Sri Lanka - Reaching Out to the World

The speech by Foreign Secretary Dr. Palitha T.B. Kohona to the Ceylon Chamber of Commerce on Thursday, April 24.

In the modern world, no country is an island. Although Sri Lanka is geographically an island, we are so interconnected with the outside that we are no longer an island in the wider sense of the word. In the past, islands were isolated but isolation is a thing of the past. We are very much dependent on the world. The world is a necessary part of us.

Importantly, everything that we do gets noticed around the world, particularly in view of the easy connectivity through the electronic media.

Furthermore, global currents and tendencies, contemporary thinking and attitudes and upheavals and changes elsewhere impact on us constantly.

As one observer noted, the flutter of a butterfly at one corner of the globe could have a chain reaction resulting in a hurricane at the other end of the earth.

Interconnectivity

Sri Lanka has developed complex chains of interconnectivity with a range of countries around the world and international organisations over the years. Some of these linkages go back hundreds of years and even millennia. Many, originating in cultural, religious, trading and colonial factors, are today based on multilateral and bilateral treaties.

Sri Lanka’s contemporary bilateral and multilateral treaty connections substantially underpin much of its global relations whether they are political, economic, commercial, etc. It could be said that very little of Sri Lanka’s external relations is undertaken today without relying on a complex web of multilateral and bilateral treaties.

While these treaties establish or reflect global standards they also impose binding rights and obligations. Admittedly, we are part of a system that is not perfect, but it is a system that is gaining in strength.

For example a letter posted in a roadside mail box in Colombo would reach its destination in any corner of the world without hindrance thanks to a well established framework of international rules relating to postal services.

Similarly, international telephonic communications, sea transportation, air travel, banking, trade transactions, etc take place against the background of an intricate web of international norms underpinned by treaties. Modern commerce would not have reached today’s level of overriding importance in the absence of this treaty framework.

Sri Lanka, as a member of the international community, is dependent on this network of norms for its development and continuing prosperity and naturally others who are its members are also in a position to use this facility to exert influence on us. It is the window through which the world observes us.

It is also the window for us to show our best face to the world. We need to be constantly conscious of its potential and its drawbacks. While we benefit from it, we also open ourselves to the world through it.

Sri Lanka is a Member State of the WTO. The WTO Agreement requires Sri Lanka to work towards progressive trade liberalisation. The dominant philosophy is that trade liberalisation will bring wider benefits to our population. Cross-border trade is enhanced, through bilateral Free-Trade Agreements (FTAs).

Sri Lanka concluded the first FTA with India in 1999, and a similar FTA was signed with Pakistan in August 2002. The Agreement with India has resulted in the bilateral trade reaching approximately US$ 3 billion.

Sri Lanka is now in the process of negotiating Comprehensive Economic Partnership Agreements with both these countries. These are in the nature of Economic Integration Agreements (EIAs) - a primary vehicle in liberalising trade policies, the ultimate benefactors of which will be the people of Sri Lanka.

The expansive nature of such Comprehensive Economic Partnership Agreements, aiming at the liberalization of trade in goods as well as services, is also consistent with the obligations undertaken by Sri Lanka under the main substantive Agreements of the WTO system such as the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Agreement on Trade-Related Investment Measures (TRIMS), which were the outcome of the Uruguay Round of Trade Negotiations held from 1986 to 1994. They entered into force as a package in 1995.

Benefits

There are other important categories of international agreements which benefit Sri Lanka economically. Bilateral Investment Treaties (BIT) play a major role in this regard as they provide a degree of reassurance to foreign investors.

Sri Lanka has entered into over 25 such investment treaties with other States. Most recently, the Government of Sri Lanka was able to finalize two further Agreements with the Czech Republic and Jordan.

Following a proactive approach to establishing economic and trading relations, the government in February 2007 concluded an Agreement on a Framework Programme for Financial Cooperation with Hungary, while an Agreement on Economic and Technical Cooperation with China was signed in February, 2007.

Other developments concerning the subject of bilateral economic relations were the signing of an Agreement on Trade and Economic Cooperation with Israel (in April 2007) and a Trade Agreement with Jordan, in May 2007.

Sri Lanka has also entered into over 50 Bilateral Air Services Agreements. The conclusion of such agreements dates back to 1948, when Ceylon (as Sri Lanka was then known) entered into an Air Services Agreement with India.

This was immediately followed by agreements with countries such as Pakistan (1949), Thailand, Myanmar and Australia (1950) and the Netherlands (1953).

