‘Sri Lanka has potential to be modern Indo-Pacific region’: US

US Ambassador to Sri Lanka and Maldives Atul Keshap, Minister of Industry and Commerce Rishad Bathiudeen, Deputy Foreign Minister Dr. Harsha de Silva and AMCHAM Sri Lanka President Asanga Ranasinghe

With its location, people and new democracy, Sri Lanka packs great trade and investment potential – but achieving this vision is no cakewalk, according to the US – and Sri Lanka on its part, views the US not only as the largest buyer of its exports but even as the largest indirect employer of Lankan apparel workforce.

“US Secretary of State John Kerry said Sri Lanka has the potential to be the fulcrum of a modern and dynamic Indo-Pacific region with a market much larger than the 22 million population of Sri Lanka. Achieving this vision is not going to be very easy,” said US Ambassador to Sri Lanka and Maldives Atul Keshap last week.

US Ambassador Keshap was addressing the inaugural event of the US Trade Show 2015 at Galadari Hotel Colombo. A joint effort of the US Embassy in Colombo and the American Chamber of Commerce Sri Lanka (AmCham), the Trade Show began in 2012 and this year sees the fourth in the series.

“There is a new and tremendous opportunity for business ties between Sri Lanka and US. I believe that our two countries can do a tremendous amount together to enhance our economic relationship and expand our bilateral trade. That is because the people of Sri Lanka have made it clear their intent to leave aside the politics of the past to build a promising unified future,” said Keshap.

“The Government of Sri Lanka has responded with plans to adopt policies that will make it easier for business to operate in and trade with Sri Lanka – not only for American businesses but businesses all around the world. Sri Lanka enjoys tremendous advantages that American and other companies around the world can take opportunity of. It sits astride to some of the busiest shipping lanes on the entire planet. Containerised shipping, tankers craters from all around the world, passing by Galle Fort on the way between the Straits of Malacca and the Straits of Homus – I see the shipping coming to the Port of Colombo from right outside my office window. 

“It is clear that Sri Lanka is on the global map, the 18th biggest port in the world is right here in Colombo and it’s one of the busiest ports for the US government in terms of helping to ensure safe containerised security for the most essential elements of trade around the world. Sri Lanka is in perfect geographic positioning. It is so close to the markets of South Asia, markets of Middle East, and markets of South East Asia; it has free trade agreements with some countries of the region making it an excellent location for assembling, logistics, and other commercial endeavours. 

“And Sri Lanka is a tremendous place to live and an excellent regional hub expats would like to live. I have an important message for Sri Lanka. American companies are some of the most dependable business partners you will find anywhere producing the highest quality products and services in the world with higher standards of ethics, CSR, world class innovation, state of the art manufacturing techniques, all done with a sense of responsibility towards the environments and workers that make American firms the best possible partners you can possibly have. 

“As per the figures in 2014 Lanka imported $ 350 million products and services from US. We love to see this number grow and love to see Sri Lanka engaging more exports to US. US Secretary of State John Kerry said Sri Lanka has the potential to be the fulcrum of a modern and dynamic Indo-Pacific region with a market much larger than the 22 million population of Sri Lanka. Achieving this vision is not going to be very easy. Representatives of US firms regularly told me they would like to see more economic policy consistency, a more fiscally stable government, and sustained enforcement of transparency policy in Sri Lanka. 

“US capital and business tend to flow to countries that succeed in providing this policy stability. With the billions of dollars they are looking to invest, they are looking for safe, stable, transparent policy environment and regulatory environments where they feel they can have long term commitments and they can do good business for themselves and their local partners. “Going forward, the government of President Maithripala Sirisena and Prime Minister Wickremesinghe, and the members of business community here can and will work together to make the tough reforms necessary to help set Sri Lanka on the path towards long term sustainable prosperity and help us to grow a strong record of bilateral trade. There is new opportunity in this country. The Sri Lankan voters voted twice to usher in a new way of doing business, for a Sri Lanka that is peaceful, reconciled and prosperous with democracy and human right for every single one of its citizens. Today the US has a strong partnership with Colombo Government that shares our commitment to boost bilateral trade and investment,” he added.

Minister of Industry and Commerce Rishad Bathiudeen, delivering his address as the Chief Guest said: “This joint trade show comes in a background of the US emerging as the largest single buyer of Sri Lankan exports. It is with satisfaction that I also view the 13% increase in our year on year bilateral trade with US which totalled $ 3.2 billion in 2014. According to the Department of Commerce under me today the US takes in 25% of Sri Lanka’s annual national export volume of which the main item is our world class apparels, 73% of all our exports to US, followed by some rubber products. 

“It is clear therefore that the US is also the largest indirect employer of apparel sector workforce of Sri Lanka. Our new unity government led by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe shall continue the open market economic policies to ensure competitive environment for global investors. As part of the new economic reforms, creation of new investment promotion zones where international investors including investors from the US can invest is a key effort to enhance our global market presence and competitiveness. 

Sri Lanka is ranked 73 in new Global Competitiveness Index and our government has also ambitious plans to improve our global competitiveness. Another reason that US investors should consider Sri Lanka as an investment destination is that the many opportunities provided through the Indo-Sri Lanka Free Trade Agreement and Pakistan-Sri Lanka Free Trade Agreement. Both these agreements allow more than 8,000 product lines made in Sri Lanka to be exported to these two markets at zero duty.  

“Today I invite the keen US manufacturers and investors aiming to move into South Asia to partner with Sri Lanka and make use of export opportunities to India and Pakistan’s 1.3 billion-strong market. US investors’ investments in Sri Lanka are protected with a constitutional guarantee. Therefore there is no risk in recovering your investments when you invest with us. We believe that it is time that US investors take bigger initiatives in partnering with Sri Lanka and today I extend our invitation to them to do so.”  

According to the Department of Commerce of Sri Lanka, bilateral trade with US increased by 13% in 2014. US is the topmost buyer of Sri Lanka’s exports followed by UK and India. Sri Lanka’s top five exports to US – among more than 40 products exported in 2014 – were apparel (almost 73%), rubber tyres, industrial gloves, gems and electronic products.