‘Sri Lankan economy has now reached a new era’

The growing fears of economic meltdown could result in further protectionist policies across the globe and could affect free trade, and Sri Lanka will be happy to play its role in promoting the interests of the SAARC region.

“After nearly three decades of terrorism, the Sri Lankan economy has now reached a new era where we have to have a fresh look at our potential,” said Industry and Commerce Minister Rishad Bathiudeen.

Minister Bathiudeen

Minister Bathiudeen was discussing with his officials in Colombo about the sixth meeting of the SAFTA Ministerial Council that is now in progress in Islamabad, Pakistan. A special team representing the Department of Commerce of Sri Lanka has already left for Islamabad on Sunday 12. Minister Bathiudeen is also scheduled to join the ministerial level meetiings in Islamabad starting midweek and lead the Sri Lanka team in signing of the approved SAFTA minutes.

The sixth meeting of SAFTA Ministerial Council in Islamabad will discuss matters relating to the administration and implementation of the SAFTA agreement and also aspects relating to trade in services under SAFTA framework.

The SAFTA Agreement was signed on January 6, 2004 during the Twelfth SAARC Summit held in Islamabad, Pakistan.

The agreement entered into force on January 1, 2006, and the Trade Liberalization Programme commenced from July 1, 2006. SAFTA regional trade was estimated at 5.5% of 2011 world trade.

Total exports in 2011 under SAFTA preferential tariff schemes stood at $ 1.5 billion.

According to an Asian Development Bank (ADB) study, SAFTA trade could be strengthened to US $ 85 billion from the current level of $ 10 billion.

Calculations by independent analysts in April 2010, based on data from the IMF statistical trends of 1996-2008 indicated that Sri Lanka’s total projected exports to SAARC region will top US $ 1005.95 million in 2015. By 2015 total Intra-SAARC exports are expected to cross US $ 17500 million mark.

“SAFTA has created a better framework and institutional mechanism for increased intra-regional trade. Sri Lanka’s growing economy, under the leadership of President Mahinda Rajapaksa, will stand to benefit from steps towards liberalisation of SAFTA trade just like other consumers in South Asia” Minister Bathiudeen added.

According to Institute of Policy Studies, Executive Director Dr Saman Kelegama SAFTA liberalisation will be of benefit to the SAARC region. “Further liberalisation under SAFTA will help regional consumers greatly, in the form of low cost products and services,” Dr Kelegama said.

“Also, SAFTA needs to work towards liberalisation of intra-regional investment flows so that in turn, trade will be stimulated,” Dr Kelegama added.