British Deputy High Commissioner Mark Gooding last week in an address to the National Chamber of Commerce seminar titled ‘Partners in Prosperity’ set out the UK’s plans to boost trade and investment between the UK and Sri Lanka. Here are excerpts from his speech:
I’m delighted to be here today at the National Chamber of Commerce of Sri Lanka to talk to you about how the UK and Sri Lanka can boost their trade and commercial ties.
The UK and Sri Lanka are natural partners in economic development, natural partners in commerce, and natural partners in prosperity.
Why? Because the close historical ties between the UK and Sri Lanka give us many shared perspectives, shared values and of course a shared language. These historical links have borne many other ties, including similarities in our legal and regulatory systems.
Over the years, the people of Sri Lanka have developed many personal and family ties with the people of the UK. And these in turn have created many business and commercial ties, as well as educational, political and cultural ties. I myself have experienced many of these links directly, not only at the High Commission but as a teacher at an international school in Colombo in the mid 1990s.
It is no surprise, therefore, that thriving business links between the UK and Sri Lanka exist already. Not many people realise just how broad these links are.
Let me give you some facts and figures.
Sri Lankan exports to the UK totalled US $1 billion in 2009, and imports from the UK were US $186 million. That made the UK Sri Lanka’s second largest trading partner.
UK companies provided US $300 million of foreign direct investment in Sri Lanka last year. That was over 10% of all Foreign Direct Investment in Sri Lanka, more than any other country apart from China.
In tourism, we expect well over 100,000 British nationals to visit Sri Lanka this year, representing the largest group of Western tourists to Sri Lanka and contributing to the success of the Sri Lankan tourist industry.
There are over 100 companies in Sri Lanka with a UK affiliation across a wide range of sectors like the Financial Services (HSBC, Standard Chartered, Aviva), Garment Sourcing (Marks & Spencer, Tesco, Triumph, Next), Pharmaceutical (GSK), Construction (Mabey Bridge, Scott Wilson).
Existing British Companies are expanding their investments in Sri Lanka. For example, Unilever, De La Rue, London Stock Exchange and Cairn energy who will begin drilling for oil off the coast of Mannar in 2011 with an initial investment of US $ 100 million.
Added to this, a number of UK-Sri Lanka business associations exist. In Sri Lanka, the Council for Business with Britain actively promotes and supports companies doing business with or affiliated with the UK. And in the UK, the Sri Lankan High Commission has also recently launched the UK-Sri Lanka Business Council in order to expand and develop business between British companies and their counter parts in Sri Lanka
So it is clear that the UK and Sri Lanka already enjoy extensive business partnerships across many sectors. What I would like to set out to you this afternoon is our vision for how we can build on these existing partnerships in the future, and how we work together to achieve prosperity in both our countries.
Today, the UK and Sri Lanka have an historic opportunity to build new business partnerships and strengthen our commercial ties.
In Sri Lanka, the end of nearly 30 years of civil war has created a unique opportunity for peace, for stability and for prosperity. Already, increasing numbers of UK companies are coming to Sri Lanka looking to create new partnerships in the fast growing business environment.
The UK welcomes this, and wants to support Sri Lanka’s efforts to capitalise on the unique opportunity. With annual GDP growth rates already of 7% or more in Sri Lanka, the potential for a sustained period of economic growth and investment in the future is clearly high.
For the UK, too, there is no time like the present. After a period of economic turbulence, the UK economy is fully back in business. The British economy is currently the sixth largest in the world. Economic growth of 1.2% has just been confirmed for the second quarter of this year.
The UK economy is expected to grow by 1.2% in 2010 as a whole, and by over 2% in 2011. This was the third quarter of growth in a row, and marks the return of growth after several months of downturn. Behind this headline growth, both the services sector and consumer spending are growing, and construction output grew at the fastest rate for nearly half a century.
Trade is also growing quickly. The second quarter of this year saw UK exports increasing by 2.3%. Imports rose by 2.4% a further increase on the 2.0% in quarter one.
So let there be no doubt that now is a good time to look to the UK as a potential destination for trade and investment.
As well as these signs of increasing economic activity, the new British Government has taken a number of decisive steps to reduce the UK’s budget deficit. Full details are due to be published when the Chancellor announces the results of the Comprehensive Spending Review on 20 October.
But even on the basis of the plans already set out by the Government, the IMF has recently endorsed the UK Government’s £128bn strategy to eliminate the deficit within five years, and agreed that it will ensure fiscal stability. The IMF has also estimated that in 2015 the UK will have the highest growth of all G7 countries.
In this context, the British Government has been clear that economic and commercial work is at the heart of its foreign policy. Foreign Secretary William Hague said in a keynote speech in Tokyo in July that “We will make economic objectives a central aspect of our international bilateral engagement alongside our other traditional objectives…We will work in a targeted and systematic fashion to secure Britain’s economic recovery, promote open markets and improved financial regulation and to open the way to greater access for British companies in new markets worldwide. We will champion Britain as a partner of choice for any country seeking to invest and do business in Europe. And we will use our diplomacy to help secure a strong, sustainable and open global economy that benefits all nations and helps create the basic conditions for prosperity for those who are now denied it.”
So what does that mean for the UK and Sri Lanka? It means that the British High Commission is committed to providing assistance to Sri Lankan companies wanting to do business in the UK and to UK companies wanting to do business in Sri Lanka.
Let me start with the assistance we provide for British companies looking to do business in Sri Lanka. The High Commission’s Trade and Investment team offers a number of services to British companies interested in the Sri Lanka market. These include providing market information reports on a sector by sector basis. They arrange business events and programmes for UK businesses in Sri Lanka. And they facilitate contacts between British businesses and their natural partners in Sri Lanka.
