Govt. committed to reconciliation and balanced development of all regions: Malik

Following are excerpts from the address by Development Strategies and International Trade Minister Malik Samarawickrama at the Invest in East 2016 Investor Forum held last week. The Chief Guest at the event was Prime Minister Ranil Wickremesinghe whilst the Eastern Province Chief Minister Naseer Ahamed, Eastern Province Governor Austin Fernando and Central Bank Governor Arjuna Mahendran

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At the outset, I would like to welcome all participants, particularly those from overseas. I must also thank Chief Minister Naseer Ahamed and BOI Chairman UpulJayasuriya and DG Duminda Ariyasinghe as well as their respective teams for putting together an excellent program to showcase the considerable economic potential of the Eastern Province. 

The overall theme of this event ‘Invest in East 2016: Rising East/Dawning Opportunities’ is very pertinent indeed. There are very promising commercial opportunities in agribusiness, aquaculture, livestock, fisheries, infrastructure and tourism. These will be elaborated upon in a number of presentations during the course of the day. You will also be hearing from the heads of the Board of Investment and Export Development Board on what their respective institutions can offer in terms of facilitating investment and exports. The CEO of one of our major banks will be speaking on the availability of financing. 

The title for today’s proceedings is ‘Creating a Conducive Environment for Investment and Employment Creation in Eastern Sri Lanka’. I propose to set the stage by giving a brief overview of our Government’s on-going efforts to promote a sustained development process that transforms the economy for the benefit of all Sri Lankans, including the Eastern Province. 

"The agreements with China, India and Pakistan will give us preferential access to a market of almost three billion people. One could argue that this is our ‘Unique Selling Point’ "

Private sector development

Our Government is attaching the highest priority to rapid transformation of the Sri Lankan economy to create one million livelihoods and increase the incomes of our people. 

Sri Lanka has considerable potential as a location for investment, as a hub for trade and as an attractive destination for tourism. 

We are determined to take advantage of this by creating the enabling environment for a business-friendly development model. We are also focusing on empowering our people through upgrading our education, training and skills development to create a human resource base which supports a competitive and rapidly modernising economy. 

Our vision involves the private sector being the locomotive for growth and employment creation. Exports and FDI will be key pillars of the new model for increasing growth, employment and incomes. 

We are attaching high priority to improving the business climate. Investment policies, the ease of doing business, trade policy and trade facilitation are all receiving close attention as we seek to promote trade and investment more aggressively. 

A number of one-stop shops are being established to speed up processes and procedures. Laws and regulations, as well as tariffs and para-tariffs are being reviewed to reduce transaction costs and address anti-export biases in the policy framework we inherited. 

Going forward, we will also focus on strengthening the macroeconomic fundamentals, particularly budgetary outcomes.  

Creating a more business friendly environment will help to fulfil Sri Lanka’s enormous potential both in terms of its location and its people.

Deepening FTAs and forging new FTAs

Sri Lanka offers an extremely strategic location and an improving investment climate. It is placed on the major East-West shipping lines, equidistant from Europe and the Far East. There is also easy access to the Middle Eastern and rising African markets. 

Above all, Sri Lanka is located a mere 20 miles from India, which by common consent is going to be the fastest growing large economy in the world. 

Improving infrastructure in both countries is reducing transaction costs and thereby increasing the advantages of proximity. PM Modi’s ‘Make in India’ strategy will create opportunities for linking into new and expanding value chains in domestic as well as multinational companies operating in India. In order to take advantage of these changes in the overall landscape, which have improved the prospects for capitalising on our proximity to India, we are planning to deepen and widen bilateral relations through the Indo-Lanka Economic and Technology Co-operation Agreement. Our intention is to sign the Agreement by mid-2016. 

We are also in the process of deepening our FTA with Pakistan. 

With preferential access to both the Indian and Pakistani markets, Sri Lanka can act as a bridge for investors from both countries to penetrate each other’s markets. Indian investors, who wish to have preferential access to Central Asia can also locate in Sri Lanka and have access to those markets through Pakistan, which has a regional cooperation agreement with those countries. 

We are also negotiating a Free Trade Agreement with China. 

The agreements with China, India and Pakistan will give us preferential access to a market of almost three billion people. One could argue that this is our ‘Unique Selling Point’. 

We are also exploring a possibility of signing FTAs with other countries. In addition, we are assessing the merits of seeking to join the Trans Pacific Partnership (TPP). 

High priority is also being attached to lifting the EU Fisheries Ban and the restoration of GSP+. We are making encouraging progress on these fronts. 

The overall environment for promoting a more diversified and complex export structure is also being boosted by building on our good basic education through emphasis on strengthening higher education and the eco system for research and development. 

Inclusive growth

Our Government is very conscious that we need development, which is inclusive and regionally balanced for it to be sustainable and touch the lives of all our people. In this connection, we are empowering our people through up-skilling; up grading the competitiveness of SMEs; and increasing the productivity of agriculture. This will serve to promote shared prosperity. 

Our new land policies will open up opportunities for small farmers and commercial agriculture. Prospects are favourable for fruit and vegetable cultivation as well as dairy development to meet the rising needs of the rapidly growing tourism sector and for export to the Middle Eastern and Indian markets. 

Turning to other specific business opportunities, the Western Region Megapolis Project (WRMP) will generate massive investment opportunities for foreign private investment – both FDI and PPPs. Most of this investment will be private. There will be enormous opportunities for infrastructure development; housing and real estate building; financial and ICT enabled services; logistics; and high-tech manufacturing. 

The WRMP will be supplemented by a regionally balanced urban upliftment program to cater to the accelerated urbanisation, which will be an inevitable consequence of a rapidly modernising economy. This will be centred on five second-tier cities around the country. 

Regional development

We also have plans for 45 new Industrial Parks around the country, which will be developed and managed by the private sector. 

In the Eastern Province, a Master Plan is being developed for Trincomalee. It will include an economic zone; a tourist area and development around one of the great natural harbours of the world. Plans are already on the way to build two power plants and an economic zone. 

In addition, developments around the Hambantota Port and Mattala Airport also provide opportunities for investment in light and heavy engineering; logistics and airline maintenance, repair and overhaul. 

Last but not least Sri Lanka has enormous potential as a tourism destination. It has the advantage of a very attractive asset base in the form of the diversity of the product and the compactness of the country. Investment opportunities in this sector are considerable. 

Other areas, which have significant potential include high value added apparel, value added and blended tea, rubber gloves, rubber tyres, ICT-BPM, shipping and logistics and minerals, particularly, silica and quartz.

Potential for investments

Let me conclude by reiterating the enormous potential for private investment, both domestic and foreign, in the Eastern Province. You will hear much more about the opportunities available during the course of the day. The Province offers land, labour and some of the best beaches in the country. We encourage you to provide the capital, technology, markets and know-how to realise the potential of the Province and uplift the lives of its people. 

The Government of President Sirisena and Prime Minister Wickremesinghe is committed to reconciliation and balanced development of all regions of the country. Empowering people with skills and uplifting them through economic opportunities will reinforce harmony and good relations among all our communities. This event is an important element on this journey.