Government concentrating on developing infrastructure: Ambassador Ariyasinha

The Government is presently concentrating on infrastructure development, such as building schools, roads, bridges, irrigation systems and reinforcement of electrical grids and telecommunication systems, which are the essential needs of the people living in those areas, Ambassador to Belgium, Luxembourg and the EU Ravinatha Ariyasinha said.

In an interview with Diplomatic World, Ambassador Ariyasinha said many private sector entrepreneurs have also started investing in the former conflict affected areas in the north and east. “There is an added advantage coming to Sri Lanka, because companies manufacturing in Sri Lanka can enter markets in the Indian sub-continent, using Sri Lanka’s existing Free Trade Agreements with India and Pakistan,” he said.

The Ambassador further said: “By recently re-listing the LTTE as a terrorist organisation, EU member countries have also shown sensitivity to Sri Lanka’s concerns that despite being militarily defeated, remnants of LTTE cadre and its front organisations operating in Europe continue to pose a threat to Sri Lanka, as they do to their hosts.”

Following is the full text of the interview:

Q: Can you give us an overview of the actual situation in Sri Lanka since the defeat of the Tamil Tigers and the end of terrorism in mid-2009?

A: Having decisively defeated a separatist terrorist organisation which for 30 long years held the country at gun point, we have resettled 90% of the over 300,000 displaced from the conflict and are rehabilitating 12,000 ex-combatants, of which over 6,000, including all child soldiers, have already been reintegrated with their families. We have facilitated restoration of houses and livelihoods to most of those resettled, while ensuring education to all, including those undergoing rehabilitation.

The Government has appointed a Lessons Learnt and Reconciliation Commission (LLRC) to ensure restorative justice and reconciliation, and is in discussion with all political parties from the north and the east in an effort to resolve any outstanding political issues. The economy has picked up and the people have normalcy restored in their lives. Those going to work or school in the morning in any part of Sri Lanka, can be sure they will be able to get back home safely. Two years ago, we could not take that for granted.

Q: In the north and east of the country, a lot of infrastructure was destroyed during the conflict. What effort has gone into developing these areas?

A: No sooner the conflict came to an end, we commenced demining activities and we have cleared more than 75% of the mine-contaminated areas. The Government of President Mahinda Rajapaksa is presently concentrating on infrastructure development, such as building schools, roads, bridges, irrigation systems and reinforcement of electrical grids and telecommunication systems, which are the essential needs of the people living in those areas.

Many private sector entrepreneurs have also started investing in the former conflict affected areas in the north and east. I am happy to note that due to these measures, from being negligible previously, the contribution to GDP from the Eastern Province and the Northern Province has grown considerably.

Q: How do you explain the progress in the economic/financial sectors in Sri Lanka since the conflict ended?

A: Following the restoration of peace, Sri Lanka has entered a new era of development. The Government has simplified the tax system and implemented reforms particularly aimed at attracting foreign investment. In 2010, the economy recorded an impressive growth of 8.5%, stock prices are up nearly 250% and our stock market has become the best performing market in Asia. The exchange rates remained largely stable and inflation has been at single digit level.

Major infrastructure projects such as harbours, airports, highways, hotel complexes and power generation are laying the foundation to transform the country into an economic hub concentrating on trade, finance, travel and knowledge based industries. These developments have been recognised by entrepreneurs and investors worldwide, the Hong Kong based Shangri-La hotel chain being the latest to join, to build a seven star luxury hotel complex in Colombo, on a property which previously housed the Army Headquarters.

Q: You have responsibility for Belgium, Luxemburg and the EU. What is the main focus of these relationships at present?

A: Our relations are multifaceted. Having overcoming terrorism and dealt with the immediate post-conflict issues, as Sri Lanka moves into a phase of rapid development, the focus is to garner support in a region which for many decades had come to view Sri Lanka through the prism of ‘the conflict’. Belgium, Luxemburg and the EU have supported Sri Lanka in this period of transition, and are moving from focusing on programmes of a humanitarian nature to broader development oriented cooperation.