One further function of the High Commission is to put you, Sri Lankan businesses, in touch with UK companies with whom you are interested in setting up a partnership. So if you have a business opportunity and are looking for an international partner, do please let us know about it. We can then ensure information is shared with national and regional trade bodies in the UK.
In its commitment to supporting British businesses overseas, the British Government is also ready to put its money where its mouth is. The British Export Credit Guarantees Department has just announced an increase in export credits from £150 million to £ 200 million for British companies wanting to invest in Sri Lanka.
And as a major funder of the international financial institutions, we also use our role on the Boards of various key organisations to support conflict sensitive development projects in Sri Lanka, many of which address directly the physical effects of the war.
We are also committed to facilitating travel to the UK for Sri Lankan businesses with an efficient and straightforward visa application process. I’m aware that a common perception exists in Sri Lanka that it’s very difficult to get a UK visa.
It’s true that the UK, like many other countries, has entry clearance requirements. At the High Commission, we aim to make these requirements as clear as possible, and to ensure our visa process is as efficient as possible.
Let me give you some statistics to dispel some of the common myths. Last year, the British High Commission received and processed over 30,000 visa applications in Sri Lanka. Then, and since then, we have met our global targets for visa processing times. That means that the vast majority of non settlement visas have been processed within 15 working days. And the majority of visa applications we receive are in fact issued.
We are still working to make it easier and quicker for business travellers to visit the UK. We are doing this in two ways. First, for visa applicants who have travelled UK, US, Australia or Canada within the last five years, we now process your visa application in Colombo, not Chennai, and aim to do this within five working days.
And second, we are currently developing a new Business Express Programme for Sri Lankan businesses, under which businesses will be able to access a quicker and easier visa application process. We hope to be announcing the details of this soon.
In the meantime, let me repeat our standard advice, that if you’re planning to travel to the UK, please apply for your visa as early as possible, and do follow our online guidance closely so that you provide the correct information and documents.
The UK – The best location for business development
Leaving visas aside for now, the second major focus of the High Commission’s trade and investment work is to encourage Sri Lankan companies to look to the UK as the natural choice for a business location. Why would you want to choose the UK as a place to invest, set up a company, or do business?
The UK is a magnet for foreign investment. In 2009-10 UK attracted 1,619 new investments and in 2009 retained US $1,125 billion of FDI stock. Manufacturing attracts more FDI to the UK than to any other country in Europe. Globally the UK is second to only the US.
For centuries, of course, the UK has been a global centre for trade, renowned for its entrepreneurial spirit and free market approach. This ethos underpins the UK’s position as destination of choice for many investors around the world.
There are six features that make the UK the business and investment destination of choice.
First, the UK has one of the most open business environments in the world. For example, according to the World Bank, the UK is the easiest place in Europe to operate a business. It also has the least barriers to entrepreneurship in the World [OECD]. And there are over 2 million companies currently registered in the UK and another 330,000 register every year. That’s 120 new businesses every hour.
Second, the UK’s economy has a history of sustained growth. This is because it is built on and driven by innovation. The UK has particular strength in a number of sectors. It has long been an innovator in such areas as ICT, engineering and low carbon technology. The UK has the 2nd largest ICT sector in Europe, worth £120bn, annually. The UK is world renowned for high tech engineering and aerospace technology, as well as a global leader in low carbon technology. This tradition of innovation, and the development of new ideas, will ensure the UK continues to be a leading global trading nation.
Third, the UK is a global trading centre. According to the World Trade Organisation, in 2009, the UK is the 2nd largest exporter of commercial services in the world. And the 3rd largest importer. The UK is the 7th largest exporter of merchandise. And the 4th largest importer.
Fourth, the UK has one of the most stable and well-regulated, least corrupt business environments in the world. According to Transparency International, the UK is one of the most transparent countries in the world. It has a higher rating than France, Germany, the USA and Japan.
Fifth, the World Bank also says we have one of the most flexible labour markets in the world. 673 jobs are created every week in the UK and one in four jobs in the UK is linked to business overseas.
And finally, the UK is a gateway to the European market. As a member of the European Union, the UK provides access to the single biggest common market in the world. The EU economy is bigger even than the US economy.
All of this makes the UK an ideal place to invest and do business. Many Sri Lankan companies are already benefitting from collaboration with the UK. One recent example is the investment by the London Stock Exchange in Sri Lanka’s Millenium IT company, which shows how Sri Lankan expertise is set to play a key role in the continuing success of the UK Market.
What to do if you want to invest in the UK
The UK has long recognised the benefits of inward investment and has welcomed overseas-owned, high value companies looking to set up and do business in the UK. UKTI staff in the UK can help develop high value businesses by providing a fully integrated advisory service and delivering the latest business intelligence.
Specific services include:
- Information on regulatory factors
- Information on location options and business opportunities
- Sector information and introduction to key sector networks
- Support to build collaborative partnerships with UK businesses and centres of excellence
- Assisting overseas entrepreneurs like yourself to develop innovative UK business opportunities through a bespoke programme (Global Entrepreneurs Programme)
- Continued support to companies once they have established. Delivered by UK Trade & Investment Relationship Managers, alongside relationship managers in the UK regions and online.
If you want to develop a high quality, high value business in the UK, contact us at the BHC and we will put you in touch with colleagues in the UK
In conclusion, I hope I have given you a flavour of the UK’s commitment to supporting increased trade and investment between the UK and Sri Lanka. The UK and Sri Lanka are natural partners in business and in prosperity. So if you’re looking for new business partnerships or opportunities, the UK is the natural choice. At the High Commission, we’re keen to help you identify the opportunities, and partnerships, so we look forward to seeing you soon.