00:00 [Music]
00:07 

00:07 welcome to the advocate deep dive on the
00:10 

00:10 role of trade in economic recovery in
00:12 

00:12 sri lanka
00:14 

00:14 before we get started i'd like to note
00:16 

00:16 that we do have live language
00:19 

00:19 interpretation in sinhala and in tamil i
00:21 

00:21 think the instructions on how you can
00:24 

00:24 access the live language interpretation
00:26 

00:26 is on the screen now
00:32 

00:32 could we also have it shown in tamil
00:39 

00:39 thank you
00:42 

00:42 all right so um a few more comments
00:44 

00:44 before we officially kick off today's
00:47 

00:47 discussion um please keep your
00:48 

00:48 microphone switched off for the duration
00:50 

00:50 of the session um we'll be starting with
00:52 

00:52 a few introductory comments from dr
00:54 

00:54 sarat raja patilana
00:56 

00:56 before the panel discussion kicks off
00:59 

00:59 and we'll close with an audience q a uh
01:01 

01:01 we do want to hear from you uh hear your
01:03 

01:03 questions here hear your thoughts so
01:05 

01:05 please do send in your questions or
01:08 

01:08 comments um on the
01:10 

01:10 q a function on the chat on zoom uh you
01:13 

01:13 can also drop it in a comment on
01:15 

01:15 facebook
01:16 

01:16 and our team will collate those for for
01:19 

01:19 for us um our event is is live streamed
01:22 

01:22 today uh on several facebook pages um
01:25 

01:25 the morning the morning business sri
01:27 

01:27 lanka
01:28 

01:28 sri lanka students for liberty
01:30 

01:30 newshub dot lk english economy next
01:33 

01:33 echelon business news dot lk citizen dot
01:36 

01:36 okay other and economy and business sri
01:39 

01:39 lanka
01:41 

01:41 so now that all the housekeeping is out
01:43 

01:43 of the way um today's topic is an
01:46 

01:46 interesting one and judging by the
01:48 

01:48 newspapers a very important one while
01:50 

01:50 sri lanka is currently facing yet
01:53 

01:53 another wave of the corvid 19 pandemic
01:56 

01:56 which is having a very real human impact
01:58 

01:58 it is unfortunate that at this moment we
02:01 

02:01 must also be facing
02:02 

02:02 a rather difficult economic situation
02:07 

02:07 so now more than ever it is vital that
02:09 

02:09 we understand the role of trade and the
02:12 

02:12 opportunities it can present to sri
02:14 

02:14 lanka right now and also on what
02:16 

02:16 hopefully will be a road to recovery in
02:18 

02:18 the months ahead
02:20 

02:20 so without further ado
02:22 

02:22 today we have with us a panel of
02:25 

02:25 esteemed experts on this topic
02:27 

02:27 who have kindly agreed to join us today
02:30 

02:30 um
02:31 

02:31 we have with us uh we are honored to
02:33 

02:33 have with us his excellency dennis chyby
02:36 

02:36 the ambassador of the delegation of the
02:38 

02:38 european union to sri lanka and the
02:40 

02:40 maldives
02:42 

02:42 his excellency has previously served as
02:44 

02:44 the administrator for the eu's relations
02:46 

02:46 with india and the european commission
02:49 

02:49 and on the personal staff of the
02:50 

02:50 commissioner for budget and human
02:52 

02:52 resources crystalina georgiova the
02:54 

02:54 current the present managing director of
02:56 

02:56 the imf
02:58 

02:58 uh
02:59 

02:59 dr sarat raja patirana is the chair of
03:01 

03:01 the academic program at the advocate
03:03 

03:03 institute he has worked at leading
03:05 

03:05 international organizations such as the
03:07 

03:07 world bank the wto the international
03:10 

03:10 trade center in geneva and the
03:12 

03:12 international cooperative alliance in
03:13 

03:13 latin america he's also the vice
03:15 

03:15 president of the sri lanka economists
03:18 

03:18 association
03:19 

03:19 professor premachandra atacorolla is a
03:22 

03:22 professor of economics at the arden
03:24 

03:24 garden department of economics college
03:26 

03:26 of asia and the pacific at the
03:27 

03:27 australian national university he is a
03:29 

03:29 fellow of the academy of the social
03:31 

03:31 sciences in australia and an honor and
03:34 

03:34 an honorary professor professorial
03:36 

03:36 research fellow at the university of
03:38 

03:38 manchester he is also an advisor to the
03:40 

03:40 advocate institute
03:42 

03:42 uh last but definitely not least dr dale
03:44 

03:44 rasmusselva is an international trade
03:46 

03:46 economist with over 30 years of
03:48 

03:48 experience in the field he has served as
03:50 

03:50 the national project coordinator of of
03:53 

03:53 the international trade center in sri
03:54 

03:54 lanka he is the former senior economic
03:57 

03:57 affairs officer at the u.n economic and
03:60 

03:60 social commission for asia and the
04:01 

04:01 pacific and he is also the former sri
04:04 

04:04 lankan ambassador to the wto
04:06 

04:06 um to all our panelists thank you so
04:08 

04:08 much for joining us today we are honored
04:10 

04:10 and we are quite excited for uh for the
04:13 

04:13 discussion uh so without further ado i'd
04:16 

04:16 like to invite our panelists to um turn
04:18 

04:18 their cameras on if possible and i would
04:21 

04:21 like to pass the virtual mic on to dr
04:23 

04:23 sarath rajapatirana to make some
04:25 

04:25 introductory comments
04:41 

04:41 video um
04:43 

04:43 we can hear you down now
04:45 

04:45 yeah okay
04:46 

04:46 so
04:47 

04:47 shall we start then
04:49 

04:49 sure let's go ahead yeah now okay thank
04:52 

04:52 you very much on anita for
04:55 

04:55 moderating this uh
04:58 

04:58 discussion
04:59 

04:59 uh so i thought we'll have a few more
05:03 

05:03 in the introduction
05:05 

05:05 few more things about what we are going
05:07 

05:07 to talk about today
05:10 

05:10 as anisa mentioned this is a very
05:12 

05:12 important subject matter for us for this
05:14 

05:14 country that is the relationship between
05:17 

05:17 international trade
05:19 

05:19 and the economic
05:21 

05:21 development and growth of sri lanka
05:25 

05:25 and
05:27 

05:27 we see that trade will have a very
05:29 

05:29 important role to pray
05:32 

05:32 given that we have been
05:35 

05:35 before even started we were already on
05:37 

05:37 downtrend
05:39 

05:39 we could not maintain the very high
05:41 

05:41 uh gdp growth rate we achieved in 2010
05:44 

05:44 after the end of the
05:47 

05:47 war with ltd
05:49 

05:49 and although it was i think one of the
05:50 

05:50 highest recorded then it fishes off and
05:53 

05:53 then in 2020 because of cory it went
05:57 

05:57 down to minus 3.6 percent
06:00 

06:00 decline in evp
06:03 

06:03 and so we are now battling
06:05 

06:05 uh
06:07 

06:07 we are i think taking some control of
06:09 

06:09 the
06:10 

06:10 the pandemic
06:13 

06:13 some 31 of our population now
06:16 

06:16 uh vaccinated
06:19 

06:19 and still the
06:21 

06:21 the
06:22 

06:22 important part of getting
06:24 

06:24 economic recovery is uh
06:28 

06:28 equally important
06:30 

06:30 in a way
06:32 

06:32 corvids and other
06:34 

06:34 epidemics have a
06:35 

06:35 lifetime you know like being
06:38 

06:38 but if you have the economy neglected
06:40 

06:40 that can
06:41 

06:41 last for even a longer time so that's
06:44 

06:44 very important that we
06:46 

06:46 start
06:47 

06:47 on uh reforms that we have been we have
06:50 

06:50 neglected frankly for the last i would
06:52 

06:52 say
06:53 

06:53 and people will disagree with what i'm
06:54 

06:54 going to say about 20 years
06:56 

06:56 we have not made any substantial reforms
06:59 

06:59 to our economy particularly on the trade
07:01 

07:01 side and so therefore we cannot think
07:04 

07:04 about economic recovery
07:06 

07:06 without really starting
07:09 

07:09 with the trade reform actually if you
07:11 

07:11 look at the world how they
07:13 

07:13 starting reforms trade is a very
07:16 

07:16 somewhat favorite to start with because
07:18 

07:18 it's very clear
07:19 

07:19 thing to do
07:21 

07:21 with tariffs and
07:23 

07:23 other variations other
07:25 

07:25 barriers to trade particularly
07:27 

07:27 quantitative barriers but very important
07:30 

07:30 about what to reduce the tariffs
07:33 

07:33 so we uh we have in our uh
07:37 

07:37 looking forward we have to do uh quite a
07:41 

07:41 good job
07:42 

07:42 of
07:43 

07:43 starting our growth engine mostly by
07:46 

07:46 starting starting the trade side
07:50 

