Sri Lanka - Pakistan Business Council 18th AGM:

President’s economic policies have revived SL’s economy - Envoy

President Mahinda Rajapaksa’s economic policies have helped revive Sri Lanka’s economic performance, taking the GDP growth to 8.5 percent this year, said High Commissioner of Pakistan Seema Ilahi Baloch.

Addressing the 18th Annual General Meeting of the Sri Lanka-Pakistan Business Council on Friday at the Ceylon Chamber of Commerce, she said while the world is recovering from the effects of global recession, Sri Lanka’s growth is second to China.

She said 2011 is very significant since it is the 2600th year of the Enlightenment of the Buddha.

“The government of Pakistan has joined the people of Sri Lanka in the celebrations by contributing very significant Relics, which are now being displayed at Maligakanda Vidyodaya Maha Pirivena,” the High Commissioner said.

Baloch said in 1991, bilateral trade between Pakistan and Sri Lanka was worth US $ 96.72 million and in 2010; it stood at US $ 349.76 million.

“The growth is about 2.6 times. But even this growth does not reflect the true commercial potential of the two countries,” she said.

“We in Pakistan cannot forget the logistical and political support Sri Lanka extended to us in 1971 when it opened its refueling facilities for us. Nor can we forget your generous assistance during the recent floods in Pakistan. We, in our own humble way, have tried to help Sri Lanka, in whatever we can. We have tried to contribute to Sri Lanka’s endeavour to achieve peace for its people and in times of floods and after the tsunami,” the High Commissioner said.

“The terror attacks on our High Commissioner in 2006 and the terror attack on your cricket team in 2009 have not marred our relations because they are rooted in history they are bound by geography, and they are cemented by the colour of our skin. Our two peoples have learnt resilience after going through difficult periods, but we can be proud that our peoples have also learnt to bounce back after a crisis”, Baloch said.

The challenges your country has faced in the last few decades seemed insurmountable. Your success in facing and overcoming the ordeal speaks volumes of your resilience as a people”, she said.

“Your President’s economic policies, enshrined in the Mahinda Chintana and based on infrastructure development, privatization, reforms, and strengthening of export-oriented growth have helped revive the economy’s performance, taking the GDP growth to 8.5 percent this year.

“While the world is recovering from the effects of global recession, Sri Lanka’s growth is second only to China,” Baloch said.

“In our case, the recent devastating floods have affected our economy.”

“But, we have taken measures, not only to curtail the spill-over effect of this jolt, but also to stabilize economic growth. Our policies remain consistent. In the wake of this calamity the IMF recently extended a package to us as we adopted prudent monetary and fiscal policies to bring economy back on track. Maintaining a focused approach, and with this momentum, we are sure that our growth rate would climb to four to five percent this year,” the High Commissioner said.

Pakistan has one of the most liberal trade and investment regimes in Asia. Ease of doing business is improving. New avenues are being explored, she said.

“It is now an opportune moment to further build our economic linkages. Pakistan is the second largest trading partner of Sri Lanka within the South Asian region. Sri Lanka was the first country to sign a FTA with Pakistan. Under the Free Trade Agreement, Sri Lanka and Pakistan have agreed to offer preferential market access to each others’ exports by granting tariff concessions.”

“Sri Lanka would be able to enjoy duty free market access on 206 products in the Pakistani market. Pakistan, in return, would gain duty free access on 102 products in the Sri Lankan market,” she said.

Baloch said the overarching bilateral economic architecture between Pakistan and Sri Lanka is however, restricted only to trade in goods.

“A Comprehensive Economic Partnership Agreement (CEPA) including trade in services as well as investment promotion will boost trade between both countries.

“It would be beneficial both for Sri Lanka and for Pakistan to move forward on CEPA,” she said.

“We need to urge the businessmen and traders to explore commercial opportunities especially in the non-traditional sectors which could be mutually beneficial for both the countries.

“There is a huge potential for increased trade in light engineering goods, fresh fruits and vegetables, processed goods, textiles, cement and clinker, pharmaceuticals, and industrial chemicals, to name a few. The Free Trade Agreement has provisions which would facilitate enhanced trade.

“It is also up to the business community to provide feedback to the respective governments and identify bottlenecks in the existing trade mechanism,” she said.

“Federations of Chambers of Commerce and Industry of our two countries have signed an agreement during the visit of President of Pakistan. I am confident that with more business-to-business interactions - including participation in trade fairs, single country exhibitions, know-how of market trends in Pakistan and Sri Lanka - the commercial activity can be increased,” Baloch said.

“Pakistan is keen to enhance trade with Sri Lanka and identify investment opportunities in Sri Lanka. But increased interaction through exchange of business delegations is required to fully realize the potential of trade, joint ventures and possible investments. The proximity between our two countries could be a valuable trade facilitator,” she said.

“We have our challenges. Pakistan is going through difficult times. But we take heart from you, and from the people of your country. We hope that as for you, for Pakistan too, this is but a moment in history, she said.

“It will pass and we too will look to new horizons of hope and prosperity,” she said.