By recently re-listing the LTTE as a terrorist organisation, EU member countries have also shown sensitivity to Sri Lanka’s concerns, that despite being militarily defeated, remnants LTTE cadres and its front organisations operating in Europe continue to pose a threat to Sri Lanka, as they do to their hosts. These provide more opportunities to engage with Sri Lanka and in turn it would enhance the bilateral and multilateral cooperation between us.

Q: Let’s focus on Belgium. How would you characterise the relationship?

A: We have a very long relationship with Belgium. History records that in 1864 the Duke of Brabant (later to be King Leopaul II in 1865) was invited to inaugurate the first train in Sri Lanka (then Ceylon). The engine of that train was subsequently named ‘Leopaul’. Since then there have been many points of contacts between the two countries over time.

More recently, Sri Lankans are appreciative that Belgium was one of the first countries which came forward to help in a big way during the 2004 tsunami disaster, by sending the Belgium Army to help clear the debris in the south of the island. Her Royal Highness Astrid in her capacity as the then President of the Belgium Red Cross also visited areas affected by tsunami to assess the local needs. Relations with Belgium are pursued both bilaterally, as well as in the context of its membership in the EU.

In addition we cooperate on a host of issues in multilateral forums such as the UN. In recent years cooperation has also extended to field of counter terrorism, in order to ensure that Belgium soil is not used by those hostile to Sri Lanka.

Belgium has also been one of the ‘early birds’ in seizing on the new economic opportunities opening up in Sri Lanka since the ending of the conflict. The high point in this process was the November 2010 visit to Sri Lanka by a Belgium business delegation led by the Belgium Ambassador to Sri Lanka based in New Delhi, comprising over 50 persons from 40 companies, with interest in a wide range of products and services.

The Ceylon Chamber of Commerce has noted that it was by farther largest business delegation to visit Sri Lanka from the West, since the restoration of peace. The companies that participated appreciate the competitive strength of Sri Lanka – its high environmental and labour standards, superior quality of products, reliability and conducive business environment. A reflection of this enthusiasm is seen in the transformation of the Belgolux-Sri Lanka Business Council (BLSLBC) into a legal entity in Belgium earlier this year.

Q: How important is Belgium as a trading partner to Sri Lanka?

A: Belgium represents Sri Lanka’s fourth largest market in the European Union. Overall trade with Belgium has grown by around 29% between 2005 and 2010, while Sri Lanka’s exports have increased by 50% in US$ terms during the same period. Sri Lanka continues to enjoy a favourable balance of trade.

The major products that Sri Lanka exports to Belgium are cut and polished diamonds, apparel and clothing, solid and pneumatic rubber, tyres, and rubber products, semi-precious stones, fish products, tea, coconut products, tobacco products, bicycles and horticultural products including coconut products. Sri Lanka also offers IT services to Belgium companies.

Sri Lanka’s imports from Belgium include raw diamonds, malt extracts, medicines, vaccines, pharmaceutical products, paper and paperboard products. Over the years while a major share of the two way trade has centred on diamonds, in recent time we have sought to diversified our explore basket and also to encourage use of Belgium as a base for Sri Lankan companies to expand into the rest of Europe.

We are seeking to promote Ceylon Tea, which has huge untapped potential. For instance, only 5% of the population of the Belgium consumes tea. But out of that, the market share of Sri Lankan tea is only 4%. We have also identified potential for products such as activated carbon, garden decor items, organic products, herbal products, rubber products such as doormats, and furniture, which can be additionally marketed in Belgium.

Similarly, the growing tourism industry in Sri Lanka has also open new opportunities for food and beverage manufactures and exporters, a sector in which Belgium has been particularly strong. Therefore we will be seeing more of the renowned Belgium chocolate, beers making their way into the Sri Lankan market shortly.

Q: What are the prospects for Belgium investment in Sri Lanka?

A: Belgium is also the fourth in terms of investment in countries in Europe. Belgium investors have already setup profitable ventures in the fields of manufacturing of tyres, lace, work-ware, meet products, sail boats, etc. Availing of Sri Lanka’s incentives, liberalised exchange market and constitutional protection provided for their investments.

