier, who is in Sri Lanka with a 10-member business delegation, remarked they see “huge potential,” for increased business with Colombo though bilateral trade is currently about $350 million dollars. However, he stressed Sri Lanka would have to move forward in stamping out corruption and improving infrastructure to attract investment.       

“One of the issues Sri Lanka is dealing with is corruption and that is always a really important issue because corruption makes it very difficult for foreign investors to do business in that country. They don’t understand the system well and if they are a listed public company then that causes issues for them so it is very debilitating. The second thing is infrastructure. If you want to grow then you need strong infrastructure, so everything from hotels, stable electricity supplies, broadband, education and Free Trade Agreements (FTA) are all crucial.”