EU insights

Wrapping up his tenure, EU Head of Delegation Bernard Savage talks to the Daily FT on varied experiences and offers views on trade, investment and politics

By Uditha Jayasinghe

Q: What are the top three experiences that you are taking away from Sri Lanka?

A: Well clearly when I arrived in January 2009 the situation was very different. There was an ongoing conflict raging in the north and of course subsequent to that there was the very difficult situation created by the displaced and obviously the end of the conflict and the resettlement of those displaced have been experiences that marked my period here. Another one was the whole question of GSP Plus. So I think it’s fair to say that those three events or issues were ones that were the most important during my tenure here.

Q: How different was your time in Sri Lanka compared to posts that you held previously?

A: I suppose the simple and truthful answer is that every country is different because the issues are different. Every country has its own way of doing things, has its own culture, so it is difficult to compare different countries. Most of my professional experience was in the Arab world where a whole set of different issues were to the forefront. But a lot has changed in those self-same countries since I was there. This was my first experience in South Asia.

Q: How can Sri Lanka improve relations with the EU, especially in terms of investment?

A: I think it’s up to both of us, both from the European Union and Sri Lanka should work to improve relations. I think there is potential on a number of fields to either increase or create areas for cooperation. It has been to the forefront of my work here we’ve seen that in areas as varied as cooperation in technology and research, higher education. So there are a number of areas that we can both work on.

Q: But has there been progress on these specific points?

A: Yes we have moved ahead. For example, cooperation on civil aviation, which started about a year and a half ago and we have already signed an agreement. Initial contact has been made on science and technology research with a number of Sri Lankan institutes of higher education and those in Europe. I think it’s an area that has potential for considerable growth. There are already several contacts and programs that have started up. On higher education when I arrived here I believe there were only four Sri Lankan students benefitting from Erasmus Mundus scholarships and now there are several dozen and we hope to continue expanding that area. So we have made progress.

Q: EU has issued a yellow card on Sri Lanka’s fishing. What progress can we expect in this?

A: You are correct in saying that there was a list of countries, not specifically Sri Lanka, and since that time or even before that the authorities in Brussels responsible for fisheries were in discussion with the authorities here and that continues. Indeed, we hope that the remaining issues will be resolved and that any concerns we have regards unregulated and illegal fishing will be resolved. I know that the Fisheries Ministry here is putting considerable effort and my colleagues in the European Commission are doing what they can to maintain a dialogue with the Ministry here.

Q: The Minister recently told media that he was confident the warning would be retracted. What are your views?

A: Well I certainly wouldn’t want to contradict the Minister. What I can say is that discussions are substantive and continuing. We certainly hope that we can resolve outstanding issues.

Q: When is the deadline?

A: Within the next few months.

Q: One allegation that the Minister made is that EU partner countries are pushing this issue due to their interest and to sideline Sri Lanka’s fishing industry. How would you respond to that?

A: That is certainly not the case. The EU pools its sovereignty on fishing. This is an issue which is of concern to the EU because we source a lot of our product from overseas and both in terms of our internal industry but also in terms of the health of world fishing, it is important that we know and our consumers know that fish products sold in the EU including those from overseas are sourced in a sustainable, legal and traceable manner. It is not something that is specific to Sri Lanka.

Q: How can Sri Lanka improve its exports to the EU?

A: There are two things. One is the current economic climate. Everyone is aware that the EU economy has not known growth for a number of years and there are several factors involved in that but I think we can be confident that there will be a return to growth and there it is important to know that the EU is an open economy. If you look at external tariffs, they are as low as possible; the attitude of the EU is that we encourage imports, we need imports for our economy and for our consumers. We do not take the view that exports are something bad, I think that is an outdated view of the world.

The best way to take advantage of the EU market, given that it is the single largest market in the world, is to concentrate on quality and product differentiation. That is always the best strategy because consumers are dealing with products further up the marketing cycle and that are undifferentiated are not looking to origin when they make a choice. It is hard to convince consumers to pay extra if you have an undifferentiated product. So those that are looking to export to Europe, even in difficult times, the resistant products are those that sell themselves on quality and differentiation.

Q: Is there any possibility that GSP Plus can return?

A: First of all, GSP Plus has to be requested and so far no such request has been made so it’s a question I can’t answer.

Q: How can Sri Lanka grow tourism from Europe?

A: I think we come back to what I said about physical exports. Tourism products here have to provide European tourists and particular market segments, quality and an experience that makes people want to come back again. So it really is a question of knowing market segments and providing the right product for it.

Q: How does the EU view the much-anticipated northern elections?

A: We welcome the holding of the northern provincial council elections and as with all elections, we hope they will be held in a free and fair manner, especially free from violence. But these elections are particularly important has a building block towards a political reconciliation in Sri Lanka. It is not exclusively so, I don’t think anyone would imagine that only holding elections is a sufficient condition but it is an important condition for political stability in Sri Lanka as it moves forward.

Q: Several EU countries voted in favour of the UNHRC resolution on Sri Lanka. How will they continue their engagement?

A: We are merely observers of the Commonwealth and CHOGM. Three of our members are also Commonwealth members but they take the Commonwealth hat separate from the EU hat. We do not have a position on CHOGM for activities of the Commonwealth. We will continue to engage with Sri Lanka and EU member states which are part of the UNHRC and did support the US resolution and were co-sponsors.

We have different perceptions regarding these resolutions, in that we do not consider that they are hostile to Sri Lanka. Indeed we take as a starting point the recommendations produced by the LLRC. We fail to see how that can be seen as hostile. Quite clearly the Sri Lankan Government does not share that perception.  But we do not consider it, nor do we consider ourselves hostile to Sri Lanka.

Q: Post-war FDI figures have been dim so far. Given that situation, would the EU be interested in investing here?

A: There it is a question of selling Sri Lanka. The EU as such is not directly involved in trade promotion per se. Trade policy yes, trade promotion no. But even then individual countries cannot oblige their companies to invest. There it is the country that is wishing to attract FDI that has to make itself more attractive to those companies. If there is a feeling that FDI is disappointing, then a country has to look to itself.

Q: Do you think that the Expropriation Act, increasing corruption and lack of good governance are deterrents to investment?

A: Those are really questions that you need to ask companies concerned. It’s the finance directors and the CEOs who make decisions about locations, long-term investment and their perceptions I am not privy to. But they are the ones who need to be persuaded, not officials or governments because companies make decisions on their best interests and that is as it should be.

Q: Is the EU concerned with increasing engagement with China?

A: No. We ourselves are considerably engaged with China. We have strategic partnership with China and it is a major source of our imports and a major market for our exports. So we are certainly not in a position to regard other country’s engagement with China in a critical fashion. We have a long-term engagement with a growing and ever-more-prosperous China and if other countries wish to have the same, then that is perfectly normal and it is not something that we have questioned, nor will we ever think to question.

Q: So what is next for you on a personal level?

A: As it currently stands I will return because I am now about to finish a second posting overseas. Previously I was in Saudi Arabia and the normal practice is to return to my headquarters in Brussels. I don’t yet know what specific job I will have, but I will probably leave Sri Lanka towards the end of June.

Pix by Lasantha Kumara