07:50 uh because trade side has
07:52 

07:52 a very important part of getting uh
07:55 

07:55 exposing the continued
07:56 

07:56 competition and with that the other
07:59 

07:59 areas like uh what we are going to do
08:02 

08:02 with the fish call side
08:03 

08:03 about the budget
08:05 

08:05 uh and brahminy side about having
08:08 

08:08 proper monetary policy that avoids
08:10 

08:10 inflation and
08:13 

08:13 that is able to
08:16 

08:16 lead to contributing more stable
08:19 

08:19 exchange rate
08:20 

08:20 uh
08:21 

08:21 outcome
08:23 

08:23 so at patakaya is particularly
08:26 

08:26 [Music]
08:27 

08:27 focused on this issue
08:29 

08:29 i think there are others also interested
08:31 

08:31 in this issue
08:33 

08:33 we we are particularly looking at today
08:35 

08:35 on the trade side
08:37 

08:37 already in our earlier work on the
08:40 

08:40 [Music]
08:48 

08:48 side
08:50 

08:50 and so this is really if you like video
08:52 

08:52 com it's a continuation more focused on
08:55 

08:55 policy as such what should we do
08:58 

08:58 going forward that that is the issue we
09:00 

09:00 are going to uh
09:02 

09:02 address
09:03 

09:03 and so there are we are putting two
09:05 

09:05 things together
09:06 

09:06 one is the uh the economic the
09:09 

09:09 the dynamics of international incentives
09:12 

09:12 growth economic growth
09:14 

09:14 and what uh trade can do to support it
09:17 

09:17 and to get it going
09:19 

09:19 and before i thought about really
09:21 

09:21 launching to trade said that's a little
09:22 

09:22 background on the
09:24 

09:24 growth side as i said we began to say uh
09:27 

09:27 growth has sort of faltered
09:30 

09:30 uh
09:30 

09:30 went to minus 3.6 that's of course uh
09:34 

09:34 mostly due to foreign
09:36 

09:36 but our decline uh
09:39 

09:39 trade
09:40 

09:40 i mean vdb growth rate began to decline
09:42 

09:42 before
09:44 

09:44 before
09:45 

09:45 so kohit only exacerbated the situation
09:47 

09:47 that was coming on and then we can ask
09:50 

09:50 the question why did it happen
09:52 

09:52 that happened because
09:53 

09:53 we didn't pay
09:55 

09:55 enough attention to the incentive
09:58 

09:58 reforms in in a very long time we
10:02 

10:02 as a country did very well in the 1970s
10:05 

10:05 particularly 77 onwards
10:08 

10:08 then we had the
10:09 

10:09 war starting in 83.
10:11 

10:11 uh then more recently there are problems
10:14 

10:14 in 2018 with some political kabuki
10:18 

10:18 political problems with your police and
10:20 

10:20 government this year today we have
10:23 

10:23 not a coalition government a good
10:26 

10:26 well-integrated
10:28 

10:28 government
10:31 

10:31 and uh
10:33 

10:33 we have they have very more than two
10:36 

10:36 they have two third majority so they are
10:38 

10:38 in a really uh good driving shape in
10:41 

10:41 order to undertake the reforms if we can
10:44 

10:44 convince them they are convinced that
10:46 

10:46 actually it's a synagogue to get growth
10:49 

10:49 going to address the issue of trade
10:52 

10:52 so so that is the sort of main
10:54 

10:54 theme that we be devoting our time to
10:57 

10:57 and now i go more directly to the trade
10:60 

10:60 situation
11:02 

11:02 uh
11:02 

11:02 [Music]
11:03 

11:03 we our trade regime meaning the uh
11:08 

11:08 exports imports and the rules that
11:10 

11:10 govern trade
11:13 

11:13 are
11:14 

11:14 need a lot of work
11:16 

11:16 uh for example we are right away we have
11:19 

11:19 our exports uh one third of our
11:22 

11:22 imports or imports are three times the
11:24 

11:24 size of exports
11:25 

11:25 uh so we have a continuing
11:29 

11:29 trade deficit
11:31 

11:31 it's also accompanied by uh current
11:34 

11:34 controversy
11:35 

11:35 these things have to be addressed
11:38 

11:38 when we are talking about trade reform
11:39 

11:39 you have to have to have macro economic
11:41 

11:41 support for it which comes from
11:44 

11:44 uh
11:45 

11:45 monetary policy and
11:47 

11:47 fiscal policy
11:49 

11:49 and so because without that do you don't
11:52 

11:52 have the sort of dynamic stability that
11:53 

11:53 you need
11:54 

11:54 in order to put into place a good reform
11:58 

11:58 program at which i think it is quite
11:60 

12:00 essential to do that and so the question
12:02 

12:02 is the easiest place to start is think
12:05 

12:05 about what are we going to do about the
12:08 

12:08 ratio of protection of imports what is
12:11 

12:11 the what are the measures that are going
12:13 

12:13 to
12:14 

12:14 encourage or get
12:16 

12:16 reach higher growth rate
12:18 

12:18 in exports so that is really the basic
12:21 

12:21 uh
12:22 

12:22 issue that we have to face uh what is
12:25 

12:25 very interesting
12:27 

12:27 here
12:28 

12:28 is that more than the sort of the
12:30 

12:30 aggregates of uh important exports
12:34 

12:34 is the inducement to uh
12:38 

12:38 is the sort of feeling for our
12:40 

12:40 encouragement to
12:41 

12:41 uh
12:43 

12:43 productivity from having free to open
12:45 

12:45 trade or
12:47 

12:47 non-regul
12:48 

12:48 non-restricted trade
12:50 

12:50 economic empirical evidence on freelance
12:52 

12:52 either shows that it has a very uh
12:55 

12:55 strong
12:56 

12:56 effect on the on
12:59 

12:59 productivity and product itself is very
13:01 

13:01 important linked to the growth rate
13:03 

13:03 because
13:04 

13:04 if for example our growth were not based
13:07 

13:07 on productivity but on
13:09 

13:09 inclusion increasing capital and labor
13:11 

13:11 and other factors land and all that it
13:14 

13:14 will only sustain
13:15 

13:15 it so it's a one cent for all so you you
13:18 

13:18 need to keep on
13:20 

13:20 if you don't have a
13:23 

13:23 strong
13:24 

13:24 growth in productivity you have to keep
13:26 

13:26 on increasing factors of production
13:28 

13:28 it's very difficult because you have to
13:30 

13:30 have more savings that means less
13:32 

13:32 consumption so the best way to get it
13:35 

13:35 done
13:35 

13:35 is to really have a system in which
13:38 

13:38 our reforms are going to immediately are
13:42 

13:42 going to affect in the positive side of
13:45 

13:45 our
13:46 

13:46 productivity growth and we can always
13:48 

13:48 use the word total factor property worth
13:50 

13:50 including
13:52 

13:52 all the characters with three or four
13:53 

13:53 factors together of its
13:56 

13:56 impacts on the growth rate a lot of good
13:58 

13:58 people have looked into it and
14:01 

14:01 and said maybe two three very important
14:03 

14:03 things
14:04 

14:04 that you cannot sustain growth
14:06 

14:06 uh without time productivity
14:08 

14:08 one so is that even if you have high
14:11 

14:11 growth rate as we
14:12 

14:12 show in 2009 at the end of this thing it
14:15 

14:15 will be sustained because it's not based
14:17 

14:17 on uh
14:18 

14:18 control activity
14:20 

14:20 and also uh
14:25 

14:25 but what what leads to productivity
14:28 

14:28 growth by the open economy
14:30 

14:30 not only on the trade side but say for
14:32 

14:32 for indirect investment which is lagging
14:35 

14:35 in our setup in countries that have been
14:38 

14:38 growing very fast it's no accident like
14:40 

14:40 vietnam
14:42 

14:42 uh
14:42 

14:42 bangladesh
14:44 

14:44 [Music]
14:46 

14:46 cambodia thailand have been growing fast
14:49 

14:49 because their productivity have been
14:51 

14:51 growing so in other words they have to
14:52 

14:52 keep on they did not agree on placing in
14:55 

14:55 most savings
14:56 

14:56 in order to increase the rate of
14:58 

14:58 investment alone so investment on one
14:60 

14:60 side and productive downside together
15:03 

15:03 are the sort of the necessary uh support
15:06 

15:06 that you get
15:07 

15:07 growth doing so similar situation
15:09 

15:09 directly applies to us these ingredients
15:12 

15:12 have to be present in our case also an
15:14 

15:14 actual research by billy sally and our
15:16 

15:16 chanter
15:17 

15:17 devarajan has shown that in most cases
15:21 

15:21 or the majority of the countries that
15:22 

15:22 they have looked
15:23 

15:23 high growth has been associated with
15:26 

15:26 high productivity growth
15:28 

15:28 and and so if the economy has been
15:30 

15:30 lagging behind most of the time it is
15:32 

15:32 due to the fact that productivity growth
