Trade liberalisation the key to export growth, more foreign investments
Though Sri Lanka is keen to pursue economic growth and the efforts are commendable, more needs to be done to boost exports and attract foreign investment for which trade liberalisation is required.
This was stated by Tung-Lai Margue, Ambassador and Head of Delegation of the European Union to Sri Lanka and to the Maldives when he addressed the launch of EU-Sri Lanka Trade-related Assistance; increasing SMEs Trade Competitiveness in Regional and EU Markets in Colombo this week.
The EU has launched a EUR 8 million (Rs. 1.3 billion) project to help Sri Lanka increase its trade competitiveness in regional and EU markets. The project will be implemented by the International Trade Centre (ITC) and the United Nations Industrial Development Organisation (UNIDO) in collaboration with the Sri Lankan Department of Commerce.
He said that trade is the vehicle for economic balance for everyone while noting that it is a key factor in stimulating economic development of countries. The project has been jointly designed with Sri Lanka and brings together policymakers, state agencies, business leaders, chambers of commerce and apex organizations with the aim of improving competitiveness gaps expanding international trade.
Statistics show that since the 1990s Sri Lanka’s export market hasn’t changed much while its global market share has fallen. Only 5 per cent of existing local companies are involved in exports, he said adding that Sri Lanka is a small island competing with many global players. “As a lower middle income country and aspiring to become a higher middle income country there should be competitive advantages that Sri Lanka could offer,” he said.
Looking at a regional perspective, he said cheap labour is available in Bangladesh, Cambodia and Laos and these countries too are competing in the garment industry. To achieve upper middle income bracket the country requires a private sector-led rebalance of economic growth which is able to offer higher value for goods and services for domestic and global markets.
The project will help Sri Lanka integrate WTO policies and regulatory reforms to make the most of the potential opportunities from the EU, GSP + scheme and greater regional integration and also address compliance standards and efficiencies in cross border procedures. Specific attention will be given to enhancing value chains in the spice, food and IT Business Process Outsourcing sectors.