Daily News Editorial

A victory for the economy

22 October 2016

Prime Minister Ranil Wickremesinghe’s official visit to Brussels, Belgium, where the European Union is headquartered, has resulted in plenty of gains for the country. The most beneficial outcome of his visit is the planned restoration of the GSP Plus facility for Sri Lanka, which was withdrawn in 2010, during the tenure of the last regime due to concerns over human rights.

EU officials have assured Prime Minister Wickremesinghe that the facility would probably be restored as soon as March 2017 once certain technical issues are ironed out. This is a moral victory for the Yahapalanaya Government which has managed to overcome the country’s international isolation in a short period and comes hot on the heels of the removal of the ban on fishing exports to the EU.

Sri Lanka has lost millions of dollars in revenue from garment exports alone as a result of the withdrawal of the GSP Plus facility whereas countries such as Bangladesh which continued to enjoy the facility uninterrupted have made vast strides in the interim period. Sri Lanka has to compete with a host of countries in the region and beyond in this trade and the loss of a trade concession can have a devastating effect. In fact, several garment factories had to be closed down due to a lack of orders following the loss of GSP Plus. The resultant loss of jobs has affected hundreds of families and the society in general.

With the facility back in place, Sri Lanka will be able to recoup at least some of the losses incurred. Garments are one of the country’s top export items and any losses on that front affect the economy adversely. The GSP restoration will once again enable Sri Lanka to compete on a level playing field with many other countries that already enjoy this facility. Moreover, as the Prime Minister has pointed out to the media in Brussels, it will also resolve many other economic problems faced by the country. With Budget 2017 only weeks away, the GSP announcement will certainly be a shot in the arm for the economy.

Apart from the GSP, the Premier’s visit has boosted EU-Sri Lanka ties which were constrained by the previous regime’s belligerent attitude towards human rights. The EU has already offered its expertise for the country’s ongoing constitutional reform process. Although the new Constitution will essentially be a home-grown initiative, lawmakers should look beyond our shores for any features that can be adapted to the Sri Lankan context. The EU is a rich example of multi-culturism at work - 28 countries and languages, 508 million people, 300 parties, and 751 representatives united for the cause of European unity. There are many lessons that we can draw from the EU in this regard.

Even with the proposed exit of the UK from the EU following its “Brexit” vote, the EU will still be a formidable force on the world stage and an example to other regional bodies such as South Asia’s SAARC, which is still struggling to achieve its core objectives more than 30 years after inception.

The EU is also important to Sri Lanka in many other ways. It is one of Sri Lanka’s key markets for tourism, although our neighbouring countries have surpassed it recent years in terms of the number of arrivals. KLM’s re-launch of Amsterdam Schiphol-Colombo flights from next month will be a major boost for tourism and once the Bandaranaike International Airport runway repair is completed by April next year, more European airlines are likely to fly to Colombo. The Government and aviation authorities should actively encourage more European airlines to call at Colombo.

Efforts should also be made to increase exports other than garments to the EU. Gemstones are a case in point. Belgium is the diamond and gemstone capital of Europe and the Prime Minister’s visit to the world famous Antwerp Diamond Pavilion has proved to be very fruitful for the local gem and jewellery industry. The Premier was told by the Pavillion officials that they hope to increase gem imports from Sri Lanka, which is renowned for its exquisite gemstones. This is good news for the local gem industry which is keen to explore new markets and increase exports to existing markets.

Both President Maithripala Sirisena and Prime Minister Wickremesinghe have been meeting foreign Heads of State on a regular basis which has enhanced the country’s international image and profile. Foreign Minister Mangala Samaraweera too has been conveying the message in many world capitals that Sri Lanka is open and ready to constructively engage with the international community. This is the correct approach since the brand of pseudo-patriotic international isolationism practised by the previous regime took the country nowhere. We live in a gloablised environment and it would be naive to think that we can live without the cooperation of all friendly countries. It is only by becoming an active member of the International Community that Sri Lanka can aspire to become a top ranking nation in Asia.