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China can be a “big bully,” says top bureaucrat

A top bureaucrat this week insisted that the stalling of talks between Sri Lanka and China authorities was inevitable since giving in would hurt Colombo in the long run and cited Beijing as a “big bully” in this respect.

Export Development Board Chairperson Indira Malwatte in an interview with the Business Times on Thursday at her office in Colombo said that “They (China) will try to be a big bully as much as possible” in trying to get the deal on the Free Trade Agreement (FTA) between the two nations more favourable to them.

She explained, “Sri Lanka did not agree to the time period to reduce the import duties for 10-20 years since that could have affected Sri Lanka.”

Under the FTA if this is agreed upon it could affect the local industries in Sri Lanka, Ms. Malwatte noted adding that in this respect the government has plans to have a trade adjustment package.

This trade adjustment package would ensure that the local industries would be assisted so that they would not be affected by this type of trade deal but noted that this would take time.

The Chairperson insisted, “We cannot give in just because we are in debt,” adding that Sri Lanka currently owes China money as it has been involved in a number of key infrastructure projects in the country having built ports, roads and power stations.

On the other hand the trade agreement with India is moving, she said adding that “We have to look outside and take advantage of Asia’s growth.”

With the fast increasing middle income group in Asia countries like Sri Lanka need to take to bilateral arrangements with Asian states and in this context give confidence to exporters and buyers that we need the FTA.

Sri Lanka’s Asia focus has led to talks for trade with India, Pakistan, Singapore and negotiations are also underway with Thailand, Korea and Malaysia.

Moreover, with remittances reducing despite a slight increase last year, Ms. Malwatte explained that in a bid to service debts the country needs to do so through its revenues from exports.

“We have become a nation of consumption and not a manufacturing nation,” the chairperson stated adding that a conducive environment and political stability were crucial for the advancement of the economy.

In this respect, the National Export Strategy (NES) would help to reap the full benefits of exports and increase its earnings through diversified exports in boat building, wellness tourism, electrical and electronics, IT-BPM, spices and concentrates, processed food and beverages.

“I don’t think we have had such an extensive strategy policy done,” previously for exports with even the private sector being actively involved with the EDB, she explained.

Ms. Malwatte also explained that Sri Lanka needs to link up with the value chains of the world to become part of the total manufacturing product.

She insisted that the board requires a further boost by increasing the salaries of its staff in line with the private sector as it had once been in the past under the Ministerial leadership of the late Lalith Athulathmudali.

She also had issues about the bureaucracy in the public service noting “There has to be a process to any madness” adding that there had been about 50 appointments made since she assumed office that was possible by doing follow-ups; but insisted no ministerial interference was allowed into her department.