15:34 

15:34 has not really started or there not be
15:37 

15:37 enough environment to do it
15:40 

15:40 so what are the things that we can do to
15:42 

15:42 help our recovery
15:44 

15:44 one thing is to lower our target state
15:46 

15:46 no protection
15:48 

15:48 we have high protection compared to our
15:50 

15:50 neighbors compared to our competitors
15:53 

15:53 they are something like if you if you
15:55 

15:55 take into account
15:57 

15:57 that is put on existing tariffs uh
15:60 

15:60 during the war period in order to
16:02 

16:02 finance the war because we didn't have
16:04 

16:04 ways of raising revenue in order to
16:07 

16:07 afford to conduct the war in order to
16:09 

16:09 defend if you like or attack whatever
16:12 

16:12 what is in there for a war
16:14 

16:14 um so we still continue so we have today
16:17 

16:17 53 percent
16:18 

16:18 of our
16:20 

16:20 average 35 50 parents when you take into
16:23 

16:23 account paradise so all the all the
16:26 

16:26 necessity for paratha is now not there
16:29 

16:29 because fortunately we don't have a war
16:32 

16:32 and so uh
16:34 

16:34 but still it continues so it's a sort of
16:36 

16:36 a
16:37 

16:37 it it hurts our competitiveness our
16:39 

16:39 ability to for our exports to uh grow
16:42 

16:42 faster and for for our import
16:45 

16:45 substitution to be more widespread and
16:47 

16:47 more recent so it's it's one of the
16:50 

16:50 fundamental things we have to do reduce
16:53 

16:53 the fatal rate of protection the country
16:55 

16:55 that have grown very fast that we have
16:58 

16:58 from the east asian experience is that
17:00 

17:00 they uh
17:01 

17:01 they
17:02 

17:02 they
17:04 

17:04 they reduced their tariffs and they
17:06 

17:06 because they had an earlier period of
17:08 

17:08 protection when they saw what is
17:10 

17:10 happening in the rest of the world and
17:12 

17:12 when the countries in asia show the
17:15 

17:15 importance of
17:16 

17:16 the
17:17 

17:17 trade reforms in the country that are
17:19 

17:19 growing very fast
17:21 

17:21 in the case of thailand
17:23 

17:23 singapore
17:26 

17:26 hong kong
17:29 

17:29 and so
17:31 

17:31 we
17:31 

17:31 we learned from that 65 year 70 period a
17:35 

17:35 good lesson
17:36 

17:36 um
17:37 

17:37 so we would say
17:39 

17:39 uh
17:41 

17:41 reduce our time get first get rid of the
17:43 

17:43 karat arrays actually it's easy to do it
17:47 

17:47 can be do by uh
17:49 

17:49 by just putting the regulation in
17:52 

17:52 get get rid of it actually do it fast
17:55 

17:55 and so that you are sending a message
17:57 

17:57 also they are very serious
17:59 

17:59 so don't some people have argued that i
18:01 

18:01 have been in such meetings yeah let's do
18:04 

18:04 or five years no five if you're going to
18:05 

18:05 do five years you are particularly in
18:08 

18:08 the case of karate you are signaling
18:10 

18:10 that you are not you know you want to go
18:12 

18:12 slow no you have to really do a
18:16 

18:16 medium you can get the message
18:18 

18:18 by very strong reform with very strong
18:21 

18:21 action uh on
18:23 

18:23 on on on para tariffs
18:25 

18:25 then uh very simple other things that uh
18:28 

18:28 some people favor and i am one of them
18:30 

18:30 is a single uniform that
18:34 

18:34 you know which country they have been
18:35 

18:35 having very good successful single
18:37 

18:37 incorrect the
18:38 

18:38 current russia 17
18:41 

18:41 uh uniform values so the
18:44 

18:44 very easy to administer such a system
18:47 

18:47 and there are no distortions in the
18:48 

18:48 sorry system uh effective rates of
18:51 

18:51 production also
18:53 

18:53 in easy to predict in such a situation
18:56 

18:56 so as a sort of a
19:01 

19:01 suggestion
19:02 

19:02 is it possible that we could do
19:04 

19:04 a uniform carry
19:07 

19:07 and our targets might be lower than
19:10 

19:10 our competitors because we have been
19:12 

19:12 dropped off competition because we have
19:14 

19:14 maintained the high uh high
19:16 

19:16 protectionist regime all this time
19:19 

19:19 although we were struggling to do it
19:21 

19:21 after chile actually did in 1974 did in
19:24 

19:24 1977
19:26 

19:26 then as i saw more housekeeping things
19:28 

19:28 eliminate specific tariffs you know
19:30 

19:30 make it already based on valley it's
19:33 

19:33 easy to do easy to administrate
19:35 

19:35 administer it and easy to see what is
19:37 

19:37 the
19:38 

19:38 the results of it
19:40 

19:40 and make tariffs the only form of
19:42 

19:42 protection
19:43 

19:43 because if you introduce your
19:44 

19:44 quantitative restriction as we had in
19:46 

19:46 the past then it's going to be a problem
19:48 

19:48 so one of the big problems is that it
19:50 

19:50 can lead to a sort of a tariff regime
19:53 

19:53 that is very difficult to predict
19:55 

19:55 uh
19:56 

19:56 as is the work of bhagavati and
19:57 

19:57 anthroposos
19:59 

19:59 there is a chaotic system of uh
20:02 

20:02 directivity
20:03 

20:03 of protection in
20:05 

20:05 saturn so it is not a bad idea
20:09 

20:09 my suggestion is to have a
20:13 

20:13 uniform study
20:15 

20:15 and for 15 percent which we can reduce
20:17 

20:17 over
20:19 

20:19 time as our economy
20:21 

20:21 takes off has been kodi is ending
20:25 

20:25 and and the government permits itself a
20:27 

20:27 good reform program because we can
20:29 

20:29 signaling not only our countrymen but
20:33 

20:33 our actually creditors and ruby creators
20:35 

20:35 that we are pretty serious of what we
20:37 

20:37 are going to do and we are trying our
20:40 

20:40 best to get the growth rate running and
20:42 

20:42 we need a growth rate you know back for
20:44 

20:44 the analog calculation growth rate
20:47 

20:47 that
20:49 

20:49 that is higher than the average
20:52 

20:52 rate of interest that we pay on order
20:54 

20:54 that's really simple
20:56 

20:56 uh
20:57 

20:57 first-year
20:58 

20:58 macro
20:60 

20:60 so
21:01 

21:01 so that is my suggestion you can later
21:04 

21:04 have a discussion on it as you proceed
21:06 

21:06 and thank you very much sanita
21:08 

21:08 and
21:10 

21:10 thank you dr rajpath
21:12 

21:12 for those introductory remarks uh before
21:14 

21:14 we move on to the discussion i'd like to
21:17 

21:17 let the audience know that the language
21:20 

21:20 interpreters are here um and you if you
21:24 

21:24 want you can access
21:26 

21:26 an interpretation of today's event in
21:28 

21:28 both sinhala and tamil instructions are
21:30 

21:30 in the chat box uh this is available on
21:33 

21:33 zoom
21:34 

21:34 um so uh dr raj paterna thank you so
21:36 

21:36 much for that uh very interesting start
21:39 

21:39 to our conversation today um
21:42 

21:42 particularly i was i would like to
21:44 

21:44 for us to maybe think to to to tackle
21:47 

21:47 the points that you spoke about
21:49 

21:49 where you highlighted the importance of
21:51 

21:51 us having lower protection and ideally
21:54 

21:54 having only talents as a form of
21:56 

21:56 protection um if we are to see this kind
21:59 

21:59 of sister and growth for sri lanka that
22:02 

22:02 the country is in quite dire need of um
22:04 

22:04 if i could um
22:07 

22:07 if i could direct this question uh to
22:09 

22:09 his excellency ambassador
22:11 

22:11 because at this moment
22:13 

22:13 sri lanka's economy is in a rather
22:15 

22:15 precarious position
22:17 

22:17 and how important is it that
22:19 

22:19 we
22:20 

22:20 retain our gsp position
22:23 

22:23 we have lost it in the past
22:25 

22:25 are we going to see a repeat of this
22:27 

22:27 and what what are the consequences
22:30 

22:30 in light of the comments that dr rajpath
22:32 

22:32 has now shared
22:35 

22:35 thank you
22:36 

22:36 well gsp was granted gsp plus was
22:38 

22:38 granted first in 2005 then withdrawn in
22:41 

22:41 2010 and then reinstated in 2017
22:46 

22:46 but with some conditions and among these
22:48 

22:48 conditions there was
22:50 

22:50 the commitment of the government to
22:52 

22:52 review the prevention of terrorism act
22:56 

22:56 and
22:57 

22:57 i mean just to to frame things for those
22:59 

22:59 who are not familiar the generalized
23:01 

23:01 system of preferences plus means that
23:04 

23:04 two-thirds of the turret lines uh get uh
23:09 

