Trade agreements crucial for small economies

Thursday, 28 July 2016 00:00 - - {{hitsCtrl.values.hits}}

A top Singaporean official recently said that Sri Lanka should not miss out on the trade agreements it is seeking with regional countries, pointing out that it is crucial for small economies to plug into the trans-boundary value chain.

“Looking at Sri Lanka from a Singaporean perspective, the Economic and Technology Cooperative Agreement (ETCA) with India and the Free Trade Agreement (FTA) with China are opportunities not to be let slip, nor should the proposed FTAs with Singapore and Japan,” Ambassador-at-Large of the Ministry of Foreign Affairs Singapore Bilahara Kausikan delivering the keynote address at the CFA Sri Lanka Capital Market Awards held in Colombo on Tuesday (26).

Speaking on the topic ‘Evolving Geopolitics of the Indian Ocean Region – How should Sri Lanka position itself to exploit political and economic opportunities?’ Kausikan said the inter-linking of the geo-political system can be advantageous if three factors such as internal cohesion, psychological poise and external balance are in place.

“Economic robustness will attract multiple sources of investment which creates relevance which comes with internal cohesion, while psychological poise enables countries to resist pressure in making forced choices. External balance ultimately is linked to both these because if you achieve these two, a country can achieve an omni-directional state of equilibrium instigating a balance with all major powers,” he emphasised.

Kausikan drew from his experience as a former Permanent Secretary to the Ministry of Foreign Affairs and Permanent Representative to the United Nations. “What matters is our place in the trans-boundary value chain,” he observed.

While pointing out that Sri Lanka’s geographical location is potentially profound and significant, he stated that geographical location was just one element and not necessarily the most important factor as geography was contingent and politically constructed.

“Coming from Singapore, I reject the argument that geography is destiny. Although geography offers opportunity, it does not guarantee success. Success requires sound domestic policy. What guarantees success, especially for small states, is relevance, which must be built on strong economic foundations,” Kausikan stressed.