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BOI chief speaks at Oxford Union on challenges for emerging economies:

Pragmatic approach delivers results

[ Invest in Sri Lanka]

* Sri Lanka has investment protection agreements with over 25 countries

* Double taxation relief for over 37 countries.

* BOI attracted the total FDI attracted over 26 years in a mere four years from 2005 to 2009.

 


Chairman /Director General of BOI, Dhammika Perera

Emerging economies face a great challenge posed by the global warming debate. The Copenhagen Environment and Climate Summit of December 2009 shed new light on our planet, the global warming issue and the responsibility of every nation to work towards the reduction of emissions Chairman /Director General of BOI, Dhammika Perera said.

Speaking at a forum on “Emerging Economies in South Asia: Challenges Faced and Challenges Ahead” jointly organized by the Oxford University Sri Lanka Society and the Oxford Union at the Oxford Union yesterday he said the fact remains that global poverty comes before global warming.

“In order to alleviate poverty, economies need to industrialize. Industrialization in turn leads to emissions. In other words the equation is that a reduction in poverty leads to an increase in emissions.

“The trade-off for the emerging economies is one of short-term survival as opposed to environmental protection. The answer is always toward immediate survival. Despite the fact that there is a lot of discussion on human rights the world over, the global community has failed to realize that by restricting the developing world from growth, they are engaging in restricting this human right, the right to live now,” Perera said.

“We need to focus more on development because it has the potential to lead the emerging economies to be more concerned about the environment”,

Sri Lanka has demonstrated economic resilience and has been unique in that her GDP growth rates have over the past four years been consistently in the range of 5 to 6 per cent with the exception of a forecast 3.5 per cent in 2009. Our country has witnessed several additional adverse shocks, including a tsunami, direct effects of the commodity crisis and the pervasive effects of the ongoing financial crisis.

“The resources committed towards safeguarding Sri Lanka’s sovereignty, the safety of her people and the prevention of terrorism, needless to say, did weigh an enormous stress on the nation’s economy.

Yet at the macro level, the economy has maintained a remarkable growth in the face of these challenges,” he said.

Sri Lanka is a nation of people who are characterized by their positivism, resilience and patience. Firstly, I personally feel, that our culture that extends in excess of 2500 years and the Buddhist philosophy that is ingrained in the Sri Lankan way of life have moulded us to look beyond problems and challenges and given us the determination to carry on.

Secondly, a pragmatic economic approach has delivered sound returns. Policies that are reflective of an open minded approach and which are contingent to global and local challenges have been the key to Sri Lanka’s ability to sustain economic momentum. Likewise, the nation’s corporate community has rallied around and worked in tandem with national priorities especially over the last four years. In 2005, President Mahinda Rajapaksa envisioned an end to the conflict and the resurgence of the Sri Lankan economy.

Towards this end, Sri Lanka adopted a series of policy reforms aimed at acceleration of economic growth with special consideration given to pro-poor growth strategies which would actively favour agricultural production and manufacturing.

A rejuvenated effort to promote FDI has been a priority since 2005. Sri Lanka’s business environment favours foreign investment.

There are no restrictions on entry to FDI and the repatriation of earnings. Moreover, the safety of foreign investments is guaranteed by the Constitution.

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.

“As we look to the future, prospects for future growth are high. The re-integration of the Northern and Eastern provinces with the rest of the economy, provides an opportunity for Sri Lanka to embark on further policy reforms where private-public partnerships will define the creation of a more dynamic and vibrant economy,” he said.

Thus, the rehabilitation of human capital, the outcomes of comprehensive regional development programmes together with public and private investments will, without doubt, position these provinces as economic catalysts for Sri Lanka in the long term.

“From Sri Lanka’s perspective the impending loss of the GSP+ 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”.

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, the BOI Chairman said.

 

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