Semasinghe stresses urgent need to expand non-debt foreign exchange inflows

As Sri Lanka nears the end of its complex debt restructuring process, State Minister Shehan Semasinghe called on economic stakeholders to help lay the groundwork for recovery and growth. 

Highlighting the progress made in building fiscal and foreign exchange reserves over the past two years, Semasinghe emphasised the urgent need to increase non-debt foreign exchange inflows, particularly by boosting foreign direct investment, services, and most importantly trade. 

“Sri Lanka has long been isolated from regional and global value chains. The country’s renewed efforts in establishing comprehensive trading agreements with countries in the ASEAN region in particular is a step towards rectifying this weakness,” he said addressing the Ceylon Chamber Import Section AGM this week.

He acknowledged the necessity to create the legal and institutional framework to build the capacity for domestic firms to enhance competitiveness in the face of increased competition, and for Sri Lanka’s exporters to uplift their capacity to penetrate into new markets. 

Semasinghe pointed out that the Economic Transformation Bill seeks to address many of these requirements. That is by establishing the institutional framework to better support investment promotion and facilitation through the Economic Commission, productivity enhancement through the Productivity Commission, and the capacity to negotiate effective trade agreements through the Office for International Trade.

Sri Lanka is also revamping the policy architecture around trade. One such is the National Tariff Policy that was recently approved by the Cabinet of Ministers. The new policy seeks to strike a more appropriate balance between the interests of exporters, importers, consumers, and domestic producers. 

He also noted that the Trade National Single Window which has long been delayed is now getting the attention needed to play a constructive role in boosting trade and economic growth.