23:09 access to the eu market with reduce or
23:11 

23:11 no
23:12 

23:12 tariff so it's a serious um advantage
23:15 

23:15 there are only eight countries that have
23:17 

23:17 that advantage so it is uh particularly
23:20 

23:20 beneficial to sri lanka and if i go into
23:23 

23:23 that
23:24 

23:24 you know the risk of losing it and
23:26 

23:26 and how beneficial it is
23:28 

23:28 so now people talk a lot about it
23:31 

23:31 because there was a european parliament
23:32 

23:32 resolution
23:34 

23:34 on the 10th of june 2010
23:37 

23:37 and i've heard many many interpretation
23:40 

23:40 of that resolution
23:41 

23:41 over the last uh two months so i will
23:44 

23:44 read um
23:46 

23:46 precisely the terms of of that
23:48 

23:48 resolution
23:49 

23:49 it says after explaining all the
23:51 

23:51 difficulties in terms of human rights in
23:53 

23:53 sri lanka
23:55 

23:55 it says um
23:56 

23:56 that the european parliament calls on
23:59 

23:59 the commission and it's important here
24:01 

24:01 to know that the the commission is the
24:04 

24:04 executive of of the eu roughly speaking
24:07 

24:07 and has uh the right and the competence
24:10 

24:10 to look at the gsp plus it's it's only
24:12 

24:12 the commission that proposes it has the
24:15 

24:15 exclusive right of initiative so
24:17 

24:17 it's the commission power so the
24:18 

24:18 european parliament invites the
24:20 

24:20 commission and the european external
24:22 

24:22 action service to use the gsp plus as a
24:25 

24:25 leverage to push for advancement on sri
24:27 

24:27 lanka's human rights obligations and
24:29 

24:29 demand the repeal or replacement of the
24:31 

24:31 pta to carefully assess whether there is
24:34 

24:34 sufficient reason as a last resort to
24:37 

24:37 initiate a procedure for the temporary
24:39 

24:39 withdrawal of sri lanka's gsp
24:42 

24:42 status so it's a last resort um it's a
24:46 

24:46 temporary withdrawal and it has to be
24:49 

24:49 based on if there's a sufficient reason
24:52 

24:52 so
24:54 

24:54 that's a very specific process now what
24:56 

24:56 are the advantages of gsp plus for sri
24:59 

24:59 lanka
24:60 

25:00 first of all for the government i think
25:02 

25:02 it's it's positive for any government
25:04 

25:04 as being seen engaging
25:07 

25:07 in uh
25:08 

25:08 basic human rights
25:10 

25:10 and implementing the goals and values of
25:12 

25:12 all democracies i think that any
25:13 

25:13 government would take pride in this and
25:16 

25:16 and
25:17 

25:17 with the context that we have with the
25:18 

25:18 government we can see that there's real
25:20 

25:20 engagement
25:21 

25:21 um but more than that um
25:23 

25:23 gsp plus provide
25:25 

25:25 quite a lot of foreign currency
25:27 

25:27 to sri lanka
25:28 

25:28 at the time where foreign currencies
25:30 

25:30 seem to be particularly precious to the
25:32 

25:32 country
25:33 

25:33 so
25:34 

25:34 not benefiting from it would certainly
25:36 

25:36 have an impact
25:38 

25:38 on the balance of payment situation
25:40 

25:40 which is already a cause of concern
25:44 

25:44 and
25:45 

25:45 also um
25:46 

25:46 gsp plus through this economic uh
25:49 

25:49 benefit provide a lot of employment a
25:51 

25:51 lot of people have more work thanks to
25:54 

25:54 gsp plus that's for the immediate impact
25:57 

25:57 then there's a kind of
25:58 

25:58 um
25:60 

25:60 more long-term
26:01 

26:01 view there's the second group of reasons
26:03 

26:03 why it's important
26:05 

26:05 um we've seen with covet 19 that it's
26:08 

26:08 important to have resilient supply
26:09 

26:09 chains and to try to
26:12 

26:12 get into the supply chain without having
26:14 

26:14 a preferential access to the eu is going
26:16 

26:16 to be more difficult for sri lanka
26:19 

26:19 also competitiveness
26:23 

26:23 bangladesh and vietnam have been uh
26:25 

26:25 mentioned so bangladesh and vietnam
26:27 

26:27 are not in the same situation of sri
26:29 

26:29 lanka vietnam doesn't have gsp plus but
26:31 

26:31 vietnam has increased its imports its
26:34 

26:34 exports to the eu over the last i mean
26:36 

26:36 between 2010 and 2019 by 400 percent
26:39 

26:39 and bangladesh by 150
26:43 

26:43 sri lanka has only increased its import
26:45 

26:45 compared to 2010 by 60
26:48 

26:48 and half of it is
26:51 

26:51 thanks to the gsp plus reinstatement in
26:53 

26:53 2017.
26:55 

26:55 so
26:56 

26:56 competitively sri lanka is engaged in a
26:60 

26:60 sort of race with the other up and
27:03 

27:03 coming countries in the region and to
27:05 

27:05 now at this juncture uh not benefit from
27:07 

27:07 gst plus would really question the
27:09 

27:09 competitiveness of sri lanka compared to
27:11 

27:11 these countries that are catching up
27:13 

27:13 quickly
27:14 

27:14 um and also
27:16 

27:16 with the gsp plus
27:18 

27:18 many exporters especially in the
27:20 

27:20 garments uh industry but also fish tires
27:23 

27:23 um are focused on the eu market and the
27:25 

27:25 eu market is a competitive one it's very
27:28 

27:28 open uh but it's also one of high
27:30 

27:30 standards high added value high prices
27:33 

27:33 so by maintaining this focus sri lanka
27:35 

27:35 can try to keep up with its
27:37 

27:37 competitivity especially compared to the
27:39 

27:39 others
27:40 

27:40 and then finally and i will stop here to
27:43 

27:43 put this in the larger prospect of the
27:44 

27:44 economic recovery
27:46 

27:46 um
27:47 

27:47 gsp plus has has a lot of potential it
27:49 

27:49 can be used more intensively at the
27:50 

27:50 moment only 60 of uh of the total use
27:53 

27:53 allowed is is is implemented by the
27:56 

27:56 industry so more integration and more
27:58 

27:58 also linked with
27:59 

27:59 the supply chain could uh improve that
28:02 

28:02 but also done in the right way and with
28:05 

28:05 other economic reforms it could really
28:07 

28:07 send a signal to investors uh uh to um
28:10 

28:10 to people who want to trade that sri
28:13 

28:13 lanka is open for business but that
28:15 

28:15 depends on other measures but it its
28:17 

28:17 value could be amplified so the pen
28:19 

28:19 potential is big and i will stop here
28:24 

28:24 thank you very much ambassador um so in
28:26 

28:26 particular um
28:28 

28:28 i found interesting the point uh that
28:30 

28:30 the embassador made uh on sri lanka's
28:34 

28:34 competitiveness of our exports um and
28:36 

28:36 that we don't seem to be keeping up with
28:38 

28:38 our uh with our peers in the region um
28:42 

28:42 professor primition rasa coral if i
28:45 

28:45 could um ask you to jump in at this
28:47 

28:47 point um and weigh in here um
28:50 

28:50 particularly because in the past when
28:52 

28:52 we've seen a growth in sri lanka's
28:55 

28:55 trade
28:56 

28:56 notably uh once the economy was opened
28:59 

28:59 in the late 70s uh and in the 80s and we
29:02 

29:02 had the shift towards manufacturing and
29:04 

29:04 services um that
29:06 

29:06 that that shift drove a lot of the
29:09 

29:09 growth uh in that time period for the
29:12 

29:12 country
29:12 

29:12 if we are to recover from our present uh
29:16 

29:16 crunch in terms of
29:18 

29:18 our present economic crunch how would we
29:21 

29:21 be able to uh
29:23 

29:23 to up our game in terms of trade
29:25 

29:25 competitiveness and integrate better
29:27 

29:27 into global markets
29:34 

29:34 professor premachandra the koala are you
29:38 

29:38 can you hear us yeah can you hear me
29:42 

29:42 yes we can hear you uh we can't see you
29:45 

29:45 but that's fine you can you can continue
29:47 

29:47 yeah i i'll put no no i'll i'll
29:53 

29:53 indeed yeah now you can see me
29:56 

29:56 yeah
29:58 

29:58 anita uh if it's okay with you
30:01 

30:01 what i am going to do now is
30:04 

30:04 take about 10 to 12 minutes
30:07 

30:07 to make
30:09 

30:09 a to some of the key points uh dr
30:13 

30:13 rajapathan has made
30:15 

30:15 in order to provide the setting for the
30:19 

30:19 discussion
30:20 

30:20 would it be fine with you i mean i will
30:22 

30:22 cover what you ask and in addition to
30:25 

30:25 that i think we need little bit
30:27 

30:27 structure
30:29 

30:29 for the
30:31 

30:31 discussion uh to ask get question from
30:34 

30:34 the audience and so on
30:37 

30:37 let me begin by saying that
30:40 

30:40 if
30:41 

