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Sunday, 6 April 2014

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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 2012.

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 said.

“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.

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