EU investments in Sri Lanka tops $ 1 b

Enterprise Development and Investment Promotion Minister Anura Priyadarshana Yapa said at the European Union Summit on May 5 that Sri Lanka greatly values her economic relations with the European Union which has been, since our independence, one of our leading trading partners.

GSP+

Sri Lanka benefits from an Agreement known as the GSP+, which grants duty free access to Sri Lankan goods in this huge market. This arrangement is important to the private sector of Sri Lanka, notably for enterprises engaged in the apparel industry.

European Union Investments in Sri Lanka represent a total investment of over one billion dollars and employ 73,000 workers.

In 2008, EU companies invested US$ 354 million (Euro 265 million) in Sri Lanka.

These enterprises originated from Belgium, Cyprus, the Czech Republic, Denmark, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Sweden and the United Kingdom.

The EU's economic presence in our country represents 269 factories and other enterprises that include both fully owned European Union ventures and joint ventures with Sri Lankan companies.

The sectors they represent include textiles and apparel, the IT and BPO sectors, gems and jewellery, ceramics, rubber products, coir products, wooden and soft toys, tourism, infrastructure, light and heavy engineering, electronic products and food processing.

The European Union is considered today the world's largest trading block and though consisting of 27 very different countries with often very varied aspirations, it has achieved cohesion on many vital areas governing the economy.

Hence much has been achieved since the Treaty of Rome of 1957, when the European Union's founding fathers conceptualised a common market as a first step towards greater European integration in the aftermath of World War II.

The European Union is an excellent example of how confidence-building measures can put an end to long-standing distrust between nations, and bring together countries that have marked differences.

lessons

There are lessons from this history for all nations including of course Sri Lanka, which is in the process of ending a conflict that has lasted over 3 decades and had a debilitating effect on this country and the lives of her people.

When this internal conflict will be brought to an end, very soon, the people of Sri Lanka will be able to plan their development without having to factor in the conflict as one of the deciding variables.

It is important to note that Sri Lanka's relations with the European Union have always been excellent as we both share democratic political values.

While being an extremely tolerant nation, Sri Lanka is determined as any democracy, to protect her democratic institutions and territorial integrity in the face of the challenges posed by terrorism.

President Rajapaksa expressed these views to the visiting Foreign Ministers of friendly EU nations recently.

There is now huge potential from the re-integration of the North and the East to the rest of the country while at the same time there are gigantic challenges ahead for this nation.

A Summit such as this one therefore is highly opportune in the present economic and political context. And for this reason I welcome this forum for several reasons.

options

Firstly the summit's purpose is to look at options available to Sri Lanka and particularly at strategies for rebuilding the nation and unleashing Sri Lanka's true potential.

This is absolutely necessary as normalcy will return and investor confidence will build up.

The most important issue is how to make up for the destruction and loss of opportunity, estimated at US$ 200 billion that Sri Lanka has incurred in 3 decades of conflict.

this is purely a monetary figure that does not take into account dislocation, human suffering and damage to the very social fabric of the nation.

Another positive aspect of this Summit is that it brings together many of the leading stakeholders in the process of re-building.

These are of course the Government of Sri Lanka, the international donor community from the European Union and the Sri Lankan private sector.

The Government of Sri Lanka particularly appreciates this initiative and the concern expressed by the European Union at this difficult juncture when many of the EU's 27 members face daunting challenges of their own resulting from the global financial crisis.

Collective action

All nations therefore need to work together to meet these challenges. I stress the need for collective action on such problems.

this Summit plans to address a subject, which is very close to my heart: lopsided economic development.

Naturally, this will be particularly apparent in the case of the North and East of the country that has been liberated. On this subject I would like to inform our distinguished visitors from abroad that this issue has in fact been extensively studied by the Board of Investment, which has developed a comprehensive scheme known as the 300 Enterprises Programme.

This scheme brings opportunities to outlying and less developed parts of the country by encouraging investors through generous fiscal incentives.

I suggest you get details on this programme from the BOI officials present.

The BOI has marketed the Eastern province for Investment by holding a series of seminars in Batticaloa and Ampara.

Similar initiatives will be started in the North very soon.

Incentives

We have already incorporated the newly liberated areas within a progressive scheme where they enjoy a special package of incentives aimed at encouraging investment. We have therefore made the first steps in that direction and expect that one of the dividends of peace will be investment.

Naturally if investors from the European Union are interested in investing in the Eastern and Northern Provinces, our officials will assist them in every possible way.

The commitment of this Government to integrate the newly liberated regions in economic terms is very high.

As you may know, President Mahinda Rajapaksa stated in his electoral manifesto that it is of paramount importance for Sri Lanka to address economic disparities between the regions to solve many of the social problems that are at the root of conflict.

Hence Sri Lanka will need more than ever the support of friendly nations to achieve this objective and the European Union whose member States have been some of our earliest friends, will no doubt have an important role to play in this vital endeavour .

Let me talk about the exhibition that you are hosting in the next few days.

The European Union is a leader in many areas of advanced technology that are needed by a developing nation such as Sri Lanka.

The European Union leads in many areas which this Government has earmarked for improvement such as power, engineering, transport, waste management and water treatment to name just a few areas.

The exhibition at the Summit will create knowledge and awareness about the EU's potential in these areas.

At the same time I deeply appreciate the fact that the exhibition has also showcased Sri Lanka's own areas of excellence such as in textiles and garments, rubber products, ceramics, fibre products.

Bilateral trade

In short I see many opportunities for an expansion of bilateral trade between Sri Lanka and the European Union and this will be mutually beneficial. Ultimately trade and investment will be the key to progress and Sri Lanka will need this in the present context of economic uncertainty. We must not look at the current crisis as a problem but rather as an opportunity upon which we can build our future.