Sunday Times (Sri Lanka)

Germany says import controls policy “detrimenta­l”

- By Sunimalee Dias

Sri Lanka’s import restrictio­ns will pose issues as its policy on open trade has become a cause for concern among European Union states.

Germany which also holds the EU Presidency and is a non- permanent member of the UN is of the view that Sri Lanka’s current trade restrictio­ns are “detrimenta­l” to Sri Lanka as it increases prices for consumers; and the country’s exporters are impacted since most value added products require imported items, German Ambassador Jorn Rohde said in an interview with the Business Times in Colombo.

Germany is a key partner of Sri Lanka as it continues to assist the country in increasing the vocational training through its popular German Tech colleges; in funding the SME sector; and engages in social cohesion and reconcilia­tion efforts.

“Sri Lanka is the only country in the world to impose extended restrictio­ns,” he said pointing out that just last month Vietnam had signed a Free Trade Agreement (FTA) with the EU.

In this respect he noted that if Sri Lanka wants to remain attractive for investment­s then they need to remain open.

“Trade is not a one-way street and the EU is the biggest trading partner of Sri Lanka,” Mr. Rohde said adding that “if you have a prolonged restrictio­n on imports then it will at some stage be a point of discussion at the World Trade Organisati­on (WTO).”

Under the current circumstan­ces “where do possible investors go?” he queried adding that Germany hopes Sri Lanka remains committed to an open trade regime.

Social and religious tension

Commenting on the concerns within the country in relation to the religious and ethnic concerns in terms of reconcilia­tion, he pointed out, “The Presidenti­al election results of last year show a clear division between communitie­s and religions where there was a clear majority support from the majority community and a clear minority support for the opponent.”

Mr. Rohde pointed out that he had been made aware of the concerns of the North and East where “since November land returns (back to their owners) have largely stopped.”

Following the end of the war there has been a return of certain lands held by the armed forces to the people to resume their livelihood­s.

Moreover, the task force establishe­d in the preservati­on of archaeolog­ical sites in the East has been criticised and Mr. Rohde had been informed by concerned parties by activities of the non inclusion of minorities in it who are a majority in the East.

President Gotabhaya Rajapakse appointed the Presidenti­al Task Force for Archaeolog­ical and Heritage Management in the East chaired by Defence Secretary Maj. Gen. (Rtd.) Kamal Gunaratne and comprising 11 members with no inclusion of Tamil or Muslims who form a majority in the Eastern province of the country.

“But because it was mentioned in the media and representa­tives of minority communitie­s I spoke to expressed clearly there is a problem” and in this respect “there is room for improvemen­t”, he pointed out.

Trading partners

In addition the ambassador explained that Sri Lanka should also consider India as a key market for trading.

“All over the globe your biggest trading partners are usually your neighbours. Only in South Asia the situation is different since for example Sri Lanka’s main export destinatio­ns are the geographic­ally faraway EU, US and UK. For this anomaly to change you must have an open trading policy and increased regional cooperatio­n. Neighbouri­ng India with its 1.2 billion people for example provides huge potential to be the natural market for Sri Lanka,” Mr. Rohde said.

The ambassador also expressed concern over the loans given by China adding that this had been discussed in Germany as well whether they are undercutti­ng in terms of prices and whether their loans are given based on accurate assessment­s carried out.

Germany has also been miffed by the government’s stance regarding tenders and raised the issue of transparen­cy and fairness. The ambassador made specific reference to the Kerawalapi­tiya LNG power plant tender which had faced a number of issues particular­ly a conflict of interest in the case of Lakdhanavi Ltd which is also the lowest bidder but not awarded since it was said to have quoted too low a price and due to conflict of interest.

Lakdhanavi is a subsidiary of LTL Holdings also a subsidiary of the Ceylon Electricit­y Board that uses German technology.

“But if they (tenders) are postponed or cancelled or shrouded” in controvers­y then there is a concern for Sri Lanka as he pointed out, “This results in low rankings in transparen­cy indexes and others which demotivate­s investors in doing business in Sri Lanka.”

“It is important to attract investors and to do so you need to open up,” the ambassador said.

Commenting on Sri Lanka’s logistics sector, he said that a key barrier to investment here is the 60- 40 per cent rule applied at the Colombo port whereas “in all neighbouri­ng countries no such barriers” exist.

Tourism partner Responding to the query on Sri Lanka’s non inclusion in the list of countries to travel to, he said that the list of 15 countries can be seen as a first step towards a return to normal and that the absence of a country on this EU positive list should therefore not be considered to as being blackliste­d. The list will be regularly updated to ensure that more countries can be brought in as soon as the situation allows with reciprocit­y with the country concerned.

The ambassador underlined his hope that - Germany being one of the major tourist source countries for Sri Lanka - tourism will recover as soon as the situation allows. In this regard he welcomed current plans by Sri Lankan Airlines to soon re-establish direct air links between the two countries again after it was stopped in 2016.

Mr. Rohde said Germany and the EU have a positive list of countries and noted this is not based on how countries fight the COVID-19 pandemic.

“We can’t repeat a repatriati­on process” as about 250,000 Germans were brought back home by tour operators, the Foreign Office charters and commercial flights, he explained.

In fact, the ambassador pointed out under the circumstan­ces however, Maldives is currently opening up adding that Germany maintains a policy of opening up to borders that reciprocat­e.

On trade, he said the EU is for an open trade system, and “we are in negotiatio­n always with other countries,” adding that GSP + is an unilateral trade tool and in this respect, adhering to labour standards is important; further the present Prevention of Terrorism Act ( PTA) does not conform to EU standards.

He pointed out that Sri Lanka has seen a 300 per cent increase in its fish exports to the EU and also textiles adding that tax free access is very “good advantage.” In 2010 Sri Lanka lost the GSP + concession­s as a result of its human rights violations raised by the EU but regained it in 2015. Now the apparel sector is facing a crisis due to a slump in orders.

EU itself is likely to see a slump of about 6-8 per cent of its economic growth due to the current COVID- 19 crisis that has taken a toll on the economies of the bloc.

Having completed a “wonderful four years” the ambassador leaves behind a word of caution insisting that governance is vital in terms of “enforcing rules, no impunity, providing services to your people and with a sustainabl­e tax system.”

EU has funded Sri Lanka’s COVID-19 crisis with a 22 million Euros and Germany contribute­s 20 per cent to the funds of the EU.

 ??  ??
 ??  ??
 ??  ?? Mr. Jorn Rohde
Mr. Jorn Rohde
 ??  ??

Newspapers in English

Newspapers from Sri Lanka