30:41 any sensible policy maker
30:44 

30:44 in newly developing countries in the
30:47 

30:47 region in vietnam
30:49 

30:49 cambodia or our latest
30:53 

30:53 bangladesh listen to his speech they
30:56 

30:56 would not praise any question they will
30:59 

30:59 just
31:00 

31:00 check their note their head to say agree
31:03 

31:03 with everything
31:05 

31:05 now this debate about whether we should
31:09 

31:09 backtrack from open door policy
31:12 

31:12 uh i think it is unique to sri lankan
31:15 

31:15 policy debate right uh what we really
31:19 

31:19 hear in this debate it uh what we were
31:23 

31:23 taught that perez university in the
31:25 

31:25 early 70s
31:27 

31:27 now in
31:28 

31:28 other countries
31:29 

31:29 the debate is virtually settle
31:32 

31:32 if you want to achieve
31:34 

31:34 salesfasting growth
31:36 

31:36 development that means growth with
31:38 

31:38 poverty reduction there is no other way
31:42 

31:42 than global economy integration
31:45 

31:45 and this week is accepted everywhere in
31:49 

31:49 this region
31:51 

31:51 perhaps other than in
31:54 

31:54 north korea but and sri lanka
31:57 

31:57 is unique i think we are talking about
31:60 

31:60 an old issue
32:02 

32:02 which has already been resold in other
32:04 

32:04 countries now i am going to structure my
32:08 

32:08 presentation
32:09 

32:09 uh to focus on four themes relating to
32:13 

32:13 dr rajpatharna's presentation
32:17 

32:17 firstly i am going to make some opening
32:20 

32:20 remarks about
32:22 

32:22 the role of
32:23 

32:23 outward orientation
32:25 

32:25 in
32:26 

32:26 sustained economic development
32:29 

32:29 then i'm going to comment
32:32 

32:32 on what you the central bank report call
32:35 

32:35 its novel economic policy to me it is
32:38 

32:38 now not novel this is what uh our old
32:43 

32:43 pulse makers speed
32:45 

32:45 in the 70s i am going to
32:47 

32:47 discuss little bit about this so-called
32:51 

32:51 novel economic policy
32:54 

32:54 then if time permits if you don't cut me
32:57 

32:57 off and to tell a little bit about the
33:00 

33:00 role of fdas in
33:03 

33:03 our development strategy whether it can
33:05 

33:05 play a
33:06 

33:06 useful role
33:08 

33:08 and then i'm going to tell little bit
33:10 

33:10 about
33:11 

33:11 abuse of the term
33:14 

33:14 value-added trade
33:16 

33:16 how it is inconsistent with
33:19 

33:19 global economic integration in this
33:22 

33:22 current
33:23 

33:23 global context
33:25 

33:25 let me begin with you can
33:28 

33:28 give me signal if i'm taking time right
33:31 

33:31 firstly what is the role of trade
33:34 

33:34 orientation in economic development
33:37 

33:37 when you read sri lankan newspaper so
33:40 

33:40 listen to policy makers they give a
33:42 

33:42 simple answer we need exports
33:46 

33:46 to earn foreign
33:48 

33:48 right
33:49 

33:49 the focus is on maintaining balance of
33:52 

33:52 payment position but it's a very
33:55 

33:55 simplistic way of looking at the role of
33:59 

33:59 economic
34:01 

34:01 integration or export orientation
34:04 

34:04 in economic development
34:07 

34:07 we know that
34:09 

34:09 expert orientation
34:13 

34:13 works as an
34:14 

34:14 engine of economic growth development
34:18 

34:18 in
34:19 

34:19 addition to meeting balance of payment
34:22 

34:22 requirements
34:24 

34:24 export could be good to economic
34:27 

34:27 dynamism
34:28 

34:28 in three ways
34:31 

34:31 firstly
34:34 

34:34 in a developing country
34:36 

34:36 our comparative advantage in
34:39 

34:39 international trade
34:40 

34:40 lies in relatively labor-intensive
34:44 

34:44 production processes right we trade
34:47 

34:47 traded relatively developed countries
34:49 

34:49 which are more capital and technology
34:52 

34:52 intensive we are relatively more lab
34:55 

34:55 intensive therefore export oriented
34:59 

34:59 growth
35:00 

35:00 is the surefire fire way to reduce
35:04 

35:04 poverty
35:06 

35:06 right
35:06 

35:06 uh
35:07 

35:07 export orientation
35:09 

35:09 mold or change your production structure
35:13 

35:13 in line with your comparative advantage
35:17 

35:17 it generates more employment
35:20 

35:20 labor
35:22 

35:22 is the only resource
35:24 

35:24 owned by the poor
35:26 

35:26 therefore employment generation means
35:29 

35:29 injecting money to the poor
35:32 

35:32 therefore
35:34 

35:34 no country in the world
35:36 

35:36 has achieved growth with equity our
35:39 

35:39 reduction poverty reduction on the
35:41 

35:41 sustainable basis without global
35:45 

35:45 economic integration
35:47 

35:47 look at china when china started the
35:51 

35:51 reform process
35:52 

35:52 50 percent of people
35:55 

35:55 lived
35:56 

35:56 below the poverty line
35:58 

35:58 over the last three decades poverty rate
36:02 

36:02 in china had declined to less than one
36:05 

36:05 percent
36:06 

36:06 simply because
36:08 

36:08 uh
36:09 

36:09 density of pin open up the coastal area
36:13 

36:13 to trade and foreign investment every
36:16 

36:16 year 15 million workers
36:19 

36:19 moved from the countryside
36:22 

36:22 to the urban lab intensive production
36:25 

36:25 processes that was the key to
36:28 

36:28 poverty reduction in china it happened
36:31 

36:31 in a small way in india indian reforms
36:34 

36:34 have been half-hearted but still the
36:37 

36:37 poverty rate has been significantly
36:40 

36:40 produced during the
36:42 

36:42 perform era
36:44 

36:44 1991 after
36:47 

36:47 i have been working on vietnam
36:50 

36:50 in vietnam there has been a dramatic
36:53 

36:53 reduction in poverty rate because of
36:55 

36:55 global economic integration through
36:58 

36:58 export-oriented growth
37:00 

37:00 then that is the first point why export
37:03 

37:03 oriented development is needed
37:07 

37:07 secondly scale economies
37:10 

37:10 think about a tiny country
37:13 

37:13 aiming to achieve a six percent growth
37:16 

37:16 rate
37:17 

37:17 can you
37:18 

37:18 achieve that
37:19 

37:19 by focusing with the domestic market it
37:23 

37:23 is impossible
37:24 

37:24 to give you an example
37:27 

37:27 look at mauritius mauritius of the
37:30 

37:30 prison for our political
37:32 

37:32 prisoners during the colonial period
37:35 

37:35 right it's an island with 1.2 million
37:39 

37:39 population
37:41 

37:41 but their perception income is three
37:43 

37:43 times of our
37:45 

37:45 why that happened
37:47 

37:47 they embraced
37:49 

37:49 export led growth well before us
37:52 

37:52 in the
37:53 

37:53 early 70s and because of the dragonian
37:57 

37:57 protectionist policy we miss this type
38:00 

38:00 of opportunity think about a company
38:03 

38:03 like mars or brandix
38:06 

38:06 employing
38:08 

38:08 more than
38:09 

38:09 50 000 workers
38:11 

38:11 can you imagine a company like that
38:15 

38:15 emerging
38:16 

38:16 with a domestic market-oriented focus
38:20 

38:20 we need scale economies
38:22 

38:22 scale economies come from
38:25 

38:25 global economic integration therefore
38:28 

38:28 that is the second point
38:30 

38:30 the third point is what dr raj paterna
38:34 

38:34 said
38:36 

38:36 productivity improvement
38:38 

38:38 no country in the world
38:40 

38:40 has achieved productivity
38:44 

38:44 improvement on a sustainable basis
38:48 

38:48 within a closed economy framework
38:52 

38:52 when you open the economy
38:55 

38:55 producers face
38:57 

38:57 import competition
38:59 

38:59 at the same time experts need to
39:02 

39:02 maintain maintain quality standards
39:05 

39:05 they have to emulate
39:07 

39:07 a
39:08 

39:08 state-of-the-art technology therefore
39:11 

39:11 for productivity improvement is
39:14 

39:14 positively related with
39:17 

39:17 export orientation because of these
39:20 

39:20 three reasons
39:22 

39:22 firstly restructuring the economies
39:25 

39:25 production process
39:26 

39:26 in line with your compared to advantage
39:29 

39:29 and generating employment to reduce
39:32 

39:32 poverty
39:34 

39:34 secondly scale economy factor
39:37 

39:37 and thirdly
39:39 

39:39 the point i made about productivity all
39:43 

39:43 these factors taken together
39:46 

39:46 lead to the inference that
39:48 

39:48 trade is not simply a balance of payment
39:52 

39:52 filling device but it is an engine of
39:56 

39:56 economic development
39:58 

