Let me also thank the Australian Government for sharing their success stories with Sri Lanka. Australia’s accomplishments in utilizing modern technology in an innovative manner in economic and trade fields provide us a proven path, I must say.
This conference is timely because we aspire on repositioning Sri Lanka as a major trading economy in the Indian Ocean. Sri Lanka has been since ancient times a trading hub and it is only in the recent past that was regressed to an inward focus. But today, under the Unity Government, we strive to transform that trajectory and return to our original self as a trading nation in one of the most important sea routes in the Indo Pacific Region.
We have taken the first steps towards this process of re-orientation of the economy as market access to over half a billion population in the European Union was regained through the reestablishment of GSP +.
The results are already showing as total exports in the first 8 months of 2017 have grown by 7.6%. Through the GSP+ facility, seafood exports recorded 82% increase, while the apparels grew by 12.2% in August this year.
We are negotiating three important trade agreements with India, China, and Singapore to gain further market access for our exports. When this process concludes in a fruitful manner, our exports will have duty free access 2.5 billion people in this region.
Tariff liberalization is only one part of the broader trade liberalization agenda. Today the major gains in trade liberalization are to be made in the process of trade facilitation by improving the efficiency of cross border transactions, and reducing the transaction costs of trade.
In order to realize Sri Lanka’s ambitions to become an Indian Ocean trading hub, it is essential that we streamline our trade processes to ensure efficiency, transparency, and integrity in a rule based environment.
With the support of our development partners, including Australia, Sri Lanka is in the process of implementing a National Single Window for trade facilitation, which would enable traders to fulfill all necessary procedures under one roof. This would make Sri Lanka a truly attractive destination for efficiency seeking export oriented FDI.
The future of trade facilitation is however in the application of modern technology. I am happy to note that there will be extensive sessions on Blockchain technology at this Conference. This technology has the potential to revolutionize trade finance by drastically cutting down the time taken for transactions, reduce the costs of intermediation, whilst ensuring security and process integrity.
Blockchain will no doubt disrupt traditional trade finance and can be a major boost for trade. Early movers will have a significant advantage – and I am confident that Sri Lanka’s financial sector is taking the message on board.
The implications of such technology go beyond private traders, and have important potential benefits for border agencies. Blockchain technology can enable Customs to audit supply chains in real time, trace the provenance of suspicious transactions, and identify problematic cargo in advance.
The application of cutting edge technology in our key institutions is a major focus of the Finance Ministry. We have this year commenced the implementation of RAMIS at the Inland Revenue Department which has already yielded good results in terms of revenue administration and collection efficiency.
We will look at similar applications at the Departments of Excise and Customs as well. Initial steps have been taken by enabling electronic payments at Customs and automated scanning technology. I am very keen to see Sri Lanka’s Customs step up its role as a trade facilitation agency, whilst of course ensuring a healthy contribution to our treasury coffers.
We are also taking stock of outdated and archaic legislations, including the Customs ordinance that was introduced in 1856, and the Excise Act of 1912, to enable those institutions to effectively function in the contemporary global trading environment.
I was also very pleased to note that the conference includes a session dedicated to the SME trading sector. For too long Sri Lanka’s exports have been dominated by corporate giants. We are in the process of empowering the SME sector, which we hope to see becoming the driver of export growth in the future. The Vision 2025 policy document envisages SMEs functioning in an enhanced digital ecosystem.
Since financial transaction risk is a major barrier to SME access to markets, Blockchain technology can go a long way towards improving SME export potential.
In addition to a trading hub, Sri Lanka also aims to be a financial hub, with the new Colombo International Financial Centre being positioned as a location for investment in cutting edge innovative finance.
This confluence of trade and finance makes Sri Lanka an ideal candidate to lead the way in terms of trade finance technology and other tech innovations for trade and logistics.
As I pointed out at the outset, this conference on “Tech for Trade” is indeed timely. In our first two years of government we focused on stabilizing the economy following a period of macroeconomic imbalance.
Now we are poised for growth – growth that is led by exports, facilitated by technology, and driven by SMEs, entrepreneurs, and startups. All of these elements are dealt with in this conference.
I would like to thank our development partners for continuing to support Sri Lanka in important endeavors of this nature. I wish you for successful deliberations at this two-day Conference.