Treasury Secretary optimistic: GSP+ can be revived

To discuss unresolved issues with EU:

The effects of the suspension of the GSP+ facility by the European Union will not be felt in the next six months. The European Union has indicated its willingness to discuss unresolved issues to which the Government has responded positively, Finance Ministry Secretary Dr. P.B. Jayasundera told Daily News Business.

Finance Ministry Secretary Dr. P.B. Jayasundera. Pictures by Sudath Nishantha

There is still a possibility of reviving the GSP+ concession for the country. With the recovery in the global economy and improved economic outlook in Sri Lanka in the post-war environment the adjustment to the GSP+ withdrawal will not be difficult, he said.

The Finance Ministry

The apparel industry in Sri Lanka has gone through a similar challenge in the past when the US withdrew the Multi-Fiber Agreement in 2004/5 where the country faced tough competition from China, Vietnam, Indonesia and Bangladesh.
“However, the availability of the GSP+ facility will provide a comfort margin for post-war recovery in Sri Lanka and also strengthen longstanding bi-lateral relations between Sri Lankan and European Union countries,” Dr. Jayasundera said. Sri Lankan economy is likely to record 6 to 7 percent economic growth in 2010.
The growth has been around 6 percent from, 2005 until middle of 2008 when the global economy was confronted with a major economic crisis.
With the collapse of major export markets in the US and Europe Sri Lanka’s exports declined by 12 percent. There was also reduction in imports.
However, the economy managed to maintain positive growth throughout 2009 due to resilience in the domestic economy, Dr. Jayasundera said.
Economic growth in many countries including India and China fell sharply. Sri Lanka’s economy towards 2009 recorded 6 percent with a favourable agricultural outlook in paddy, tea, rubber, cinnamon, fish, livestock, fruits and vegetables.
It is anticipated that the agricultural sector would generate over 6 percent growth in 2010.
The recovery in global outlook and financial stability has also paved the way for over 6 percent growth in manufacturing and services sectors.
Improved performance in tourist arrivals, new demand for hotels and similar facilities would augur well for the economy. “The construction industry will also get a boost due to the Government’s public investment in roads and water supply for post-war reconstruction work in the North and the East,” he said.