Outlook promising :

Lanka’s economic prospects improved - Indian Envoy

by Lalin FERNANDOPULLE

Sri Lanka’s economic prospects have improved substantially after the war and its outlook is more promising said Indian High Commissioner in Sri Lanka, Ashok K. Kantha addressing the ‘Key Persons’ Forum’ organised by the Federation of Chambers of Commerce and Industry of Sri Lanka.

Ashok K. Kantha

He said the Indo-Sri Lanka partnership is a key driver in achieving Sri Lanka’s vision of becoming an economic hub in the region.“Sri Lanka is an emerging aviation hub with vast expansion in the ports and aviation sectors. Sri Lanka handles around 70 percent of India’s transhipment business”, The High Commissioner said.

Kantha said Sri Lanka should take maximum advantage of the Comprehensive Economic Partnership Agreement (CEPA) and improve trade with India.

Sri Lanka India relations have been strong for over a millennia and mutual support has been strengthened over the years. Despite a love-hate relationship from time to time culturally, linguistically, and ethnically both share more similarities than differences.

The High Commissioner said discussions on the CEPA have resumed and it is now entirely upto Sri Lanka to decide the pace of negotiations and make use of the opportunity vital for economic integration.

“The objective of India through CEPA is not merely to seek preferential market access to trade services but to have a larger approach for closer integration”, he said.

Negotiations on CEPA has been on a snail pace growth with no progress made on reaching a final agreement. Discussions have been centred around trade barriers of both countries which needs to be ironed out for the success of the agreement.

The High Commissioner said Sri Lanka will have to pay the price of an opportunity cost if it delays to sign the agreement. India signed the CEPA with Japan strengthening economic integration in the region. The private sector has been sceptical about the implementation of CEPA on fears of being overwhelmed by the Indian thrust. Lack of information about CEPA in the public domain has resulted in formation of misconceptions.

India is an enormous market for Sri Lankan products and services provided CEPA is signed and Sri Lankan gains access. Kantha said Sri Lanka has proposed a landmark budget for 2011 but there should be a more transparent and predictable investment climate with a pro-active participation of the private sector.

“The private sector is the engine of growth and its role is absolutely essential to develop the economy”, Kantha said. Sri Lanka should take advantage of the linkages to benefit from the vastly developed IT, railway, dairy and sugar industries.

The IT sector in India has recorded an exponential growth and it is one of the primary outsourcing markets in the world. Sri Lanka’s lack of focus on developing the sugar, dairy and transportation sectors has come under severe criticism. A large quantity of sugar and milk powder is being imported annually draining out valuable foreign exchange from the country.

India is in the process of resuming ferry services with Sri Lanka and agreement in this regard is expected to be signed shortly. Interconnecting electricity grids between India and Sri Lanka is also in the pipeline.