The ‘right to live now’ and GSP+ dominates session
Dhammika Perera, Chairman of Board of Investment (BOI) in an address this evening to the world-renowned Oxford Union, University of Oxford placed Sri Lanka’s greatest challenges and opportunities for the future, before an audience of academia, professionals and distinguished personalities.
Speaking on the broad topic “Emerging Economies: Challenges Faced and Challenges Ahead”, Perera drew on his knowledge as an entrepreneur and a top bureaucrat, to illustrate the Sri Lankan experience.
Citing the global warming debate as a critical impediment to the growth of emerging economies, Perera emphasized on the need for the global community to recognize that by restricting the developing world from growth that they are engaging in the restriction of a human right – the ‘right to live now’. He further reasoned, “the developing world depends on the development and availability of low cost energy in order to expand its economies” and noted that the “trade-off for the emerging economies is one of short-term survival as opposed to environmental protection” whereby “the answer is always toward immediate survival”. Perera summed his argument for growth by reasoning industrialization as a catalyst for environmental consciousness wherein emerging economies can harness appropriate technologies for sustainable development, to effectively balance development with concern for the environment.
Speaking specifically on Sri Lanka, Perera recounted the myriad of challenges the economy faced in the past, including a protracted conflict and additional adverse shocks including a tsunami, commodity crisis and the on-going financial crisis. In his address the BOI Chairman spoke with candour on the past and painted a realistic picture of the future for Sri Lanka. Crediting the nation’s people for their positivism, resilience and patience, Perera noted that despite debilitating past circumstances Sri Lanka stands on the threshold of future economic prosperity due largely to the vision and action of H.E. the President Mahinda Rajapakse to end the conflict and his strategic direction towards the adoption of progressive economic reforms towards national wealth creation.
“For over sixty years, our nation’s per capita income has remained below or on par with USD 1000. In the last four years, as a cumulative outcome of the prudent pro-poor development strategies, the national economy has grown expanding per capita income to USD 2000. Our nation is also on track to achieve the majority of Millennium Development Goals by 2015. Thus, Sri Lanka has grasped the historic opportunity to evolve from a lower-income country mired in conflict, to a middle-income country in lasting peace”, he stated.
Speaking on the rejuvenated efforts towards promoting FDI, Perera informed the audience on the favourability of Sri Lanka’s business environment for foreign investment. “There are no restrictions on entry to FDI and the repatriation of earnings, the safety of foreign investments is guaranteed by the Constitution. In addition, Sri Lanka has investment protection agreements with over 25 countries and double taxation relief for over 37 countries. Restructuring of the Board of Investment – Sri Lanka’s focal facilitation agency for investment promotion - has made it more pro-active, focused, devoid of red-tape and corruption free. Testimony to this is that the BOI attracted the total FDI attracted over 26 years in a mere four years from 2005 to 2009. The report on Global Investment Promotion Benchmarking published by the World Bank ranked BOI as the No. 1 Promotion & Facilitation Agency in South Asia for the year 2009”, he noted.
In looking to the future, Perera spoke on the role of the Northern and Eastern provinces as mediums for accelerated economic growth. He noted that the re-integration of the two provinces with the rest of the economy would “open approximately 2/3rd of the nation’s maritime and coastal resources, 1/3rd of untapped fertile land for productive use “and reign in “approximately fifteen per cent of the country’s population” into rejuvenated economic activity.
However, Perera elaborated on and expressed growing concern about emerging nations being threatened by protectionism as the global downturn impacts Western nations.
He said: “Despite the promising outlook for Sri Lanka, it is indeed pertinent, for us to be aware of the fact that the world economy and other external factors will determine and shape Sri Lanka’s forward path”.
“The worrying signs of an increase in trade protection by developed nations despite the fact that revival of trade is key to support the global economic recovery, will push emerging economies into further difficulties”.
“From Sri Lanka’s perspective the impending loss of the GSP+ tariff concessions due to pressures from the European Union will set our nation back in terms of competitiveness of our garments trade, will cause loss of employment and to a degree will destabilize our trade. However, Sri Lanka will regain its ability to balance the external environment merely based on the emphasis, the investments made and the degree of sophistication of our garment industry”, he noted.
In ending, he pragmatically noted to the distinguished audience of the Oxford Union; “thus, it seems unrealistic that Sri Lanka’s economic progression will be unhindered, however, an open mind, a realistic approach and optimism will, I believe take us there”.