Sri Lanka’s private sector should move swiftly to tap ASEAN investment and export opportunities, International Trade and Development Strategies Minister Malik Samarawickrama said yesterday, calling on companies to move out of their comfort zones and have faith the Government would protect their best interests.
Addressing the Daily FT- University of Colombo MBA Alumni Association-organised and HSBC-supported CEOs Forum, under the topic ‘ASEAN: Sri Lanka’s Next Big Opportunity’, Minister Samarawickrama acknowledged that many opportunities existed for trade between Sri Lanka and Association of Southeast Asian Nations (ASEAN), but that local companies would have to find new approaches to serve a complex market.
“We can all agree ASEAN is certainly a big opportunity for Sri Lanka and we must latch onto it, strong and fast. In fact I would argue this event’s title ‘ASEAN, Sri Lanka’s Next Big Opportunity’ should change. It is Sri Lanka’s opportunity right now and we cannot get any later to joint this party,” he said.
The Minister recalled that during the previous Government, Sri Lanka had a lopsided foreign policy that limited engagement with diverse partners. However, since this administration came into power, attention has been paid to engaging with diverse countries, including those in Southeast Asia.
“Some relationships were strained and others had simply slipped away. ASEAN was one such relationship. We had simply not done enough. It was important for our country to pursue new partnerships whilst strengthening traditional ties, and this is what we have managed to do in the last three years. We have been balanced in our economic diplomacy.
“It is easy to disregard how important this achievement is. It is not something the Sri Lankan private sector can see or touch. It is not visible like infrastructure, and you can’t put it on a billboard. But it has deep implications for our economic interests. While we continue to work on our relations with top export markets, we are now placing a strong focus on nurturing new partnerships across Asia. We recognise Sri Lanka is located in a region that has firmly become a centre of gravity in the global economy, and in that, ASEAN is the most valuable sub-region.”
Minister Samarawickrama pointed out that the ASEAN economy – which is projected to grow at about 5.5% annually – is linked to the proposed Transatlantic Trade and Investment Partnership (TTIP) and the Regional Comprehensive Economic Partnership (RCEP), and already has bilateral deals with Japan, Korea, China, India, Australia and New Zealand. “It makes one wonder what Sri Lanka has been doing all this time. But I believe it is not too late for us, and we already have several ingredients in place to step up Sri Lanka’s engagement with ASEAN.
“Sri Lanka must see ASEAN as a FDI source and a market for exports. Southeast Asian companies have begun investing regionally and would find Sri Lanka an excellent springboard to other nearby regions. Already, we are aware of several Southeast Asian investors who see Sri Lanka as an important link between Asia, Africa and Europe. And even though ASEAN and India are already linked, Sri Lanka offers a more conducive point for exports to India and Pakistan.”
The Sri Lanka-Singapore Free Trade Agreement (FTA) is key in this new outlook, which the Minister noted as “the strongest step ever taken to bring Sri Lanka closer to ASEAN.” He argued the recently-inked FTA was a signal to ASEAN that Sri Lanka is interested in doing business and serious about reform. He highlighted single windows, fast tracked investor approval, new investment zones and efforts to push Sri Lanka up the World Bank Ease of Doing Business rankings.
Addressing the sceptics, the Minister said “Despite what you may hear, we kept our national interest front and centre when negotiating the FTA. We negotiated cleverly, and we believe it is a very good agreement that will strengthen our economic prospects. The Singaporean FTA is a strong step to closer integration with ASEAN.” The Minister acknowledged there would be different opinions on the issue of liberalisation, but insisted that Sri Lanka would need to take this journey if it wants good jobs and sustained growth.
“While we move ahead with reforms, we invite our private sector to move out of its comfort zone and look for investors from ASEAN and space for our goods and services. We have already begun preliminary discussions with another ASEAN country, Thailand, on a potential FTA. The formal talks will be launched when the Thai Prime Minister visits Sri Lanka next month. This too will be an important step, as Thailand will become the ASEAN chair next year.”
The Government also has a long term goal of upgrading Sri Lanka’s current dialog partner status with ASEAN to Observer Status, followed by the possibility of discussing an FTA with ASEAN as well as linking to RCEP.
The Ministry is also preparing new investment zones that would be open for the private sector to operate in partnership with the Board of Investment (BOI). The Government is currently negotiating with a Thai investor to set up a joint venture zone in Middeniya, with the agreement to be signed during the Thai Prime Minister’s visit in July.
“For many years, our focus has been on Western markets. Catering to ASEAN consumers will require new approaches, new products and finding new business partners. ASEAN is not a monolithic market, and each country will require different market strategies. We stand ready to support you. Through the EDB, we have brought market access for precisely this purpose. We need to develop new products for markets like ASEAN, new standard certification, if you need B2B partners we can support you. Our Government is committed to making the necessary reforms to make our economy more competitive, to ensure that Sri Lanka is an attractive place to do business and link our companies with the world.”