Sri Lanka’s foreign policy was misaligned with the economic policy in the recent past. the country lost the qualification to be a beneficiary of the ‘GSP Plus’ facility due to short sighted foreign policy. Export income which stood around 35% of GDP in 2004 declined to 14% last year.The Prime Minister’s vision is to promote Sri Lanka as a trading country and it’s relations with the outside world as one of economic diplomacy.‘Sri Lanka will pursue new policy initiatives and rebuild its relations’ he said The Prime Minister has also commented that in our international relations China is as important to us as any other country.
Addressing the members of the United Professionals Group on Thursday, 26th November at Sri Kotha, Dr. Harsha de Silva said, “The narrow and petty minded foreign policy pursued during the last decade saw an unhealthy downward trend that led to a decline of the country’s economy. An oft repeated slogan was that the UNP was conspiring with the US and the West to get rid of the then president who won the war for the country and western interests were trying to engulf the country. Sri Lanka was perceived as the black sheep of the global community as a result of this short-sighted foreign policy. The current dynamic market based trading economy , first introduced by late President J.R. Jayawardena and continued to be followed , is dismally misaligned with the foreign policy that was pursued in the recent past. The foreign policy did not support economic policy and as a result, it led to an unsustainable equilibrium in economic and foreign policy ”.
He went on to say that, due to this high-handed attitude and failure to address the issues properly, the country lost the qualification to be a beneficiary of the GSP Plus facility granted by the US and the EU. Local industries, particularly the garment industry which provided employment to thousands, virtually collapsed. This affected mainly the small and medium level garment factories but large companies that had contracts for branded products were able to survive. The employment opportunities and livelihood available to the people therefore suffered.
“ Sri Lanka was blind to what was happening in the world and because of the paranoia that Sri Lanka should not engage with certain countries, our relations with many economically influential countries have soured deeply and as a result, the bilateral trade agreements , especially with India did not see the light of day. We were precluded from negotiating and including terms more favourable. Export income which stood at around 35% of GDP in 2004 declined to 14% last year. Instead of exporting goods and services of Sri Lanka, it was compelled to export ‘ human beings ’or practise ‘ neo-slavery ’ to earn dearly required foreign exchange. The poor workers so employed were called by catchy phrases like ‘ RATA VIRUWO ‘ but there were hardly any gains for them .” Dr. Harsha added that the new government, with the vision and wisdom of our leaders, President Sirisena and Prime Minister Wickremasinghe, had to think differently and take a fresh look at everything. We had to formulate and pursue a foreign policy envisaging friendship with all countries, that would ultimately benefit Sri Lanka in the long run. That is to say we needed to provide services to our customer, meaning the world, and then reap the economic benefits. Kudos to Foreign Minister Mangala Samaraweera who painstakingly rebuilt our relations with many countries that were offended by the previous regime. The government’s new thinking is that, we would not send people out but we will export our goods and services ”. Sri Lanka will invite investments that will help to produce exportable goods of high quality. We will try and enter the US market, the largest in the world on a higher scale.
He also said that the Prime Minister’s vision was that Sri Lanka should be a trading country and it’s relations with the outside world was one of ‘economic diplomacy’, which was a new paradigm. Sri Lanka cannot depend on the global trade envisaged by the World Trade Organization or outcomes of the ‘Doha round ’ which was not successful but engage with the appropriate regional economic groups such as Trans Pacific Partnership (TPP accounts for nearly 40 % of world trade ) and other mutually beneficial bilateral agreements. Vietnam, a country which had its exports around US $ 2 billion in 1990 almost on par with Sri Lanka, had grown to US $ 120 billion in 2014 compared to Sri Lanka’s US $ 11 billion. Vietnam will soon join the TPP . Due to the new trends in foreign relations coupled with internal developments in the fields of democracy, good governance and human rights, Sri Lanka had earned so many accolades, the country was invited to participate at the Open Government Partnership Conference in Mexico where 66 countries participated. He had the privilege to participate along with Wijedasa Rajapakshe, Minister of Justice at this conference. Ms. Samantha Powers, US cabinet member of President Obama’s government and US representative at the UN, in her address spoke eloquently about Sri Lanka’s new developments in such glowing terms that our country earned tributes from many representatives present. “So, considering all these aspects, the new policy initiative is economic diplomacy in foreign relations. Sri Lanka’s relations with other countries will be focused on it along with other considerations like cultural ties being given due cognizance. US will soon engage with Sri Lanka in further economic participation.”
In answering a question from the audience, Dr. Harsha explained that Sri Lanka maintained her good relations with China as before and would like to see more investments rather than loans from that country. The Prime Minister has himself commented that China was as important to us as any other country.”
Responding to another question, Dr. Harsha explained that the GSP Plus facility was not renewed due to our failure to enact certain legislative requirements that were agreed upon. However, these aspects are being pursued with vigour. An enormous amount of documentation is needed to be completed.
Germany is keenly supporting our request to restore the GSP Plus facility which is expected to be finalized next year. USAID is also reconsidering the extension of its facilities here.” In conclusion, he reminded the participants of the famous quote from President Clinton’s campaign: ‘It’s the economy that’s stupid !’ drawing laughter from the audience.
Earlier, Mr. Kanishka Jayasinghe, President UPG whilst welcoming Dr. Harsha de Silva stated:” This meeting was somewhat like the OPA’s ‘ meet the people ‘ discussions at which President Maithripala Sirisena himself had participated then as a minister. Today’s participants include members of the National Association of Professionals in Engineering, Technology and Science (NAPETS ) and the Young Professionals Organization ( YPO) ”. He said that since Dr. Harsha was a friend of all three organisations and because he himself declined a formal introduction, he was inviting Dr. De Silva to address the gathering. Dr. Mohan Abeyratne proposed the vote of thanks. M.T.P.