39:58 now let me with that background
40:01 

40:01 uh let me move to the
40:04 

40:04 second uh
40:06 

40:06 sub topic which is the
40:10 

40:10 so-called
40:11 

40:11 new economic policy framework
40:14 

40:14 how it is consistent with
40:17 

40:17 our development priorities i'd say in a
40:21 

40:21 short sentence actually this can be a
40:24 

40:24 development disaster if we follow this
40:28 

40:28 policy and
40:29 

40:29 still the government has not come up
40:31 

40:31 with a definite policy statement and
40:34 

40:34 government
40:36 

40:36 appointed the presidential commission it
40:38 

40:38 came up with the report but the only
40:42 

40:42 source for us is the central bank report
40:45 

40:45 on page 20 there is about half a page
40:49 

40:49 about
40:50 

40:50 uh economic development and policy to me
40:54 

40:54 that half a pay is full of slogans there
40:59 

40:59 is no analysis to support the central
41:03 

41:03 bank policy prescriptions either our
41:06 

41:06 policy directions have to be guided by
41:10 

41:10 what is happening in other countries in
41:12 

41:12 the region right
41:15 

41:15 or it has to be
41:17 

41:17 guided by our own economic history
41:21 

41:21 what have we achieved on the limited
41:24 

41:24 economic opening what are the
41:27 

41:27 disadvantages of the closed economy
41:30 

41:30 these things are never they are not
41:32 

41:32 discussed
41:34 

41:34 in the report but they say that
41:37 

41:37 in order to solve our
41:40 

41:40 issues
41:42 

41:42 we need privatizing winning in the space
41:46 

41:46 and emphasize domestic production
41:49 

41:49 then
41:50 

41:50 based on the presidential report they
41:54 

41:54 have come up with 11 product lists we
41:57 

41:57 don't know how these are selected that
42:00 

42:00 is one product called electronic and
42:03 

42:03 electrical goods there is another
42:06 

42:06 category called machinery uh i can't see
42:09 

42:09 the difference between the two but
42:11 

42:11 whatever it is it is a ad hoc product
42:15 

42:15 selection now i want to
42:19 

42:19 make
42:20 

42:20 three points relating to
42:23 

42:23 this
42:24 

42:24 proposed strategy firstly the proposed
42:27 

42:27 strategy
42:28 

42:28 the selection of the production mix is
42:32 

42:32 not consistent with what i call
42:35 

42:35 global
42:37 

42:37 production sharing
42:39 

42:39 which has been the driving force behind
42:42 

42:42 economic globalization
42:45 

42:45 over the last three to four decades
42:48 

42:48 group
42:49 

42:49 countries have
42:51 

42:51 gained export development
42:54 

42:54 in asian region including vietnam
42:57 

42:57 recently by
42:59 

42:59 joining global production networks
43:03 

43:03 and
43:04 

43:04 no country in the world now
43:06 

43:06 produce
43:08 

43:08 a good from the beginning to end within
43:10 

43:10 the
43:11 

43:11 given
43:12 

43:12 [Music]
43:14 

43:14 geographical boundaries countries
43:17 

43:17 specializing different segments within
43:21 

43:21 the production value chain of given
43:24 

43:24 manufactured goods
43:27 

43:27 in other words the
43:28 

43:28 made in the
43:30 

43:30 made in the
43:31 

43:31 country x label has become invalid over
43:35 

43:35 the last three decades
43:38 

43:38 most of the products are made in the
43:41 

43:41 world
43:42 

43:42 right country a country has to identify
43:47 

43:47 comparative advantage
43:49 

43:49 within the production network according
43:52 

43:52 to my estimate
43:55 

43:55 this product list 11 product list
43:58 

43:58 actually central bank say there can be
44:00 

44:00 many more adding to this right
44:03 

44:03 in this product list
44:05 

44:05 85 to 90 percent are traded within
44:09 

44:09 global production networks countries
44:12 

44:12 specialize in part and components and
44:15 

44:15 final assembly and
44:17 

44:17 the old idea that a country produce a
44:20 

44:20 good from beginning to end in the given
44:23 

44:23 location
44:25 

44:25 and trades
44:26 

44:26 with other countries in other words the
44:28 

44:28 so-called uh ricardian example trade for
44:33 

44:33 wine for clone is no longer valid for
44:37 

44:37 about two thirds of world production
44:40 

44:40 now well central bank advocacy is
44:44 

44:44 entirely based on
44:46 

44:46 that outdated concept of countries
44:49 

44:49 specializing in goods from beginning to
44:53 

44:53 end these type of goods are disappearing
44:57 

44:57 right
44:58 

44:58 and
44:59 

44:59 actually when you look at our export
45:02 

45:02 experience over the last 40 years
45:05 

45:05 there have been some
45:07 

45:07 dynamic
45:09 

45:09 industries within global value change
45:13 

45:13 emerging
45:14 

45:14 there are companies producing car
45:17 

45:17 components
45:18 

45:18 right
45:18 

45:18 there are
45:20 

45:20 at least 10 companies
45:22 

45:22 producing components for cars
45:25 

45:25 and there is a company in cadaver
45:28 

45:28 producing component for airbus i mean
45:32 

45:32 these type of activities are not even
45:35 

45:35 mentioned
45:36 

45:36 in this report right that is my first
45:40 

45:40 comment about uh the central bank or the
45:43 

45:43 government advocacy it is out of line
45:46 

45:46 context
45:48 

45:48 with global changes in international
45:52 

45:52 production
45:54 

45:54 then
45:54 

45:54 second point is
45:57 

45:57 selective intention
45:59 

45:59 uh it says that government has to pick
46:03 

46:03 up winning industries and these are the
46:06 

46:06 winning industries they
46:08 

46:08 say
46:09 

46:09 of course
46:11 

46:11 when you look at experiences of korea or
46:15 

46:15 taiwan
46:16 

46:16 we can identify
46:18 

46:18 few cases of government intervention
46:21 

46:21 doing very well
46:24 

46:24 success cases but at the same time
46:30 

46:30 we can
46:31 

46:31 identify hundreds and thousands of
46:34 

46:34 failed cases during the imports of
46:37 

46:37 tuition era even from sri lanka we can
46:40 

46:40 pick up at least two couple of hundred
46:44 

46:44 failed cases right
46:46 

46:46 then
46:48 

46:48 one should not
46:50 

46:50 uh generalize from few cases when we
46:53 

46:53 talk about national development policy
46:56 

46:56 now uh people like hajjun chen who will
46:60 

46:60 be coming to address uh central bank in
47:03 

47:03 few weeks time
47:04 

47:04 they identify some success cases and
47:08 

47:08 tell fairy tales but when you analyze
47:12 

47:12 these cases you can see that these
47:16 

47:16 successes have
47:18 

47:18 three
47:19 

47:19 inherent features
47:21 

47:21 firstly
47:23 

47:23 the incentives given to these specific
47:26 

47:26 industries had been strictly time-bound
47:30 

47:30 in korea or taiwan when they protect an
47:33 

47:33 industry it would be for five years or
47:36 

47:36 three years not beyond that
47:39 

47:39 the second feature of this selective
47:42 

47:42 industrialization strategy is
47:46 

47:46 export performance requirement
47:49 

47:49 was strictly imposed on the beneficiary
47:52 

47:52 firm
47:54 

47:54 in korea and taiwan when the government
47:57 

47:57 give
47:58 

47:58 protection they said that within five
48:01 

48:01 years time you have to become a dynamic
48:03 

48:03 exporter
48:05 

48:05 thirdly
48:06 

48:06 selective intervention was introduced
48:10 

48:10 without
48:12 

48:12 disturbing the incentive structure
48:15 

48:15 in the country
48:17 

48:17 competitiveness of export production was
48:20 

48:20 preserved
48:21 

48:21 while protecting these industries
48:24 

48:24 actually i have a quotation from uh
48:28 

48:28 pakistan here but i don't have time to
48:31 

48:31 show it i'll show it later
48:34 

48:34 part
48:35 

48:35 he
48:36 

48:36 even maintained a prison right it was
48:39 

48:39 called shield
48:41 

48:41 moon
48:42 

48:42 next to his
48:43 

48:43 palace actually once he introduced
48:47 

48:47 incentives if exporters do not meet this
48:51 

48:51 incentive requirement he framed cases
48:54 

48:54 and put them in jail i mean can you do
48:57 

48:57 these type of things in chinese sri
48:60 

48:60 lanka with a fragile political system
49:04 

49:04 right
49:05 

49:05 and
49:07 

49:07 when you
49:08 

49:08 serve
49:09 

49:09 the central bank report advocate
49:12 

49:12 selective intervention without
49:16 

49:16 while ignoring the fact that these
49:20 

49:20 special cases highlighted by hajjun chan
49:23 

