Prime Minister tells UK exiting EU will disrupt global economy, impact Sri Lanka’s export trade

Prime Minister Ranil Wickremesinghe says Sri Lanka is ‘very concerned’ about the probable impact of ‘Brexit’- withdrawal of the United Kingdom from the European Union - on the global economy, on Sri Lanka, and on the UK.

Writing to the UK’s iNews, Prime Minister Wickremesinghe said the decision the voters must make on the referendum on Thursday, 23 June, to decide whether Britain should leave or remain in the European Union is a ‘momentous one’.

Explaining the impact of Britain leaving the EU on the global economy, the Premier said today the trade is not confined to national boundaries and, as a result, we are all dependent on the global economy recovering from the financial crisis of 2008.

He said the global macro-economic stability is of vital importance to Sri Lanka.

“The success of our strategy to diversify our export earnings and improve our balance of trade depends on a stable global economy,” he said adding that therefore, “the future of the European single market, which accounts for more than 30 percent of Sri Lanka’s export trade is of critical concern to us as its disruption would have global consequences.”

“We in Sri Lanka - as well as many other Asian countries - cannot afford further financial turbulence and another global economic downturn. So we are very concerned about the probable impact of a British exit from the EU - on the global economy, on Sri Lanka, and on the UK.”

The EU is the world’s largest economy, with more than 20 percent of global GDP, the Prime Minister points out. It is also the world’s largest trading bloc, with 15% of the world’s trade in goods and services, and the biggest export market for more than 80 countries, including Sri Lanka.

“So the economic consequences of the disruption that could be caused by the UK pulling out of the EU would have an impact even on our part of the world,” the Sri Lankan Prime Minister emphasised.

He said the impact of Brexit on Sri Lanka would be greater than losing the EU’s GSP+ tariff concession.

“In Sri Lanka, we suffered the consequences of losing the GSP+, a preferential trade deal with the EU, in the late 2000s. Going by our experience, the adverse impact off a UK pull-out would be far greater.”

Explaining the difficulty in establishing trade deals with other countries, the Premier said Sri Lanka is negotiating an economic and technology agreement with India, and discussing trade deals with China, Singapore and the US as individual negotiations have become the only option for Sri Lanka since there is no single market for South Asia.

“So I am amazed at a country which seems inclined to throw away its secure present for an uncertain future. Exiting the European single market means standing in a queue while a country like Sri Lanka enters into agreements with the above-named countries,” he pointed out.

Noting that the UK is a country that built up and maintained economic success from the days of empires to the European single market, the Sri Lankan Premier said to leave the EU now would put that very position at risk.

“It would be, in cricket parlance, a hit wicket, and it is therefore not surprising that your allies and friends have expressed their anxieties and concerns,” he said.

“We wish the people of UK all strength to make the correct decision on 23 June,” Prime Minister Wickremesinghe said.