July 22, 2021
Good evening friends, and Asanka, congratulations on your appointment and to the rest of the Board as well. I appreciate the opportunity to address you for the third time at the Annual General Event. I’m sad to say this is probably going to be my last time as my successor has been nominated already but we do not yet have timing for my departure or her arrival. We still have procedural issues to go through in the United States so it’s somewhat difficult to pinpoint the terms of the timing.
I think you would agree that the past three years in Sri Lanka have been eventful, and eventful not just for Sri Lanka but for the world, frankly. Political turmoil, elections, a brutal terror attack and of course the ongoing pandemic. I believe throughout all of this time that the United States has really demonstrated the quality of its partnership, it’s relationship with Sri Lanka and the Sri Lankan people. We responded in times of need, we’ve been busy fostering deeper people to people linkages for business and study, and we view our engagement through a lens of mutual benefit with no one-sidedness to this relationship.
Building on the shared values and strategic interests and the abiding friendship between our people, my team and I have worked with many partners, the Sri Lanka-US Business Council among them, to increase Sri Lanka’s capacity to foster sustainable and inclusive economic growth, to counter terrorism and transnational crime and to promote the rule of law, transparency and democratic governance.
Let me just take a few moments to reflect on our economic accomplishments as well as the opportunities still before us.
First and foremost, one of my top priorities, as it’s going to be for my successor, is to increase opportunities for U.S. firms to engage in Sri Lanka, echoing some of the themes I raised earlier. And whether it’s to export goods or services, [inaudible] with government tenders or make investments and have joint ventures with partners here, we’re ready to be there.
And in the past three years the embassy has supported many high quality U.S. companies to pursue their commercial interests in sectors ranging from power generation and water management to locomotives, health care products and information technology. With an educated work force and a serendipitous location in the heart of the most economically dynamic region in the world, the level of interest from Sri Lankan investors in Sri Lanka has been recently halved, but I know and I think you know it could be much higher. Often this interest just doesn’t translate into real deals and we’d like to see more of that actually come to fruition.
U.S. foreign direct investment in Sri Lanka was $13 million in 2020, bringing U.S. cumulative investment in the country to $274 million. This number has remained disappointingly constant over the past five years, and frankly, disappointingly small. I feel like it could be bigger. It’s due primarily to concerns about consistency and transparency in government decision-making. Above all, investors really need visibility. So pro investment policies are welcome, but the playbook can’t be thrown out every time a new government comes to power. Politicians, government leaders and industry need to come together around a shared vision for Sri Lanka’s economic and political future and to implement a consistent strategy to realize this.
I think you actually share these concerns about policy consistency so I’m certainly not telling you anything that you don’t know, but that we’re willing and ready to collaborate to see more consistency going forward.
And I know progress is going to be possible. I’m encouraged by the recent framework agreement between the American firm New Fortress Energy and the government of Sri Lanka to negotiate a 40 percent stake in West Coast Energy, a renowned U.S. company investing in this country’s energy sector will send strong positive signals to the global investor community and bring much needed capital into the Sri Lankan economy.
Fostering sustainable and inclusive economic growth is my second priority, building on the first, the commercial ties. In my experience, Sri Lanka could facilitate a more inclusive approach to government, and I mean this in a very specific way – one that empowers the broader population to engage with government decision-makers during the policy development stage.
We talk about policy consistency, but also informed policy will really help. Policymaking becomes ad hoc, even capricious when it’s done without broad consultation. The public’s inclusion in the process and of course the public would include the business sector, enhances the credibility of government policy and creates buy-in for innovation, reforms, and new policy approaches.
Facilitating and managing the base to ensure broad public input is not an easy task but an important one in democracy and it also is one that can result in more equitable and broadly accepted policy decisions and I know the Business Council along with other Chambers does advocate with the government on policies and I hope there will be more opportunity going forward for some of these recommendations and suggestions to be accepted in the policymaking process.
The United States remains Sri Lanka’s largest single country export market so our contributions to Sri Lankan prosperity are in this regard unparalleled. We’ve also committed significant resources to the U.S. Development Finance Corporation, the U.S. Trade Development Agency, USAID and other agencies to promote infrastructure and human capital development in Sri Lanka and throughout the Indo-Pacific region.
Just this year the Development Finance Corporation, or DFC, committed $265 million in financing to private Sri Lankan banks to ensure small businesses could access the capital to grow their vision. This kind of financial assistance often contributes more to long term sustainable development than more high profile and economically dubious infrastructure projects. Importantly, this approach also puts Sri Lankans in the driver’s seat.