49:23 amsterdam and others had
49:26 

49:26 very unique features relating to their
49:29 

49:29 governance structure
49:31 

49:31 in this country can you do that that is
49:35 

49:35 my question
49:37 

49:37 thirdly
49:40 

49:40 if you want to
49:42 

49:42 give incentives you have to select
49:45 

49:45 industries in a very careful way
49:48 

49:48 now here the list
49:51 

49:51 include everything
49:53 

49:53 other than ready-made government which
49:55 

49:55 is the most successful case it is
49:57 

49:57 missing in the list and then say we
50:00 

50:00 protect these
50:02 

50:02 31 big industries and there can be many
50:05 

50:05 more and this is a recipe for disaster
50:09 

50:09 every manufacturer is not now going to
50:13 

50:13 ask for protection right uh production
50:17 

50:17 is for grab for them right
50:20 

50:20 when the list is not limited therefore
50:23 

50:23 because of these three reasons firstly
50:27 

50:27 product
50:29 

50:29 selection
50:30 

50:30 is virtually has ignored the global
50:34 

50:34 phenomena of global production sharing
50:37 

50:37 which has been the driving force of
50:39 

50:39 manufactured export expansion in the
50:41 

50:41 world if you look at east asian
50:44 

50:44 countries out of their total export more
50:48 

50:48 than 80 percent
50:50 

50:50 is part and component and final assembly
50:53 

50:53 not goods produced from the beginning to
50:55 

50:55 end even the given the country location
50:58 

50:58 the second point i made is that they
51:02 

51:02 talked about selective intervention but
51:05 

51:05 they have ignored why selective
51:07 

51:07 intervention
51:08 

51:08 has worked in some countries why
51:12 

51:12 do we have these preconditions in sri
51:16 

51:16 lanka thirdly when you come up with a
51:20 

51:20 vastly
51:22 

51:22 list and say that we are going to do
51:25 

51:25 incentives it is it open up the market
51:29 

51:29 for uh
51:31 

51:31 i mean the
51:32 

51:32 demand for protection protection is
51:35 

51:35 great for bargaining uh by the
51:38 

51:38 protectionist lobby therefore when you
51:42 

51:42 take all this uh
51:43 

51:43 point into account
51:45 

51:45 but in a nutshell
51:47 

51:47 this policy you turn is going to be
51:51 

51:51 a
51:52 

51:52 recipe for disaster then i think i have
51:56 

51:56 taken a lot of time the next two point i
51:59 

51:59 want to highlight
52:00 

52:00 is firstly
52:02 

52:02 the fda debate with the fts can help
52:06 

52:06 export expansion uh then the value-added
52:10 

52:10 myth
52:11 

52:11 uh i'll leave it
52:12 

52:12 for discussion later
52:15 

52:15 thank you very much
52:17 

52:17 thank you very much professor
52:19 

52:19 um
52:20 

52:20 that was a very very interesting insight
52:23 

52:23 and explanation into
52:25 

52:25 how where trade is moving and what sri
52:28 

52:28 lanka has been doing or not doing rather
52:31 

52:31 when it comes to trade policy among many
52:34 

52:34 other things um
52:36 

52:36 dr dharatna if i could
52:40 

52:40 ask you to jump in here because now we
52:43 

52:43 have heard um
52:44 

52:44 from dr rajapatna from um the ambassador
52:48 

52:48 from protest
52:50 

52:50 and the sort of uh a few a few themes
52:53 

52:53 seem to be common uh in in in the in the
52:57 

52:57 insights that have come out
52:59 

52:59 i we're not taking full advantage of the
53:02 

53:02 benefits given to us through gsp plus um
53:06 

53:06 we're not as competitive as our peers in
53:08 

53:08 the region
53:10 

53:10 uh
53:10 

53:10 as
53:12 

53:12 professor coral highlighted
53:15 

53:15 if the future of trade and indeed
53:17 

53:17 retread is right now is in global
53:19 

53:19 production networks
53:21 

53:21 and we haven't integrated
53:23 

53:23 sufficiently or even probably started
53:26 

53:26 properly integrating at all
53:28 

53:28 [Music]
53:29 

53:29 what is that going to do to sri lanka's
53:32 

53:32 trade position overall um
53:35 

53:35 you come from a background from
53:37 

53:37 extensive background where you have
53:39 

53:39 with the wto and sri lanka has been a
53:42 

53:42 member since since 1995
53:44 

53:44 in this context can you can you give us
53:47 

53:47 a bit of
53:48 

53:48 perspective as to how
53:50 

53:50 we can improve our trade policy to
53:52 

53:52 address the current economic position
53:55 

53:55 that sri lanka is in and improve our
53:56 

53:56 trade competitiveness um for example i
53:59 

53:59 think the the ambassador highlighted how
54:02 

54:02 in in light of kovid it is trade has
54:04 

54:04 actually proved uh to be even more
54:07 

54:07 important although at the start of the
54:08 

54:08 pandemic people were a little wary um
54:12 

54:12 now
54:12 

54:12 you know two years on it is quite clear
54:14 

54:14 that we need
54:16 

54:16 resilient supply chains we need to have
54:18 

54:18 these connections with the rest of the
54:20 

54:20 world um
54:22 

54:22 and of course as dr rajapatna
54:24 

54:24 highlighted we need to be competitive we
54:26 

54:26 need to drive productive growth through
54:28 

54:28 our trade um it was a slightly long
54:31 

54:31 question to you dr thairatnam but if you
54:33 

54:33 would be up to tackling that
54:36 

54:36 yes
54:37 

54:37 thank you very much i
54:39 

54:39 can't switch on my video could you
54:42 

54:42 that's fine doctor that we can hear you
54:44 

54:44 clearly
54:46 

54:46 okay
54:48 

54:48 first of all let me thank you uh
54:52 

54:52 organizing this
54:53 

54:53 discussion
54:56 

54:56 i would say it is very timely
54:60 

54:60 as you mentioned
55:02 

55:02 today we are in a crisis
55:04 

55:04 the circumstances are
55:06 

55:06 not normal
55:08 

55:08 and not just a crisis we are in a severe
55:10 

55:10 crisis
55:11 

55:11 because we hear
55:13 

55:13 a lot of news
55:15 

55:15 because because this crisis
55:18 

55:18 is because we've not then it is
55:20 

55:20 manifested due to the inability
55:23 

55:23 to manage our dealings on the external
55:25 

55:25 front
55:27 

55:27 so in that context
55:30 

55:30 you ask the right question what is the
55:32 

55:32 role of the trade policy
55:37 

55:37 to get out of this
55:41 

55:41 in fact
55:44 

55:44 you asked me
55:46 

55:46 so many questions
55:48 

55:48 so
55:50 

55:50 what is
55:52 

55:52 what would be required and i hope
55:56 

55:56 this kind of
55:58 

55:58 debate
55:60 

55:60 would finally
56:02 

56:02 provide
56:04 

56:04 inputs
56:06 

56:06 for the current policy makers
56:08 

56:08 to select the right set of
56:11 

56:11 policies
56:13 

56:13 policy prescriptions
56:15 

56:15 to put the country
56:17 

56:17 into the long sustainable development
56:20 

56:20 part
56:22 

56:22 now
56:24 

56:24 with this question i would first like to
56:26 

56:26 deal with the
56:28 

56:28 you know wto
56:30 

56:30 setting wto rules
56:34 

56:34 and the current policy rate policy
56:36 

56:36 prescription
56:38 

56:38 that government sri lankan government
56:40 

56:40 has put in
56:43 

56:43 place how
56:45 

56:45 how
56:46 

56:46 they are
56:48 

56:48 and what are the implication
56:51 

56:51 now as announced by the government anita
56:56 

56:56 you
56:57 

56:57 know the
56:60 

56:60 with the onset of the first wave of the
57:03 

57:03 coil
57:05 

57:05 you know government introduced
57:07 

57:07 exceptionally broad
57:10 

57:10 import
57:11 

57:11 controls starting from the
57:14 

57:14 blanket
57:15 

57:15 import
57:16 

57:16 bank
57:19 

57:19 this
57:20 

57:20 what they say is is it rate policy
57:24 

57:24 is necessary to reduce
57:27 

57:27 import and ease pressure on the exchange
57:30 

57:30 rate and overall
57:37 

57:37 very interestingly
57:39 

57:39 this is a justification from the
57:41 

57:41 government side
57:44 

57:44 but one can raise
57:47 

57:47 eyebrows
57:49 

57:49 with series of question
57:52 

57:52 this is what i am going to ask overall
57:55 

57:55 you know your series of questions
57:58 

57:58 did the sri lankan government
58:01 

58:01 employed
58:02 

58:02 opted for
58:04 

58:04 more suitable
58:06 

58:06 option available
58:09 

58:09 were there any other alternatives
58:13 

58:13 handling the situation
58:16 

58:16 say consistent with the wt rules
58:18 

58:18 most importantly
58:20 

58:20 were these messes you know as dr raj
58:23 

58:23 paterna said he i'll i i'll go to
58:26 

58:26 reflect what he said
58:27 

58:27 would i have the best interest of the
