Trade agreements with India and Singapore will not lead to a major turnaround in FDI inflows to Sri Lanka, Institute of Policy Studies of Sri Lanka Deputy Director Dr.Dushni Weerakoon said.
Highlighting economic impacts of the proposed China - Sri Lanka Free Trade Agreement, Dr.Weerakoon noted that the FTA will have a different impact on Sri Lanka’s economy as under the China-Sri Lanka trade agreement model, state-backed investors follow the government while both governments play a major role in bringing those investors to Sri Lanka.
“In the case of India and Singapore agreements, the respective governments will leave it to the private sector to decide whether it is worth to bring FDI into Sri Lankan with potential trade agreements in place.
However it will depend on whether Sri Lanka has a convincing story to tell in terms of its labour pool, talents and infrastructure and so on.”
Noting that trade agreements play a vital role in opening up economy and the market penetration for local exporters, she claimed that a large number of agreements don’t open up sufficiently to attract foreign direct investments and raise exports.
Weerakoon revealed that Sri Lanka has been very hesitant to sign up to anything over the past several decades.”
While the country still has market access to a larger degree, we are not addressing supply constraints on the part of our domestic exporters in order to access those market penetrations,” Weerakoon said.
According to her most agreements are only addressing one aspect and much needed reforms are not linked to these trade agreements, as a result those kinds of agreements with certain deregulatory measures are not sufficient to raise the competitiveness and efficiency of export sector.
Add new comment