USAID programs support inclusive economic growth by working to strengthen vocational training, improve workforce capacity and build entrepreneurship skills among youth and women. Through these programs to date over 50,000 youth have benefited from career guidance and placement services. USAID is also committing resources to strengthen small and medium enterprises, especially women owned businesses in the informal sector. Those homes hard hit by recent economic shocks, so frankly, most essential to Sri Lanka’s economic recovery and to grow potential going forward.
In 2020 USAID programs supported the establishment of over 400 women-owned businesses. Even in this environment, 400 businesses got their start. The DFC loans will also target small and medium enterprises owned or led by Sri Lankan women, and by empowering women in business the funding will expand financial inclusivity, tackle gender inequality and increase support for women-led enterprises.
I think achieving inclusive economic growth is difficult at the best of times but it can be harder, of course, in the context of this unrelenting pandemic. Some good news I related earlier, but we know it’s still very difficult.
I know, you know, also that getting the Sri Lankan economy back on its feet after 18 months of pandemic induced losses means not just all these other policy reforms but frankly wrestling the virus to the ground. Just last week on Friday, July 16th, the United States delivered 1.5 million doses of Moderna vaccine from our own national reserve. On the same day we also handed over 500,000 rapid diagnostic tests to help the government here and the people to sustain testing capacity which can allow the economy to reopen more safely. And overall the United States has provided more than $8 million to Sri Lanka’s COVID-19 response and recovery. This includes portable ventilators, fingertip oximeters, and hundreds of thousands of medical grade masks, goggles, and other personal protective equipment.
We’re committed to helping Sri Lanka and the world overcome the destruction and death wrought by COVID-19. That’s why at the beginning of the pandemic the U.S. also worked with the World Health Organization and other international partners to establish COVAX, the global initiative providing equitable access to safe, effective and high quality COVID-19 vaccines. COVAX has already shipped over 121 million vaccines to 136 different countries including nearly two million doses to Sri Lanka, the 1.5 million contribution coming out of our national stockpile was channeled to Sri Lanka through the COVAX mechanism.
We also work with Gavi, a public/private partnership that has vaccinated over 760 million children since its inception in 2000. We work also with UNICEF which annually secures more than two billion vaccine doses for routine immunizations and outbreak response around the world, and they’ve been stepping up to distribute COVID vaccines in their destination countries. This combination of international cooperation, generosity and medical innovation is ensuring that countries that can’t afford to purchase lifesaving vaccines will still be able to vaccinate their citizens.
We understand that no one is safe from COVID-19 until everyone is safe from COVID-19.
Last, with regard to posturing inclusive and sustainable economic growth and perhaps the most important is our work with Sri Lanka to enact policies to strengthen its economy by avoiding non-transparent irresponsible government borrowing and to assist Sri Lanka with managing financial institutions and public finances consistent with international best practices.
It’s no secret that the Sri Lankan economy is facing serious challenges right now and impromptu measures to sustain reserves and assure Sri Lanka meets its sovereign commitments are understandable but a point is soon reached beyond which ad hoc measures will no longer work. This is why my government has recommended that Sri Lanka as a member country engage constructively with the IMF as early as possible. There are no easy answers to the challenges facing Sri Lanka, but there’s an opportunity to retool and build back better as our President Biden said.
We’re committed to providing technical assistance and expertise through our U.S. Treasury Department to facilitate discussions about the best path forward. And we can support international experts on a range of topics from procurement to environmental policies to best financial practices and beyond. Although I know there is considerable expertise on many of these topics also resident in Sri Lanka and we support many of those efforts providing their knowledge to the government.
We look forward to continuing our discussions on these and other priorities and on how we can work together to build a stronger Sri Lanka and a stronger relationship between our countries.
The United States remains committed to supporting a secure and prosperous Sri Lanka. We’ll always be a willing partner insofar as the government and the people of Sri Lanka remain committed to democratic values and norms we share. National reconciliation will require institutional framework to succeed and a reconciled Sri Lanka can overcome disunity and achieve broad-based equitable economic growth will emerge as a more developed, and more secure partner for the United States – and a fulcrum of peace and stability in the Indo-Pacific region and probably most importantly, a deliverer of prosperity and calm to the people of this beautiful island.
Sri Lanka really is a magnificent country with huge potential. So many positives and exciting opportunities that we can work on together. And I appreciate the partnership and the friendship that comes from the Sri Lanka-U.S. Business Council and look forward to taking advantage of these opportunities.