Sri Lanka must exploit strategic location for foreign investment

By Cassandra Mascarenhas

Sri Lanka is ripe for investment and should exploit its strategic location to attract more foreign investment, while not losing focus on its traditional markets were the general views expressed at the Expo 2012 Symposium on Trade, Investment and Tourism.

Held yesterday, the symposium featured a line-up of representatives of many sectors, both local and international, shared their views on investing in Sri Lanka and highlighted some of the benefits and problems that need to be overcome

Delivering the keynote address, Senior Minister of International Monetary Cooperation Dr. Sarath Amunugama stressed on three vital elements that investors need to look at when evaluating Sri Lanka’s position in terms of comparative and competitive advantages for investment; namely the country’s strategic location, its people and labour and thirdly, the institutions and infrastructure.

“Sri Lanka must exploit its strategic location. Our imports are higher than exports and we need to balance that. For that we need many more industries here and we need to rapidly expand our exports.  As a country that is dramatically reducing its indebtedness, we need to export,” he observed. His emphasis on the three vital elements was also shared by many of the other speakers who followed him.  

Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal, while outlining a macroeconomic perspective of the Sri Lankan economy, described several areas in which Sri Lanka is currently experiencing massive transformations, noting that it creates an environment conducive for investment.

“We have a vision and a very clear goal towards development in our nation. We have created opportunities in our nation and opened it out from within as well as from the outside and we encourage you to come and work with our private sector and the Government – the time in Sri Lanka is now and we would like to see you be a part of that journey,” he said encouragingly.

Going back to the causes of the conflict in Sri Lanka, United States Trade Representative for South and Central Asia Michael Delaney suggested that one of the major causes was the inability of the economy to deliver sufficient growth employment and prosperity.

“I am saying that the lacklustre economy greatly aggravated social divisions to the point that they became unmanageable. Grow the economy, provide good jobs and create the prospect of a better tomorrow. Complete reconciliation will take some time and will involve a lot of effort – this task would be greatly facilitated if the economy grows rapidly. That is why this Expo and what it signifies is important,” Delaney stated.

He also pointed out that the US was already the country’s largest customer and provides livelihoods for many in Sri Lanka, adding that the US was proud of the role it plays in boosting Sri Lanka’s economy and would like to play a greater part in the economy.

Representing the apparel sector, Clazedonia SpA Italy Chairman Dr. Sandro Veronesi praised the Sri Lankan labour force highly, crediting it for the company’s growth within the country and encouraged people to invest in Sri Lanka.

He also suggested that the Government look at attaining the GSP+ concession once again, pointing out that other countries that compete in the apparel field including Bangladesh still enjoy the benefits of the concession, which gives them a competitive edge.

ITC Geneva Deputy Executive Director Jean-Marie Paugam highlighted the growing importance of the BRICS group, noting that it has been accelerating on many fronts over the past couple of years and encouraged Sri Lanka to exploit the benefits of being located in a ‘dynamic’ neighbourhood.

Paugam added that on a domestic front, the country needs to further public-private dialogue with some of the domestic procedures, drawing upon Customs as an example and on a foreign front, emphasised the need for priority to be given to Sri Lanka’s biggest traditional markets – the US and the EU and now India as well.

Speaking about sustainability-driven trade challenges, UNIDO Representative for China, DPRK, Mongolia and ROK Edward Clarence-Smith stated that if Sri Lanka wished to maintain its exports in the future, in particular in sectors like textile and apparel, tea and rubber manufactures, Sri Lankan exporters must follow the green trends for their products and adapt their products to meet any new standards that come up.

“Focusing on the objective of maintaining if not improving access of exporters from Sri Lanka, green strategies should be pursued not just for exported goods and services but greening products and industrial processes is also good for Sri Lanka’s own domestic development and I hope the Government will pursue these policies to ensure that the country’s future development is green and sustainable,” he said.

Both the London Stock Exchange Group General Manager Mark Harries and HSBC Holdings Plc. Global Head of Business Services Ian Ogilvie praised Sri Lanka’s skilled workforce and supportive Government framework and commented on the ease of doing business in the country. At the same time, they both stressed on the need for improved infrastructure in terms of bandwidth, satellite, electricity, etc. and noted that the competition for local talent, while it was a sign of a growing economy, was becoming a problem.

“The war for talent, which is a problem that is not unique to Sri Lanka, will pose both a challenge and opportunity to us. As markets develop in Sri Lanka, it will be also a stimulus for young people to develop their skills to make the most of the opportunities available. Getting the balance between demand and supply is going to be one of the challenges,” noted Ogilvie.

One of the final speakers of the session, UNWTO Regional Head Xu Jing commended the Government for its national development strategy to use tourism as an effective tool for the wide distribution of economic and social benefits and the growth of direct and indirect employment.

“In consistency with global trends, emerging destinations have made considerable advancements in infrastructure, environmental protection and planning amongst many others. A good example of this is Sri Lanka, which as an emerging economy has shown considerable expansion in its economy and has witnessed unprecedented growth in terms of international tourist arrivals,” he stated.

“By 2030 South Asia will become the fastest growing sub-region of tourism in the world. There is no doubt that the future brings great opportunities for tourism to take centre stage in the political and economic arenas. To make this possible, the entire society, both public and private, need to include tourism in their national policy making decisions. Many countries have achieved this and my question is, why not Sri Lanka?”