Cracking down corruption crucial to attracting investment: EU

Thursday, 24 January 2019 03:01 - - {{hitsCtrl.values.hits}}

Anti-corruption is important to get FDI, make maximum use of GSP+
Stability, transparency and incentives would attract more investors
European investments could help Govt. tackle debt
Diversification of SME’s is a must to attract more EU investors

By Ruwandi Gamage

Putting in place anti-corruption policies would assist in attracting investors to Sri Lanka and also encourage maximum use of GSP+, said the European Union Ambassador to Sri Lanka and Maldives Tung-Lai Margue on Tuesday.

Sri Lanka and Maldives European Union Ambassador Tung-Lai Margue - Pic by Lasantha Kumara

Speaking at the Breakfast Meeting hosted by the European Chamber of Commerce of Sri Lanka (ECCSL), he said he believed Sri Lanka has room for improvement.

“There’s still too much corruption in the country, and there’s room for improvement if the authorities put in-place strong anti-corruption policies to increase respect for the market,” he said.

The Ambassador also stated he believes lack of stability to be perceived as a risk by any investor, and that for Sri Lanka to be an attractive market, the Government can take certain measures in terms of GSP+, Taxes, tariffs and bureaucracy.

“Lack of stability is always perceived as a danger for any investor, and what happened in October wasn’t good for the country. We hope stability will prevail again, and the climate for investment will become better if the Government maybe creates tax incentives, boosts the construction of economic zones, allows longer visa stays for businessmen, and lessens the burden of bureaucracy to speed up processes,” stated Margue.

Margue further said that the lack of transparency in the tender process is another important element that the Government can work on. He commented that it is his belief that European investments can help tackle the debt situation in Sri Lanka, and that it is the Government that must take initiative to make the market more secure.

According to Margue, helping SMEs expand focus to diversify their market potential and giving due technical support will be strategic approaches to make better use of the GSP+. He stated that Sri Lanka should also focus on EU-friendly products, rather than traditional products like garments, rubber, and tea.

“The Government needs to help exporters to diversify and target priority products. The main aim of this would be to prioritise products that EU countries are accepting, like eco-friendly products. And it would also be beneficial if SMEs are given help to get rid of the technical obstacles when entering into the market, which is something the EU is also helping to achieve,” he added.

It is also his opinion that high tariffs are killing the competition with regards to European investments, and that it is also not allowing companies to become more innovative.

“It’s an illusion to believe that you’re protected by high tariffs and eroding your advantage to the extent where the country is no longer competitive, then you’re left with your own market,” he said.