EU impressed with Lanka's economic growth
The European Union (EU) is impressed with the economic progress Sri
Lanka has made after 2009.
However, there is a need for reforms and addressing key issues to
increase trade relations with the EU, EU Ambassador to Sri Lanka and the
Maldives, David Daly told a group of businessmen in Colombo last week.
The businessmen were from Information Technology companies who will
tour Brussels next month to explore business opportunities in Europe.
“The EU is happy with the development achieved by Sri Lanka after the
end of terrorism but efforts to enhance economic relations with Europe
and boost trade should be strengthened,” Daly said.
The EU is a major trading bloc for Sri Lanka accounting for around 27
percent of its exports to the region. The European Union accounts for
around 25 percent of foreign direct investment flow to Sri Lanka.
Sri Lanka's exports to the EU increased by 25 percent during 2009 and
Daly said that it is vital that Sri Lanka has business groupings in
Brussels where trade policies are made.
It needs to have people who could knock on the doors of the EU, its
trade partners and the EU parliament.
The EU is impressed with the work done by the European Chamber of
Commerce of Sri Lanka with the British High Commission and its
partners.“There is enormous potential which has not yet been tapped to
promote trade and investments. What is obstructing trade and investment
growth is the competitiveness of Sri Lankan exports to the EU which
follows stringent criteria for imports,” he said.Around two thirds of
EU's exports are imported components which need to be competitive and
the best. Daly said that impediments to enhance trade with partners is a
priority in the EU agenda.
“We need to work together to further the debate about some of the
impediments to investments and trade with Sri Lanka.
The dialogue between EU and Sri Lanka has not been positive,” he
“The withdrawal of the GSP plus scheme did not help in having a
healthy dialogue. Sri Lanka has taken the termination of the trade
concession on a positive note to promote exports and be more
competitive,” Daly said.
Sri Lanka and the EU held a round of talks last year for the first
time in a positive atmosphere. Sri Lanka has legitimate wishes to
promote trade with the EU. The European Investment Bank provided a loan
of 90 million Euro to develop small and medium scale enterprises in Sri
Lanka last year.
Sovereign Strategy, Executive Chairman Alan Donnelly said that there
should be Sri Lankan representatives in Brussels and should build
relations with new members of the EU parliament after parliamentary
elections in May. “Brussels is keen to open doors for Sri Lankan
businesses,” he said.
Sri Lanka's expertise in IT is recognised the world over. The IT and
BPO industry in Sri Lanka is a US$ 600 million business.
“Europe should learn more about Sri Lanka which has a higher GDP
growth rate and low unemployment rate of less than five percent. The
unemployment rate in the US is below eight percent while economic growth
is less that three percent,” Donnelly said. The global recession had an
adverse impact on Europe which has not fully revived yet. The
unemployment rate in certain countries in the region is high.
Donnelly said that the EU should provide assistance to reinstate the
GSP Plus facility to Sri Lanka. The international investigation on Sri
Lanka should not undermine development in the country.