500,000 jobs on the cards

Chinese delegation to discuss Hambantota SEZ:

By Rukshana Rizwie

The Chinese government has requested 15,000 acres of land in Hambantota for a Special Economic Zone (SEZ), as part of its ‘one belt one road’ network for which a delegation from China will be in Sri Lanka next week for discussions on the proposed deal, Minister of Development Strategies and International Trade Malik Samarawickrama told the Sunday Observer.

“It is envisioned that through the conception of this zone, we will create at least 500,000 jobs by setting up several industries,” he said adding that a visiting Chinese Delegation who toured the Mattala Aiport and Hambantota Port were of the view that an economic zone will be an impetus for investments in the Southern Province.

With Phase II of the Hambantota deep sea port being rolled out and Mattala airport on the lookout for investors, it is learnt that the creation of this zone could potentially provide the synergy that pulls all factors together.

“We will release 5,000 acres in three slots for the creation of this industrial zone, however all lands will be made available only after the appropriate Environmental Impact Assessments grant clearance,” he said.

He added that the government was of the view that many of the projects in the Southern Province lack proper strategic planning which has led to a dismal situation.

“We have to also pay a huge loan and interest, which is a huge burden, so we are trying to get the Chinese government to invest and help us in the long run to make these projects viable.” Sri Lanka is currently in $8 Billion debt to the Chinese government.

Meanwhile, another delegation from China including officials from the Ministry of Commerce will be here in Sri Lanka on Monday to discuss the Free Trade Agreement(FTA) with Sri Lanka.

He added that the Chinese FTA will initially focus on apparel, tea, gems and jewellery, rubber, coconuts and spices as key industries. There are also plans to include a priority tariff line for competitive Sri Lankan products that would go into immediate effect on signing of the agreement.

A study on the proposed FTA by the Institute of Policy Studies cites “The FTA would not only boost bilateral trade but help reduce Sri Lanka’s heavy reliance on traditional markets in Europe and USA. In this regard, it is imperative that the agreement covers a substantial number of tariff lines and trade as well as address non-tariff barriers that may hinder export expansion.

Considering the reservations about adverse effects of an FTA with China, the agreement needs to be prepared carefully taking into account asymmetries between the two economies, with a rational negative list and a longer phase-out liberalisation schedule.”