Eighth EU-SL investor dialogue consolidates economic relations, resolves important matters
The eighth EU-Sri Lanka investor dialogue was held at the Development Strategies and International Trade Ministry recently. Many of the earlier outstanding matters had been resolved through dialogue and the joint efforts of the Sri Lanka and European Union (EU) authorities.
Development Strategies and International Trade Minister Malik Samarawickrama, who chaired sessions and led the Sri Lanka delegation, stated, “We are making an effort on our side to clear all issues. I wish to thank the ambassadors for their support and co-operation. I am very pleased that we have made considerable progress in resolving the outstanding issues and building up our relations with the EU on a solid foundation.”
The minister added Sri Lanka has a new budget that is very liberal and that is also pro-trade and pro-investment.
“The budget includes many reforms that cover all segments of Sri Lanka’s population, including the lower income groups, public officials and armed forces. It is a good budget. I wish to thank the ambassadors present for all their support.”
EU Ambassador Tun Lai Margue replied, “We are very pleased to meet again and I agree with the minister that we have managed to resolve many of the issues that existed between Sri Lanka and the EU.
Among the matters discussed was the need to always ensure transparency when it comes to tendering procedures. In addition, we would like to see a more liberal approach with regards to the shipping sector. This is important in the light of Sri Lanka’s effort to become a major shipping hub.”
Samaraweera informed the EU delegation that Sri Lanka was looking at liberalizing the shipping sector. In the first stage, foreigners will be permitted to own 60 percent of the shipping companies. This was very important to build up confidence in the EU for Sri Lanka. It is also a factor that impacts significantly on the attraction of FDI inflows to a country.”
Samarawickrama was assisted by Development Strategies and International Trade Deputy Minister Nalin Bandara, Development Strategies and International Trade Ministry Secretary S.T. Kodikara, Board of Investment (BOI) Director General Champika Malalgoda, Export Development Board Director General Indira Malwatte and Ministry Technical Advisor Mangala Yapa.
The Sri Lankan institutions present were the BOI, Public Finance Department, Digital Infrastructure Ministry, Sri Lanka Customs, Health Ministry, Ports and Shipping Ministry, Civil Aviation Authority of Sri Lanka, Inland Revenue Department, Fiscal Policy Department and Emigration and Immigration Department.
Margue was assisted by senior officials of the EU and their respective missions. A number of important decisions were taken at the dialogue.
It was decided by the minister that a high-level meeting with the EU side and the ports shipping, finance and international ministers and a representative of Maersk would discuss the bidding process for the East Terminal.
The EU would monitor the implementation of the decision by Sri Lanka to allow 60 percent ownership of shipping line in Sri Lanka. The question of VAT reimbursement for 2018 will be taken up with the Inland Revenue Department.
The Sri Lankan side will raise the issue of customs duties payment relating to blocked containers with the Finance Ministry.
Other areas of agreement covered the payment of dues, effect of noise pollution, VAT on imports for exports and fast track facility accorded to a company.
At a macroeconomic and strategic level, the EU represents an important source of investment for Sri Lanka.
In the period 2005-2016, the EU enterprises operating under the BOI invested an estimated US $ 2.5 billion in Sri Lanka.
The bulk sectors for investment were manufacturing (other than textile and apparel) valued at US $ 557 million, textile and apparel manufacture (US $ 327 million), telecommunications (US $ 617 million), airline services (US $ 325 million) and power generation (US $ 255 million).
The leading EU countries in terms of FDI to Sri Lanka are the United Kingdom with 90 projects under the BOI (of which 54 exporters), Germany (42 projects, 31 exporters), the Netherlands (29 projects, 14 exporters), Sweden (20 projects, 13 exporters) Italy (18 projects, 14 exporters, France (13 projects, 10 exporters) and Belgium (10 projects of which six exporters).
The EU-Sri Lanka dialogue is therefore a vital forum that offers considerable opportunities for attracting European investment to Sri Lanka.