Sri Lanka should diversify its financial and economic strategy to include more foreign partners to reduce geopolitical risks, the Ambassador of the European Delegation to Sri Lanka said.
“If there are too many Chinese eggs in one basket, it can become a danger,” Tung-Lai Margue said at a recent forum organized by the European Chamber of Commerce in Sri Lanka.
“I’m saying this not from a diplomatic point of view but a common sense points of view,” he said, giving his personal opinion.
He said Sri Lanka is dependent on China to a great extent on loans, infrastructure and investments. India too is involved heavily, he said.
He said China’s Belt and Road Initiative is not viewed negatively by Europe and regions such as South Asia and South East Asia would stand to benefit from it.
“But it also depends on a lot of factors and governments need to remain vigilant,” he said.
Margue said Sri Lanka could balance risks out by enabling European foreign direct investments into export oriented industries.
“Something could be done and must be done to counterbalance that element and for European enterprises to enter into the market,” he said.
“We are your biggest export market but when we want to come here, invest and export, we are quite low.”
He said European businesses value stability, a better investment climate, transparency and less bureaucracy.
“Bureaucracy in general is always a burden,” he said.
“More bureaucracy means people are afraid to invest because it’s going to take time.”
“Then there’s the elephant in the room, corruption,” Margue said.
He said while the situation has improved recently, there is much room for improvement with stronger anti-corruption activities.
Margue said attractive tax incentives, more special economic zones and longer business visas would also attract European investments.