The Brexit dividend for Sri Lanka

When Britain joined the EU some 40 years ago, it had to turn its back on its old Commonwealth friends, including Sri Lanka. It was a shameful act, but they were obligated to do that because of the collective force and trajectory of the EU which did not have this heritage. Many Commonwealth countries had real economic problems as a result.

One and a half years ago Sri Lanka found itself in an analogous position when the regime changed under “Yahapalanaya”. Essentially it won back its democratic heritage. That is exactly what Britain has done. Taken back its democracy from unelected bureaucrats in Brussels. So, there is much in common!

The EU effectively dictates what Britain can buy from Sri Lanka, amongst which are apparel, fish amongst others, and it is even constrained on letting Sri Lankan people come to live and work in Britain. The same applies to all the new and old commonwealth countries.

Because of EU restrictions, work visas are constrained by the vast number of people that they have to let in from the EU. As an independent Britain they can now decide how best they should move forward, which could well be on a point scheme like that of Australia’s immigration policy. This is just one example of opportunities in a changed dynamic.

There has been a lot of talk during the Brexit campaign about the fact that the EU still doesn’t have trade agreements with China, India and USA, because 27 other countries have to agree and they never can. Iceland and Switzerland both already have bi-lateral trade agreements with all 3 of those major trading countries.

This then is the opportunity for Sri Lanka, to commence a sustained initiative to significantly improve its trading links with Britain. We should quickly move off the blocks in doing so. There is a Brexit dividend for all Commonwealth countries and Sri Lanka should get straight in there to get its share of the dividend.

Apart from the economic dividend, there will shortly be an additional £10 billion of net contributions to the EU which the UK government could now redirect to help its Commonwealth partners.

The opportunity Sri Lanka has, is to come out and congratulate Britain on the choice it has made and lobby to become a ‘friend of an independent Britain’ and do so with the Commonwealth as well.

There are opportunities to negotiate for special trade status with Britain for food, manufactured products, services and tourism. And be one of the first to agree on an open doors trade agreement.

Aggressively market Sri Lanka as a source for BPO, and as a manufacturing base as this is the time that companies in Britain will begin to look for greater efficiencies as they go through the stresses of the EU separation.

This needs to be a coordinated initiative much like the Turkish Government’s Turquality program (where Brand Finance has much experience in), which is a state-funded branding program for making global brands out of Turkish products with the objective of “10 global brands in 10 years”. In this instance, it would be a more focused and targeted initiative around taking businesses and brands to Britain. The objective should be to strengthen the “Made in Sri Lanka” image and country reputation; by propelling homegrown companies from the domestic market to Britain, thereby increasing exports.

So, the real opportunity for Sri Lanka is to take a proactive leadership position now, and not to stall. The need of the hour is to believe and invest in a new and future partnership with Britain through a more aggressive marketing presence at key events, showcasing what the country has to offer to what is essentially a newly independent country. Doing so will require marketing investment across key identified sectors which the private sector and the Government should proactively identify.

It’s a new dawn for Britain, and Sri Lanka should consider it as a new start in its relationship with bountiful gains. It’s an opportunity that we need to believe in, to reap the potential dividends.

Established in 1996, Brand Finance is an independent consultancy focused on strategy, management and valuation of brands and branded businesses. Headquarter in UK, Brand Finance has a global network across 25 countries, including USA, India, Canada, Spain, Brazil, Australia, Netherlands, Singapore and Sri Lanka.