April 23, 2019

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    Regional Collaboration key to unlock investment opportunities’

    January 23, 2019

    Regional Collaboration would unlock investment opportunities for domestic firms and would attract more investment from the rest of the region by creating more stable financial markets by opening up a wider range of funding sources, Central Bank Governor Indrajit Coomaraswamy said.“Clearly, India will play a very important role in promoting greater regional cooperation, while there are some changes which have been going on in India over the recent years which I think are conducive for greater regional cooperation,”

    Governor Coomaraswamy told the 15th South Asian Economic Students’ meet, organized by the Department of Economics, University of Colombo, and the World Bank.He said India as a rising global power with global conditions clearly has an interest for the stability in its neighbourhood and it doesn’t want to be disturbed by minor irritations in the neighbourhood while it pursues its global agenda.

    “We see, India’s neighbourhood choice policy is very much aligned with those objectives.” he said.He further said the South Asian region has had a challenging and troubled history, while the nation building process in other countries has created tensions for decades.“But we need to look at East Asia. You look at Japan, China and South Korea. Those countries too have had a very troubled history, but they have been able to rise above those tensions and be very pragmatic.

    Today, these countries make billions of dollars worth of trade among China, Japan, Korea and Japan. That troubled history has not held them back. Somehow, they have the capacity to be pragmatic.But, we tend to be far more emotional and allow it to get in the way of commercial opportunity. So I think we need to learn to look at what’s happening in East Asia.

    It is the young people who do not carry the negative baggage of troubled histories and they are able to create a new path which would reduce the unwarranted gap between potential and reality in our region. I believe young people have a special responsibility to take Sri Lanka on a much better journey, through the windscreen than the journey we see through the rearview mirror.”He said further with India’s Make in India Strategy and its ongoing liberalization process, the experience of East and Southeast Asia can be re-created in the region.

    “When Japan and China developed all the countries in East and Southeast Asia, they were able to plug into the supply chains of Japanese and Chinese companies and they all rose together. Now If the Make in India initiative gathers momentum, it will result in supply chains and cross-border production sharing networks.

    Clearly countries in the region may have new opportunities which they may not have in the past,” Governor Coomaraswamy said.

    Speaking on General State Tax (GST) in India, Governor Coomaraswamy said GST will also reduce transaction costs of doing business in India and exporting into India.

    “Another factor that I think will facilitate greater integration is the improvement of infrastructure around the region. In the past, due to poor infrastructure in all the countries in the region, the transaction costs of moving goods across borders were high,” he said.

    But, now with infrastructure developing across the region, the governor said those transaction costs are beginning to come down.

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