SAARC Finance Ministers focus on trade liberalisation

Monday, 2 September 2013 00:05 - - {{hitsCtrl.values.hits}}

SL ready to expand avoidance of double taxation: PB
Region needs to attract more FDI: Amunugama

By Uditha Jayasinghe Trade liberalisation in South Asia should be preceded by tax and Customs reforms to allow free flow of goods and services for economic growth, officials said on Friday. Detailing discussions that took place when South Asia Association for Regional Cooperation (SAARC) Finance Ministers met to discuss ways to promote intra-regional trade in Colombo, Finance Ministry Secretary Dr. P.B. Jayasundera identified several bottle necks. He pointed out that SAARC trade was nowhere near the amounts of similar organisations such as the Association of Southeast Asian Nations (ASEAN).

Dr. Jayasundera stressed the importance of South Asian countries resolving institutional shortcomings such as double taxation, universal standards and dispute resolution. “Sri Lanka has already hosted a Customs workshop and we stand ready to sign more agreements on avoidance of double taxation. Dispute resolution is currently in chaos and as the head of the SAARC Finance Committee we want to set a plan in place for the next six years,” he said. He added that Sri Lanka considers improving trade in South Asia as a priority. When SAARC Finance Ministers met with Sri Lankan President Mahinda Rajapaksa on Friday morning, he had stressed the importance of working together in international fora and dealing with mutual issues in one voice. They had also discussed investment promotion, economic integration and Customs cooperation. Finance Deputy Minister Dr. Sarath Amunugama also called on SAARC countries to focus on related areas such as Foreign Direct Investment (FDI). South Asia remains one of the lowest regions attracting global FDI, recording only 2.7% and 0.7% of FDI outflows in 2012. In fact last year FDI inflows to South Asia decreased by 24% to US$ 34 billion while outflows also declined by a steep 29% to US$ 9 billion. “Sri Lanka is involved in the Bangladesh apparel industry so there is some exchange but it is nowhere near the level to make an impact. Concessionary tariffs need to be extended and we need to discuss how a population of 1.6 billion can be used to attract FDI from the rest of the world.” He added that progress on economic integration in South Asia was “not satisfactory”. SAARC Secretary General Ahmed Saleem also encouraged fast tracking institutional cooperation saying that there is nothing that SAARC cannot achieve if it puts its mind to it. He also called for members to be more open to trade with India pointing out “if India benefits then all of us benefit”.