View from Colombo: Nation likely to be turned into a duty-free country

Under the envisaged programme Sri Lanka will soon be turned into a country which will promote trade and tourism, and not simply import trade, while concentrating on creating a manufacturing and export base in the country.

Though ambitious this seems to be the ultimate target of the United Front government which introduced numerous measures aimed at further liberalising the island's economy which was given boosted by the conducive atmosphere for business since the government signed a ceasefire agreement with Tamil rebels.

In fact Sri Lanka is one of the few developing countries in the world opted for open economy and free trade as early as 1977, long before the collapse of the former Soviet Union and its state controlled economy in 1990 which forced most developing countries to open up their economies changing the international economic scene.

Since then the island's economy started to boom with almost every sector recording a very high growth rate. Foreign investment started to flow in an unprecedented scale. The government too began implementing numerous ambitious development projects. So much so within few years Sri Lanka emerged as a country which started attracting the attention of many countries in the developing world.

Unfortunately for the island in the midst of this booming economy came the bloody July 1983 communal violence which dealt a crushing blow to the country's flourishing economy which remained stagnant in the following two decades.

In fact ever since the tragic events of 1983 the country's economy never reached the pre 1983 levels as foreign investors were reluctant to invest while the country's precious resources were wasted on fighting the war.

Yet the successive government's continued to follow open economy policy and offered attractive incentives to attract investors. The Peoples Alliance government which came to power in 1995 too offered many incentives to attract the private sector and even foreign direct investment.

But the on going ethnic war precluded people from putting out their money.

This environment changed following the February 2002 peace treaty between the government and the rebels with the private sector started investing in many sectors. This is more evident and visible in the construction sector. The recent $4.5 billion aid pledge by a consortium of countries also gave shot in the arm further boosting confidence in the economy.

It was in this atmosphere that the Trade and Commerce Minister Ravi Karunanayke disclosed the government's programme. to transform the island into a duty free haven promoting not only trade but also the island's great tourist potentials.

As part of this overall programme, the governmentplans to enter into Free Trade Agreements by the end of this year with Pakistan, Egypt, Brunei, Bangladesh, New Zealand Costa Rica followed by Singapore, Malaysia, Thailand and the US, further expanding its globalised trade base.

According to the minister the government will take every possible step to integrate Sri Lanka with rest of the world through globalised and multilateral trading while expanding and enhancing market opportunities in the region. In this regard he also assured the business community that he plans to visit many countries.

The writer is Sri Lanka-based journalist.