Mar 18, 2019 (LBO) – The 8th EU-Sri Lanka investor dialogue was held at the Ministry of Development Strategies and International Trade and many outstanding matters were resolved through dialogue and the joint efforts of the two sides.
“I am very pleased that we have made considerable progress in resolving outstanding issues and building up our relations with the European Union on a solid foundation,” Malik Samarawickrama, minister of Development Strategies and International Trade who chaired sessions said.
He informed the EU delegation that Sri Lanka was looking at liberalizing the shipping sector.
‘In the first stage foreigners will be permitted to own 60 percent of the shipping companies. This was very important to build up confidence in the European Union for Sri Lanka. It is also a factor that impacts significantly on the attraction of FDI inflows to a country”.
The minister added that the new 2019 budget includes many reforms that cover all segments of the Sri Lanka’s population including the lower income groups, public officials, armed forces. It is a good budget.
H E Tun Lai Margue, Ambassador of the European Union replied “we are very pleased to meet again and I agree with the Minister that we have managed to resolve many of the issues that existed between Sri Lanka and European Union.
‘Among the matters which were discussed was the need to always ensure transparency when it comes to tendering procedures,’ he said.
‘In addition, we would like to see a more liberal approach with regards to the shipping sector. This is important in the light of Sri Lanka’s effort to become a major shipping hub.’
It was decided by the Minister that a high level meeting with the EU side and the Minister of Ports Shipping, Finance and International and representative of Maersk would discuss the bidding process for the East Terminal.
The EU would monitor the implementation of the decision by Sri Lanka to allow 60% ownership of shipping line in Sri Lanka. The question of VAT reimbursement for 2018 will be taken up with the Department of Inland Revenue.
The Sri Lankan side will raise the issue of customs duties payment relating to blocked containers with the Finance Ministry.
Other areas of agreements covered the payment of dues, the effect of noise pollution, VAT an imports for exports and the fast track facility accorded to a company.
At a macroeconomic and strategic level the European Union represents an important source of investment for Sri Lanka.
In the period 2005 – 2016, EU enterprises operating under BOI invested an estimated US$2.5 billion in Sri Lanka.
The bulk sectors for investment were manufacturing (other than textile and apparel) valued at US$ 557 million; textile and apparel manufacture (US$ 327 million); telecommunications (US$ 617 million): Airline services (US$ 325 million); and power generation (US$ 255 million).
The leading European Union countries in terms of FDI to Sri Lanka are the United Kingdom with 90 projects under BOI (of which 54 exporters), Germany (42 projects, 31 exporters), the Netherlands (29 projects, 14 exporters), Sweden (20 projects, 13 exporters) Italy (18 projects, 14 exporters, France (13 projects, 10 exporters) and Belgium (10 projects of which 6 exporters).
The EU-Sri Lanka dialogue is therefore a vital forum that offers considerable opportunities for attracting European investment to Sri Lanka.