Sri Lanka can attract more foreign direct investment with the signing the FTA with Singapore said Minister of Development Strategies and International Trade Malik Samarawickrama. He was speaking at the Parliamentary Debate on the Sri Lanka Singapore Free Trade Agreement (SLSFTA).
“In just the past two and a half months since the agreement came into effect Sri Lanka has received a proposal from Singapore for investment amounting to more than 16.05 Billion Dollars in the pipeline for Oil, steel cement and other projects alone which will create thousands of more jobs for our people.”
“In 2017, Sri Lanka had a record year for foreign investment earnings of 15.15 Billion Dollars and this year I am confident it will rise further to 17.2 Billion Dollars to to around 2.5 Billion Dollars.”
“However, these are extremely low figures in comparison to some of the other Asian countries that I mentioned before. For example, annual exports in Singapore is 480 Billion dollars, in Taiwan it is 340 Billion dollars, in Thailand is 254 Billion dollars, in Vietnam it is 250 Billion dollars, and in Malaysia it is 230 billion dollars.”
“Even Bangladesh, a country that was a much later entrant to the international trade game, is now at 41 billion dollars. Foreign direct investment received by these countries were 77 billion dollars to Singapore, 12 billion dollars to Vietnam, 9 billion dollars to Taiwan, and 5 billion dollars to Thailand.”
And all these countries focused on FTAs, trade liberalisation and attracting foreign investment, to reach this level.
“More broadly, this FTA with Singapore has been very cleverly negotiated by us. Unlike other FTAs signed by Singapore with other countries where the level of liberalization is more than 90% of tariff lines, in the FTA with Sri Lanka, we limited it to 80%. So, 20% of tariff lines or 1,487 items, were kept protected because of a concern on domestic industries and revenue. Items like footwear, confectionery and many other sensitive items have been kept out of the agreement.”
“The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection.”
“We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff.”
“Therefore, 97.8% revenue from customs duty is protected. Our tariff liberalization will take place over a period of 12-15 years!”
In fact, the revenue earned through tariffs on goods imported from Singapore last year was 35 Billion rupees. The revenue loss for over the next fifteen years due to the FTA is only 733 Million rupees – which when annualized, on average, is just 51 Million rupees. That is just 0.14% per year!”
Under the Singapore FTA, there can be services workers only if they are part of a company here– so it is always linked to investment in Sri Lanka.
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