Exports flourish sans GSP Plus
There was a strange belief at
one time that Sri Lanka's economy would be doomed if the European Union
(EU) ceased the GSP Plus trade concessions for the country's exports.
The EU even attempted to link various internal affairs in Sri Lanka
with the GSP Plus facility and exerted pressure on Sri Lanka to take
several measures during the battle against terror.
However, the Government stood its ground and did not take any steps
which would affect the battle against terror as well as Sri Lanka's
sovereignty and territorial integrity. President Mahinda Rajapaksa vowed
that he would never permit external forces to dictate terms and
conditions and accept concessions as Sri Lanka's sovereignty and
territorial integrity reigns supreme.
When the EU made a subtle attempt to paint a gloomy picture on Sri
Lanka's economy, especially the garment industry, Opposition Leader
Ranil Wickremesinghe went globe-trotting to Europe to tarnish the image
of the country before the international community.
Though Wickremesinghe maintained that the aim of his tours to Europe
was to restore the GSP Plus facility, as a matter of fact, he conducted
a sinister campaign to humiliate Sri Lanka before the international
community to gain petty political mileage.
Several other opportunist Opposition politicians and leaders of key
NGOs which swallowed the bulk of foreign funding also worked
'tirelessly' to influence the EU and exert pressure to cease the GSP
Plus facility offered to Sri Lanka.
Wickremesinghe and his so-called economic pundits projected a gloomy
picture in the event the GSP Plus facility was discontinued and
instilled an abominable fear in the minds of people that hundreds of
thousands of jobs in the garment industry would be at stake due to the
inefficiency of the Government.
The Opposition had no qualms in giving it a political twist
notwithstanding the fact that the GSP Plus trade facility was merely a
temporary trade concession granted to Sri Lanka and a few other
countries severely affected due to the tsunami devastation. When the GSP
Plus facility was granted in 2005, it was made explicitly clear that it
was only a temporary facility granted for some Sri Lankan exports.
Regrettably, the EU and some INGOs attempted to intertwine the GSP
Plus facility with human rights and other issues in a tendentious
attempt to thwart Sri Lanka's courageous campaign against terrorism. The
so-called champions of democracy and world leaders, who claimed to be
battling against international terrorism, did not come to Sri Lanka's
rescue at that crucial hour. Instead, they exerted pressure on Sri Lanka
to abandon its battle against terror.
Thanks to President Rajapaksa's political fortitude and the unstinted
support of Sri Lanka's friendly countries, the valiant Security Force
beat all overwhelming odds to destroy the most ruthless terror outfit in
Even at the time the Opposition and INGOs projected a dismal picture
that Sri Lanka's garment industry would be unable to survive without the
GSP Plus facility, President Rajapaksa stood resolute and had implicit
faith in the quality of local garments and its comparative advantage to
compete in the open market.
Today, it has been proved beyond a shadow of doubt that Sri Lanka's
garments could make an indelible mark in the international arena. Sri
Lanka vindicated its position that it could compete in the international
market despite the withdrawal of the GSP Plus concessions.
On the other hand, Sri Lanka's exports to the EU countries had grown
by 38 percent in the last four months of 2010 despite the withdrawal of
the GSP Plus concession. According to the Central Bank Governor Ajith
Nivard Cabraal, this had been made possible as the country had braced
itself for this eventuality and consequently the impact of its loss was
The Governor of the Central Bank of Sri Lanka said that the
exaggerated fear that the withdrawal of the GSP Plus facility would lead
to massive job losses and a drop in exports did not materialise.
The EU is Sri Lanka's major trading partner and local exports to the
EU have been growing rapidly at a time when it had been falling in other
key markets, such as the United States. Sri Lanka exports products and
services worth 1.7 billion euros to the EU, which is 29 percent of Sri
Lanka's total exports. Garments and the textile sector account for over
55 percent of the value of Sri Lanka's exports to the EU, amounting to
more than one billion euros.
It is now opportune that we take note of our potential and the
quality of our products. Local products no longer need concessions to
compete in the international market as we could do so on the basis of
their quality, competitiveness and improved productivity. Sri Lanka had
succeeded in attracting investments from all parts of the world and
several countries have shown a keen interest in the manner in which they
could help strengthen Sri Lanka's economy.
Around 75 percent of the two billion dollar investment in government
international bonds had been funded by the US and EU countries. Over one
billion US dollars had been invested by Malaysia in the
telecommunication sector, while around 800 million dollars had been
provided by China in loans towards the power and ports sector, and
moreover, hundreds of millions of dollars had been invested by India in
building the railways and oil exploration operations.
Our guiding principle is that Sri Lankan products no longer need
concessions to compete in the international market. Sri Lankan products
could compete effortlessly on the basis of their quality and improved
productivity. It is imperative that Wickremesinghe and opportunist
Opposition politicians take cognizance of this fact rather than try to
compel the Government to 'beg' for the GSP Plus facility and degrade the
country and its industries.
Some Opposition politicians shouted from the rooftops and pressed the
panic button that the GSP Plus withdrawal would lead to unprecedented
job losses and result in a sharp drop in exports. The competitiveness
and high quality of Sri Lankan garments put paid to all such
The garment industry continues to flourish with exports to the EU
countries and a 38 percent growth was recorded in the last quarter of