Tuesday Oct 08, 2024
Tuesday Oct 08, 2024
Friday, 12 July 2013 06:00 - - {{hitsCtrl.values.hits}}
Key interest is to facilitate proactive dialogue with the representing body, the Ministry of Investment Promotion, BOI, EU institutions and the European Parliament on EU investor needs and reduce constraints that currently impede progress.
The program has been designed in a manner which calls for monthly meetings of EU investors, once in three months with the EU Commission, EU members, BOI and Deputy Minister of Investment and Promotion, and biannually to meet with the Ministers. The initial meetings will start from September this year.
ECCSL Board Director Anurag Kak noted that the EU-Sri Lanka Business Council in Brussels instigated the dialogue in collaboration with ECCSL in November 2012 to open avenues for higher level of discussions between EU Member States representations, European investors and Sri Lankan businesses.“The investment environment of Sri Lanka was highlighted and guidelines on creating business linkages and joint partnerships were discussed, he said.
“In conjunction, the European Investment Bank and European Commission presented information on investments in Europe. Delegates from both sides shared key information and used the opportunity to enhance business relationships. This is precisely why we are here today,” Kak explained. “Investors such as Loadstar, Omega Line and others have contributed to putting Sri Lanka on the global map. We hope this dialogue will work towards achieving more success stories.”
He expressed that the two primary tools that needs to be improved to enhance EU-Sri Lanka relationships was promotion of investment as well as safeguarding and retaining foreign investment on the ground.
European Commission Head of Trade of the Delegation Roshan Lyman acknowledged that if investments were to be attracted in a systematic manner from a particular country or region, one needs to not only promote investment location in that particular country but should also get to know the investor country (or region) better.
What EU investors look for prior to investing in a country are its consistent policy framework, protection from expropriation, free availability of raw materials in the investment location or vicinity, proximity to key markets and privilege access to such markets, and, 
as the majority of EU countries are SMEs they look for countries that encourage smaller investments. “Although Sri Lanka is a recipient of considerable EU investments, I am certain the Government and the institutions are continuing to work to attract more investments from Europe.”
Focusing on what the EU is already doing with regards to trade agreements worldwide, Lyman asserted that the EU is the largest source and destination of FDI in the world today. It is a strong promoter of both inward and outward investments as it believes investments in to the EU will create jobs, optimise resource allocation, transfer technology and skills, increase competition and will boost trade; while its outward investments will help the competitiveness of European enterprises in the form of higher productivity.
In 2011 alone the EU attracted investments worth Euro 225 billion from the rest of the world and made outward investments of Euro 370 billion. US attracted approximately 20% of the EU’s outward investment. In Asia the most important destination for outward floor of EU FDIs were Singapore, Hong Kong and Japan.
The relative importance of China as a destination for EU FDI has grown steadily over the recent years and the outward FDIs stocks reach Euro 75 billion by end 2010. As for inward investments, the US accounted for 41% of the EU’s inward FDIs from the rest of the world.
“Since entering the Lisbon Treaty in 2009, investments became part of EUs common commercial policy,” Lyman said.
The Commission has been negotiating several free trade agreements in the recent past. It has already concluded trade agreements with South Korea, Singapore, Peru, Chile, Colombia, Mexico, South Africa, Moldova and Ukraine. Negotiations are currently ongoing with India, Vietnam, Thailand, Canada, Japan, Armenia, Georgia, Morocco, etc.
“Two important negotiations are expected to begin soon – one with China and the US,” he asserted. “With China the EU expects to sign an investor agreement and which will provide EU firms with competitive labour resources from China, and full access to the huge and expanding labour market. Whereas Chinese businesses are looking at technology and are looking to consolidate their distribution network and infrastructures across EU through this agreement.”
With the US, EU is looking at a transatlantic trade and investment partnership agreement. Negotiations under this will aim at removing trade barriers such as tariffs, unnecessary regulations, restrictions on investments etc on a wide range of economic sectors. “Through these EU expects to make it easier for companies to invest in each other’s economies by harmonising and understanding safety standards.”
Lyman assured: “This is bound to have spill over effects in the global economy. Increased trade between these two would increase demand for raw materials, components, etc.” Similarly harmonising EU and US technical standards as foreseen with the agreement could well make the basis of global standards.
Investment Promotion Deputy Minister Faiszer Mustapha commented on the importance of EU as it is the largest trading bloc for the country. “Why do we need this investor dialogue?” he questioned. “At various stages dialogue helps mutual understanding. Certain Government policies and directions need clarity which could be achieved through dialogue. This mechanism I believe would further strengthen the relationship we already enjoy.”
There is a need to work collectively, Mustapha said. “There are issues and grievances in any economy. However, there are also success stories. Some of the European companies are the best success stories of the strength of this economy.” He assured his Ministry’s support during further dialogues.
Sri Lanka provides opportunity for European business in various spheres from public procurement, green industries, investment promotion and service sector (education, tourism, financial sector). Such opportunities could be utilised through effective tools available for EU businesses in other regions such as SME internationalisation and tools of bilateral agreements.
Pix by Sameera Wijesinghe
