Dr. Coomaraswamy said it however requires a holistic effort which addresses the full range of the challenges involved. Regional cooperation also resulted in diversified financial markets, particular for a small country with shallow and underdeveloped domestic financial markets which do not provide the required diversification in terms of products and investment opportunities.
Sharing his thoughts on how to promote regional integration, he said one should develop an accelerated time bound schedule for reducing and then eliminating tariff sensitive items except for a few products of exceptional concern.He noted that it is essential to establish a schedule for the elimination of para tariffs within a timeframe that is credible, taking into account the impact on government revenue and domestic producers. He said that the exercise can begin by accelerated removal of para tariffs on items not on sensitive lists.
“Also, there must be a multipronged approach to address non tariff barriers, information flows, trade facilitation measures, infrastructure development and the related issue of connectivity costs. This places with a high premium on careful management and implementation that should be clearly articulated national freight policy strategies which attach high priority to regional integration.” Dr. Coomaraswamy told at the 15th South Asian Economic Students’ Meet, jointly organized by the Faculty of Economics, University of Colombo and the World Bank in Colombo.
According to the Governor Coomaraswamy, there needs to be a holistic approach that covers calibrated trade liberalization, trade facilitation improvement in the ease of doing business, attracting FDI, improving links between education training and skills development on the one hand and the labour market on the other. Speaking furtherhe noted that negotiations are currently underway to expand the existing Indo Lanka FTA in goods, into an economic and technical cooperation agreement covering not only goods but also services investment technology and technology transfer.
“In addition, within Economic and Technology Co-operation Agreement (ETCA), it will be possible for Sri Lanka to take advantage of the proximity it has to the five southern states of India such as Undra Pradesh, Telangana, Karnataka, Tamil Nadu and Kerala. It is currently a US dollars 500 billion regional economy which lies 20 miles away across the Palk Strait.” he said. Sri Lanka also has a free trade agreement with Pakistan and priority is being attached to invigorating trade under the agreement.
And Sri Lanka is making its contribution to regional economic integration in South Asia by seeking to become a hub in the Indian Ocean.