Speech by Hon. Malik Samarawickrama, Minister of Development Strategies and International Trade
Today is a remarkable occasion, where we welcome over 75 leading Japanese business leaders to Sri Lanka, at a time when our two countries are working to expand our trade and investment relationship.
It is a great pleasure to be here with you today.
Japan has been a steady and long-standing partner for Sri Lanka, in supporting infrastructure development, knowledge exchange, and technical cooperation. The Japanese are involved in many vital infrastructure projects – the Central Expressway, Light Rapid Transit, LNG and power plants, Colombo Port development, Trincomalee Port Development, and Kandy city development.
Sri Lanka and Japan have a trade and investment relationship dating back many decades. Our two countries entered into a ‘Bilateral Investment Promotion and Protection Treaty’ in 1982 and a ‘Double Tax Avoidance Agreement’ back in 1967.
In 2014, the Board of Investment of Sri Lanka signed MoUs with two of Japan’s most reputed banks – the Bank of Tokyo Mitsubishi and Mizuho Bank. Japanese investors have found success here in Sri Lanka – for example Dockyard in ship building and ship repair, Noritake in fine porcelain tableware, SBI Holdings in financial services, SG Holdings in international logistics, ITOCHU in food products, and Tokyo Cement.
And today with this visit of high-level business leaders like yourselves, it is an opportune time to take our partnership to new heights.
Under the leadership of President Sirisena and Prime Minister Wickremasinghe, our Government has taken numerous initiatives to re-orient the economy, and make Sri Lanka a respected and formidable player in the Asian region once again. Across the government we are focussing on reform initiatives to catalyse growth and create better jobs for our people.
The focus of the government is to shift the economic growth model from one that was heavily dependent on debt-fuelled public infrastructure spending, to growth driven more by private enterprises, exports, and foreign direct investment.
In this process, we are committed to improving the ease of doing business, and during 2018 you will begin to see results. By April this year, the time taken to registering a new business will reduce from 6 days to just 1 day. Finding land and registering property will be halved from 51 days to 26 days, and the procedures reduced from 9 steps to 2 steps. We are also focusing on easier international trade through an ‘Electronic Single Window’ that will link dozens of state agencies through a few clicks.
Attracting foreign investment is a key priority of the country right now, and this is where a lot of our policy initiatives are being undertaken.
The Board of Investment is now reorienting itself to become much more responsive to investors needs and it is headed by private sector leaders with a track record of international business expertise. The BOI now assures investors that new applications will receive a response within a week. Decisions are being taken quicker and more transparently than ever before.
These initiatives are being complemented by comprehensive trade policy reforms.
In the recent budget, protectionist para-tariffs on over 1,200 items were removed, with the rest slated for removal this year and next year. To leverage on our location and expand market access, we are signing a number of trade agreements with other countries.
We just signed one with Singapore few days ago during the visit of the Singaporean Prime Minister. This is our first comprehensive FTA covering goods, services, investment, e-commerce, government procurement, telecommunications and financial services. And we are proud to have done it with a country like Singapore that is regarded as one of the most open and liberalized economies. We recognize that expanding our trade relations with Asia is a vital part of Sri Lanka’s progress.
Next we will deepen our FTA with India towards a comprehensive economic and technology cooperation agreement, and we hope to finalise a FTA with China during this year. This will be followed by FTAs with Thailand and Malaysia. We also recently regained the GSP Plus trade concessions to the European Union and we already have an FTA with Pakistan.
For a Japanese business looking for a credible and comfortable springboard to South Asia and beyond, there is no better place than Sri Lanka. With our new FTAs, you will gain preferential market access to a market of nearly 3 billion people. We are probably one of the few countries in the world that can claim this!
With our excellent strategic location, we have also become attractive for Belt and Road projects from China. The new Port and the Logistics and Industrial Zone in the south of the country – in Hambantota – is being developed with Chinese investment and we expect a lot of investor interest in this. Three other industrial zones are also being setup this year, including one with the Rojana Corporation of Thailand. We invite Japanese firms to invest in these zones, and indeed we are willing to set up a dedicated industrial zone for export-oriented Japanese firms to do business here, and access the South Asian region and beyond.
We are also undertaking reforms to boost our export sectors. Next month we will launch a new ‘National Export Strategy’ with an eye on competitiveness and product diversification. The focus sectors range from high value and high quality food and beverages, to leisure boats, IT services, and electronic components. We are also seeking Japanese investors in sectors like medical devices, automotive parts, mineral based products, and logistics and hub operations.
We are keen to find Japanese partners in all of these sectors – Partners who can work closely with our private sector to reach global markets – And partners who can bring in Japanese know-how and technology to us. We have great admiration for the impressive technological advancements that Japan has made, and through our economic partnership I would like to see Sri Lanka benefit from that expertise.
In concluding, let me thank you for visiting our country and your interest in exploring business and investment opportunities here. We have a good opportunity to build on this, when His Excellency President Sirisena makes a state visit to Japan in March this year. Coinciding with his visit we hope to have an Investment Forum in Tokyo, and I hope I will see many of you there as well.
Let me reiterate that we are committed to forging ahead with the reforms to make Sri Lanka a more attractive place to do business. With the facilitation of our team at the Ministry, at the BOI, at the EDB and with our Chambers of Commerce, I am sure you will find plenty of productive opportunities in our country, and you will partner with us to create more and better jobs for our people and make Sri Lanka more prosperous.