Malik narrates Sri Lanka’s economic reorientation story to German industrialists

From left: Association of German Chambers of Commerce and Industry CEO Dr. Martin Wansleben hands over a token of appreciation to Development Strategies and International Trade Minister Malik Samarawickrama
Pic by Pradeep Pathirana

By Harshana Sellahewa
Development Strategies and International Trade Minister Malik Samarawickrama said that the government has taken numerous initiatives to stabilise and reorient the economy, from a growth model that was heavily dependent on debt-fuelled public spending, to one driven more by the private sector, trade and foreign direct investment (FDI).

“We have taken many measures to build strength and resilience in our economy,” Samarawickrama said at the official opening of the German Delegation of Chamber of Industries and Commerce in Sri Lanka.

“We are very focused on fiscal consolidation and the results are already visible – with the budget deficit improving and the international ratings agencies providing favourable outlooks.”

The minister further said that parliament had passed the new Inland Revenue Act, which is to be implemented in weeks to come. He said that the new act would render a modern, innovative and clear income tax policy. “The tax incentives regime is now firmly written into the law and is based on generous investment allowances.”

Samarawickrama said that Sri Lanka’s top rate of income tax is now lower than many countries in the region; on monetary policy, the Central Bank of Sri Lanka (CBSL) has moved towards a market-determined exchange rate regime and is proactively keeping inflation in check.

“We just passed a new Active Liability Management Act to ensure national debt is cleverly and credibly managed and last year we passed a new Foreign Exchange Act that brings a very contemporary and business-friendly approach to managing foreign exchange.”

The minister emphasised that across the government, the focus is set on reform initiatives to complement growth and create employment opportunities for locals and declared his commitment to improve the ease of doing business.

“By mid this year, the time taken to registering a new business will reduce from six days to just one day. Finding land and registering property will be halved from 51 days to 26 days and the procedures reduced from nine steps to two steps,” he said, affirming the commitment to ease of doing business.

“We are also introducing an ‘Electronic Single Window’ that will link together dozens of state agencies dealing with international trade. Through the new Colombo International Financial City and Port City projects, we are creating a unique business climate that is globally competitive and will provide an attractive operating environment like no other in the South Asian region. This new city will function like a special economic zone and have international laws and easier regulatory and legal systems,” he stated, saying that these initiatives were being complemented by comprehensive trade policy reforms.

Commenting on the government’s plan to expand market access and benefit Sri Lanka’s strategic location, the minister said that trade and investment links are being expanded to a diversity of countries, which includes the US, European Union, India, China, Singapore, Japan and more.

He stated that additionally, Sri Lanka will be signing a number of trade agreements. 

“In January, we just signed a landmark free trade agreement with Singapore, which goes beyond goods, to include services, investment, e-commerce, government procurement, telecommunications, financial services and economic cooperation.”

“We are close to concluding two more bilateral trade agreements – an Economic and Technology Cooperation Agreement with India and a Comprehensive FTA with China. This will be followed by FTAs with Thailand, Bangladesh and Malaysia. We also recently regained the GSP Plus trade concessions to the European Union, which gives duty free access on over 6,200 tariff lines.”