Sri Lanka government, under no circumstances will betray the country,no bow down to the internal or external pressures but will make every action to protect the integrity and sovereignty of the country.

Government spokesman Media and Information Minister Keheliya Rambukwella when asked about the government stance on the GSP plus facility explained that since the government has strengthened the Macro economic fundamental it could face the eventualities positively.“Presently we have a foreign exchange reserve of 6.2 Billion U.S.$ sufficient  to meet the import needs for more than six  months and we are optimistic of increasing it to around 7.5 Billion U.S.dollars at the end of the third quarter”. He expressed the confidence.

 He said that by March the government’s foreign exchange was sufficient to cover imports only for about 2 months and now it has reserves to cover for more than 6 months.  He added that with this huge reserves in hand the government could bring down the dollar exchange rate to about Rs. 105 but it maintains at the present level in order to help the exporters and this is one of the measures the government has implemented to help the exporters, encourage their production activities and make them competitive in the  international market.

Sri Lanka’s exports to EU countries constituted about 50 per cent of total apparel exports in 2009.  Of such exports, about 60 per cent benefited from the GSP+ scheme, while the balance was exported to the EU without the GSP+ concession.  On a net basis, the Central  Bank of Sri Lanka estimates the total value of the loses as a result of the withdrawal of the GSP Plus concession as euro 78 million.

EC has already announced that the GSP concession will be withdrawn effective from August 15, as a consequence,  the government, CBSL as well as many Sri Lankan exporters to the EU have already taken many measures to deal with this risk.

Some of these measures are highlighted below;

• Improving the Sri Lankan business environment and confidence levels significantly, by ending the conflict.
• Stabilizing and improving almost all macro-economic fundamentals,including in particular;
‐ Achieving a low level of inflation, thereby significantly reducing the pressure on cost of inputs;
‐ Establishing lower rates of interest, thereby substantially reducing the cost of borrowing;
‐ Building up foreign reserves to historically high levels, thereby enhancing investor confidence in the Sri Lankan economy;
‐ Ensuring stability in the Sri Lanka rupee exchange rate, thereby enhancing predictability of the domestic foreign exchange          market;
•  Establishing an enabling environment where Sri Lankan businesses could access international capital and debt markets for funding requirements at lower costs;
•  Achieving political stability in the country, thereby further improving confidence and reducing policy uncertainties;
• Obtaining the removal of Sri Lanka from the list of countries described a “high war risk” countries by underwriters;
• Improving internal work processes and systems of exporting entities,thereby leading to substantial productivity enhancements.