There has been much activity in the field of air services, especially during the recent past. For instance, in April 2007, Sri Lanka signed an Open Skies Air Services Agreement with Switzerland. Also, a Memorandum of Understanding which provides for liberalized air services between Sri Lanka and China was signed in March 2007.

These international agreements confer extensive benefits to Sri Lanka but they also contain obligations with which we need to comply. The benefits gained through our international network of treaties have helped Sri Lanka in great measure to reduce poverty and achieve economic development, since achieving independence in 1948.

Outside the international legal framework but in line with UN goals Sri Lanka has shown considerable success in accomplishing the Millennium Development Goals, which aim at reducing poverty and improving the lives of people, as agreed upon at the Millennium Summit in 2000.

We should be proud that the number living in poverty has dropped to 15.2 per cent. While much more needs to be done, the progress Sri Lanka is making is noteworthy, especially at a time when the entire country is challenged by the brutal terrorism perpetrated by the LTTE.

It also needs to be remembered that the LTTE, consistent with the strategy of other terrorist groups who have sought to cripple the economies of target countries, has aimed its sights at the economy of this country.

It is a strategy which appears to be succeeding to some extent, unfortunately due to the conscious or unwitting acquiescence of certain international players. The LTTE has attacked major economic targets in the country, and has threatened to continue such attacks.

Tourism and inward investments have been a key focus for them. No great wisdom is needed to understand the terrorist motive. The LTTE’s prime motive has always been to see that Sri Lanka is debilitated economically, that its development is stultified, and the lives of its people made miserable. Terror is sown to reap a harvest of misery.

What then is remarkable is that the Government of Sri Lanka has continued a process of ensuring economic development amidst these difficulties.

Broad relations

Against the background of broad relations based on treaties and other agreements, successive Sri Lankan governments have taken proactive measures to maintain a dialogue with key international players with a view to ensuring continued economic connectivity and national security. For example, the President has made several visits to targeted countries over the last two years.

These visits have covered countries such as India, Pakistan, China, Japan, Maldives, the UK, the US, Italy, the Vatican, Iran, Jordan and Kuwait. He has also attended the General Assembly of the UN, the ILO, the G11 Summit, the Baoa Forum and the Commonwealth Heads of Government Summit.

Almost all his visits have enabled business delegations to exploit resulting opportunities. All of these visits have been used by the President to consolidate our bilateral relations, to explain Sri Lanka’s position to the world, reassure the world of our policy approaches and to listen to the views of our interlocutors.

Every possibility has also been used to encourage economic and trading contacts. The Prime Minister, Minister of Foreign Affairs and other Ministers have also visited a range of countries.

Visits have also been undertaken at senior officials’ level. Many foreign delegations at senior level have come to our fair isle in recent years. Most recently from Thailand, the UK, the US, China, Maldives, India, Japan, etc.

Regular visits to Sri Lanka have been undertaken by senior officials of the UN.

These visits have given us the opportunity to highlight the positive developments that have taken place in Sri Lanka and also to endeavour to correct misconceptions.

Importantly, in the face of a determined terrorist challenge and its sophisticated propaganda machine, we have sought to explain to the world measures undertaken by the government and its security forces to counter the brutal threat of terrorism that confronts us, the evolution of the political process designed to address the concerns of our minorities, particularly the Tamil minority, the APRC process, measures taken to consolidate and advance our democratic institutions in particular, efforts made to hold elections in the Eastern Province after a lapse of 14 years, and measures undertaken to address the economic and social needs of our people.

The achievements of our country in recent times, including our success in substantially attaining the Millennium Development Goals, our high ranking in the UN Human Development Index, in initiating vast development programmes, building extensive new infrastructure, including roads, three power plants and a harbour and in creating opportunities for industrial and services expansion.

In addition these visits have contributed towards encouraging inward investments and foreign tourist arrivals, particularly from new sources.

I am certain that there are areas where we could perform better. We will keep trying.

Despite the adverse publicity, Sri Lanka received a record level of FDI, US$ 751 million, in 2007 and the tourist arrivals though unsteady, recorded increases from the Middle East, Eastern Europe and Asia. A bond issue of US$ 500 resulted in an over subscription of USD 1.6 million.

Sri Lanka has been an active member of the United Nations from its inception, since its admission to this august body in 1955 and in the process acquired a reputation as a reliable member of the international community. Sri Lanka has served as a President of the General Assembly and as a member of the Security Council in 1960 - 1961.

To be continued