There is an added advantage coming to Sri Lanka, because companies manufacturing in Sri Lanka can enter markets in the Indian sub-continent, using Sri Lanka’s existing Free Trade Agreements with India and Pakistan. Some leading companies such as Balteau SA, Besix Sanotec, CFE, Dredging International, which participated in the delegation to Sri Lanka last November have been able to negotiate projects in the field of water management, waste management and dredging activities in Sri Lanka. Sri Lanka is also emerging as a global IT-BPO destination of choice in a number of key focused domain areas. The growing IT BPO industry in Colombo offers a unique advantage for Small and Medium Enterprises (SME) to enjoy prime access to a high quality talent pool and this is a good fit for any Belgium companies.

As Sri Lanka targets drawing foreign investment to the tune of US$ 1 billion in 2011, we see considerable potential leveraging Belgium capabilities towards development activities in Sri Lanka. This process has also been encouraged by the progressive revision by Belgium of the ‘political risk rating,’ ‘credit rating,’ and ‘travel advisory’ for Sri Lanka over the past six months.

Q: We understand that tourism in Sri Lanka is booming at present? What is Belgium’s contribution?

A: Sri Lanka has adopted a holistic approach in developing the tourism sector, to upgrade and expand the tourism infrastructure facilities where 30,000 new hotel rooms will be added over a four period, while promoting Sri Lanka as a destination with a wide variety of activities for visitors, from what remains of its 2,500-year recorded history including eight UNESCO World Heritage sites, through sunny beaches, hilly tea country, virgin forests, wildlife safaris, adventures and eco tourism attractions, Ayurveda, sports activities, to its spicy cuisine and warm hospitality. Over 650,000 tourists visited Sri Lanka in 2010. This year, Sri Lanka Tourism is aiming for 700,000, and by 2016 the country hopes to attract 205 million annually. As for Belgium, in 2010 Belgium tourists visiting showed the impressive growth of 106%, compared to a Western European average of 51% and an overall increase of 45%. The Belgium arrivals were only marginally short of the highest-ever tourist arrivals recorded from Belgium, a statistic we hope to improve on considerably this year.

Besides our national carrier SriLankan Airlines, which offers special connections for Belgium tourists flying out of Paris, Frankfurt and London and connectivity between Belgium and Sri Lanka also considerably expanded in the last quarter of the 2010 with the introduction of weekly Brussels- Colombo direct flights by TUI airlines with Jetairfly-Thomas Cook collaboration.

Q: In recent years Sri Lanka has also made significant contributions to the socio-cultural calendar of Brussels?

A: We are happy to do that. The most prominent occasion in this regard was the performance of renowned Sitarist Pradeep Ratnayaka in October 2010 at the Palais des Baux Arts (BOZAR) on the sidelines of ASEM 8, where we were privilege to have the President of the European Council Herman Van Rompui as our Guest of Honour. Pradeep also performed at the European Parliament at an event organised by ‘the Friends of Sri Lanka’.

In February 2010, the ‘Channa-Upuli’ dance troupe came to Brussels to perform at BELASIA and a ‘Sri Lanka Food Week’ was also held at the Raddisson Blu Royal Hotel. In December 2010 we hosted ‘Sri Lanka: Back to Business’ at the Brussels Travel Expo, while we have also promoted Sri Lanka at several travel/ trade fairs in Antwerp, Bruges, Charleroi and most recently at the ‘Salon des Vacances’ (Belgium’s largest B2C) travel fair held in February 2011. In all these ventures we are fortunate to have had the support of the small but very active Sri Lanka expatriates community in Belgium, who no doubt take great pride in seeing their heritage being showcased to their hosts.

Q: How much have you enjoyed living in Brussels?

A: The past three years I have been in Brussels have been a period of transition – for my country, as well as for the Belgium and the EU. This has been challenging, but also exciting. There has never been a dull moment. Amidst the hustle and bustle of daily life, Brussels, with its concerts, museums and parks, has a serenity of its own. The multicultural character of those you meet offers perspectives one would find hard to come by in any comparable area. The food and the chocolate are exceptional.