Elephants aside, Sri Lanka well-placed to become trading hub
With preferential access to a market of over three billion people in the future, Sri Lanka is well-positioned geographically for foreign investors to piggy-back on, according to deputy minister of Foreign Affairs Dr. Harsha De Silva addressing the Sri Lanka-Austria Economic Forum this week.
Geography seems to be Dr. De Silva’s forte, even though he might have had a slight slip of the tongue when he called for the government of “Australia’ to help Sri Lanka’s final application process for GSP + in the European Parliament.
But with the help of a history lesson, he urged the 15 Austrian companies – from hydropower and renewable energy to healthcare and water treatment – at the forum to raise their investments in this country from the zero levels last year. “If we go back to the 12th Century and read the history of Sri Lanka, you will find out that Sri Lanka thrived because of a network to the world. The king of the time Parakramabahu, the Great was a great trader and he created a hub for trade. The King of Burma upset him because he increased the tax on elephants by 300 per cent.
Parakramabahu sent his navy to fight the Burmese on trade and the story goes he was successful,” related Dr. De Silva. Sri Lanka has taken great pains to rebuild its network – with the United States and Europe – since the new government came into power according to Dr. De Silva. He reminded the audience that “winning the peace” was as important as “winning the war” was. “The reason why I’m bringing up Parakramabahu is because Sri Lanka’s global position, its GPS position, hasn’t changed much since the 12th Century.
We remain the most logical place to operate in the 21st Century. We are equidistant from South-East Asia and Europe. If you look at sail times from Sri Lanka to the main ports of India, it is so much lesser than the times from Singapore to those same ports. “The people of this island are friendly and educated. Only 35 per cent of women are in the labour force. It can be a plus or a minus but if you are positioning us as a knowledge-based, highly-competitive market economy then what you are looking for is talent at a higher level.
Women are the more educated and qualified than men in this country. There is a huge pool of women who can be employed. “Sri Lanka is an attractive location, not only because of its geographical location but also other attractions like the ease of doing business with three billion people.” Sri Lanka has FTAs (Free Trade Agreements) with India and Pakistan and is on the verge of signing up similar deals with China, Japan and Singapore. “Next to Singapore we will be the only other country with equal preferential access to India and China at the same time.
ASEAN has this but that is a complicated one,” Dr. De Silva pointed out. “We did this in the 12th Century. Every time this country prospered it was because we leveraged our ability to do trade,” he added. Minister of Finance Ravi Karunanayake also urged the Austrian delegation, including New Delhi-based ambassador Bernhard Wrabetz to place trust in Sri Lanka. He warned “Sri Lanka is not the only girl on the beach and we must sell ourselves and ensure that it is easy to do business in this island.”
Last year there was bilateral trade of 120 million Euros between Austria and Sri Lanka with the balance in favour of Sri Lanka mainly due to its apparel, toys, rubber and tea exports. However there was zero investment from Austrian companies in Sri Lanka. “We hope that will change soon. Sri Lanka is on the move in the right direction. Austrian investors coming here can also look at the Indian market and the Pakistan market,” reminded Mr. Karunanayake. “Our taxation is some of the lowest in the world. Investment approval takes only 50 days.”
The government’s three-pronged drive at the forum included deputy minister of State Enterprise Development Eran Wickremaratne who added: “Once the global economy bounces back we will be well-positioned for take-off.” The forum was organised by the European Chamber of Commerce in Sri Lanka. With geography and history on Sri Lanka’s side that was the message the Austrians will take home with them.