Improved ports, airports help Sri Lanka better use trade deals
ECONOMYNEXT – Improving transportation and logistics infrastructure will help Sri Lanka better use existing and planned free trade agreements with other countries, central bank governor Indrajit Coomaraswamy said,
Intra-regional trade within Asia was lower than elsewhere like North America and Europe but this was changing as more free trade deals were being negotiated, he told an international logistics foru in Colombo.
Now there are 20 free trade agreement in Asia which will enable manufacturers in the region to benefit from intra-regional trade, Coomaraswamy said.
These include Sri Lanka’s trade deal being negotiated with China and its existing FTA with India and Pakistan and the partnership agreement with Singapore.
“We have just begun work on a free trade agreement with Thailand and there are others in the pipeline,” Coomaraswamy said.
“Sri Lanka is beginning to take advantage of preferential trade agreements to increase the volume of regional trade,” he said.
With Asian manufacturers moving up the value chain there was a shift to less bulky exports and higher growth of air cargo volumes compared with ocean transport which all this time had been the dominant mode.
“Today customers expect faster services with lower cost at every layer of the supply chain,” Coomaraswamy told the EASTS 2019 forum held by the Eastern Asia Society for Transportation Studies and Sri Lanka Society of Transport and Logistics with over 400 foreign delegates.
Coomaraswamy said Sri Lanka had been a hub for trade in the Indian Ocean for millennia with Roman and Chinese coins being found in different parts of the island, a position it lost in the colonial period.
“Now we are beginning to rediscover our role as a hub in the Indian Ocean,” he said.
“Colombo is the most efficient port in the region and is being expanded with four container terminals with the East Terminal being built with Japanese and Indian investments.
The north terminal in Colombo is also to be built while Hambantota port in the south is being developed further with an industrial zone in the hinterland while eastern Trincomalee was being modernized under a master plant by Singapore’s Surbana Jurong.
Airports were also being developed with the main international airport at Katunayake being expanded and regional flights to India about to start from Palaly in the north.
“We have not been able to take advantage of our proximity to the big Indian market because transaction costs have been very high due to poor infrastructure,” Coomaraswamy said.
“Now on the infrastructure side we are beginning to see improvements. We should be able to leverage it.
”We are in a good time zone, with a wonderful location. As we build improved logistics infrastructure, this potential can be realized.”
(COLOMBO, 09 Sep, 2019)