58:30 

58:30 country's economy
58:32 

58:32 or most importantly
58:35 

58:35 you know the business community
58:38 

58:38 now before i reflect i think there are
58:40 

58:40 many people i would like to
58:43 

58:43 briefly tell about this wto because i
58:46 

58:46 hear
58:46 

58:46 i hear very sometime very
58:49 

58:49 you know what is wto we know we don't go
58:52 

58:52 to bother about wgu right right
58:55 

58:55 but uh
58:56 

58:56 i would like to say a bit of
58:58 

58:58 jurisprudence of you know the wto import
59:02 

59:02 control
59:04 

59:04 and this discussion is required wto is
59:07 

59:07 you know commonly referred to as the
59:09 

59:09 multilateral trading system
59:11 

59:11 is the only powerful international
59:14 

59:14 organization
59:18 

59:18 i call predictable
59:21 

59:21 efficient efficiently functioning
59:24 

59:24 system
59:25 

59:25 to regulate huge
59:28 

59:28 amount of international trade when i say
59:30 

59:30 huge
59:31 

59:31 i just look at the right 2019 figures
59:35 

59:35 19 trillion
59:37 

59:37 u.s dollars worth of export global
59:41 

59:41 so we need rules
59:45 

59:45 this is because this amount of this
59:48 

59:48 amount of trade is because there are
59:50 

59:50 rules
59:51 

59:51 data conducted according to the rules
59:54 

59:54 so therefore
59:56 

59:56 you know this expansion of the chinese
59:59 

59:59 now i i know that uh you know with the
60:01 

60:01 chinese succession in 2001 i was in
60:04 

60:04 geneva
60:05 

60:05 you know
60:07 

60:07 more than 97 percent of the world trade
60:10 

60:10 is now gone by the wt therefore very
60:13 

60:13 important
60:15 

60:15 very important we align with this rule
60:18 

60:18 we follow the rule
60:19 

60:19 now
60:20 

60:20 i am now next let me come to the key
60:23 

60:23 question what the wto rule say about the
60:26 

60:26 import control
60:27 

60:27 you know you know
60:29 

60:29 wto
60:31 

60:31 rules you know there's a particular
60:33 

60:33 provision article 11.1 or whatever
60:36 

60:36 very clear on that
60:38 

60:38 it says
60:39 

60:39 i mean this is pertaining to the general
60:41 

60:41 elimination of the quantitative
60:43 

60:43 restriction
60:44 

60:44 you know
60:45 

60:45 they are
60:46 

60:46 you know prescription is very precise
60:49 

60:49 and very comprehensive
60:51 

60:51 you know this rule has been further
60:54 

60:54 elaborated you know what do you call the
60:57 

60:57 wto panels in the case look
61:00 

61:00 accordingly
61:02 

61:02 you know what sri lanka
61:05 

61:05 opted for
61:07 

61:07 complete ban
61:08 

61:08 quantitative erections
61:11 

61:11 are completely
61:13 

61:13 prohibited
61:15 

61:15 other than it says
61:17 

61:17 duties and taxes and charges
61:20 

61:20 right if i use the
61:23 

61:23 precise language get language what it
61:26 

61:26 says is
61:28 

61:28 contracting parties oh now it is w2
61:31 

61:31 members shall not institute or maintain
61:34 

61:34 contributing or import restrictions
61:38 

61:38 other than taxes
61:40 

61:40 now what are these quantitative
61:41 

61:41 directions they are come to i mean very
61:43 

61:43 basic level i must say
61:46 

61:46 they are quotas
61:48 

61:48 import ban
61:49 

61:49 you know uh various form of chinese
61:52 

61:52 policy
61:53 

61:53 you know
61:55 

61:55 why
61:56 

61:56 this provision is there
61:58 

61:58 one has to understand
61:60 

61:60 because contrasting
62:01 

62:01 restriction by nature
62:04 

62:04 considered to have
62:07 

62:07 what do you call
62:08 

62:08 greater protective effect
62:11 

62:11 dr rajapat is going to explain
62:13 

62:13 why this distortion will damage the free
62:16 

62:16 trade right so i don't want it you know
62:19 

62:19 than the terrorist measures so the
62:22 

62:22 sri lankan government
62:24 

62:24 introduced
62:26 

62:26 arbitrary
62:27 

62:27 quantitative
62:29 

62:29 press that will distort trade
62:31 

62:31 so you know this is the crisis today we
62:34 

62:34 i mean now
62:36 

62:36 uh is not this is this source i mean the
62:38 

62:38 way that country
62:40 

62:40 reversing the reform agenda this kind of
62:43 

62:43 situation many economies this was
62:45 

62:45 expected nothing nothing nothing this
62:48 

62:48 shows the this was expected outcome
62:50 

62:50 so
62:51 

62:51 um
62:53 

62:53 why they stay
62:54 

62:54 this distorting there are many issues
62:56 

62:56 but i let me confide to two three four
62:60 

63:00 very briefly because time is very short
63:03 

63:03 when i
63:04 

63:04 give you something
63:05 

63:05 economic reason either vs consumer you
63:08 

63:08 are a consumer
63:10 

63:10 you know we like to have a good quality
63:13 

63:13 product and you know reasonable price
63:17 

63:17 what the quantitative restriction
63:21 

63:21 deny or impair the
63:23 

63:23 access of foreign products which are
63:26 

63:26 available for the consumers right
63:29 

63:29 so consumer in this country i have
63:33 

63:33 participated in i had the opportunity to
63:36 

63:36 in a various
63:37 

63:37 position
63:39 

63:39 consumer interest
63:42 

63:42 is not in their analysis
63:45 

63:45 right the least this is an important
63:47 

63:47 group they are
63:48 

63:48 i will give you some very specific
63:51 

63:51 example but what they mean
63:54 

63:54 then the second is
63:56 

63:56 quantitative extension
63:59 

63:59 benefits only to the rent seekers
64:02 

64:02 i emphasize there are rent seekers in
64:05 

64:05 this country
64:06 

64:06 how it happens
64:08 

64:08 again very simple to understand
64:11 

64:11 in simple economics
64:14 

64:14 you know you have international price
64:17 

64:17 and the domestic price
64:19 

64:19 so disparity between the
64:22 

64:22 what do you call the
64:24 

64:24 international price and domestic price
64:29 

64:29 caused by the quantitative restriction
64:31 

64:31 become a rent
64:34 

64:34 rent
64:35 

64:35 that
64:36 

64:36 the profit
64:37 

64:37 those who own these
64:40 

64:40 whatever
64:41 

64:41 right
64:43 

64:43 um
64:45 

64:45 my worries
64:47 

64:47 most importantly the
64:50 

64:50 implication for the
64:52 

64:52 long-term
64:54 

64:54 development
64:57 

64:57 long-term industrial development of this
64:60 

64:60 our country
65:02 

65:02 because
65:04 

65:04 if back the base badly impaired
65:06 

65:06 implemented control continuity
65:09 

65:09 restriction
65:10 

65:10 have a detrimental
65:12 

65:12 impact on the long-term development of
65:14 

65:14 the industrial europe in the country
65:19 

65:19 this is true i think
65:21 

65:21 against
65:26 

65:26 location of resources
65:29 

65:29 on the contrary you think we our
65:32 

65:32 domestic industries are open to
65:35 

65:35 you know the foreign comparison they
65:37 

65:37 will streamline productivity
65:40 

65:40 they will use new technology to improve
65:43 

65:43 product quality
65:46 

65:46 and the competitiveness of prices
65:50 

65:50 so an efficient
65:51 

65:51 location of resources will take place
65:55 

65:55 but unfortunately
65:57 

65:57 you know
65:58 

65:58 this
65:59 

65:59 quantitative recession are placed
66:02 

66:02 and gradually they were introducing
66:05 

66:05 taking away from import ban and
66:07 

66:07 introduce a system of
66:10 

66:10 import licensing
66:12 

66:12 this i call
66:15 

66:15 self-imposed non-terrorist barrier to
66:18 

66:18 self-imposed but these are you know
66:22 

66:22 other countries if you look at the other
66:23 

66:23 countries in the region they are moving
66:25 

66:25 away from import ban import licensing
66:28 

66:28 all that so here it is a situation you
66:30 

66:30 are adding another cumbersome
66:32 

66:32 for our traders
66:34 

66:34 the trading community who suffer
66:37 

66:37 well to sum up this section
66:40 

66:40 i don't want to
66:42 

66:42 give more detail i am very impressed you
66:44 

66:44 know that you mentioned the economies
66:46 

66:46 economy economy yes no economy right
66:50 

66:50 you know there was a young
66:52 

66:52 young researcher doctor asanka vijay of
66:55 

66:55 the ips he has summarized very nicely
66:58 

66:58 about this import control and you know
67:01 

67:01 what they said this to the resource
67:03 

67:03 allocation domestic manufacturing
67:05 

67:05 discourage
67:08 

67:08 you know
67:08 

67:08 and the possibility of the possibility
67:11 

67:11 of this is the last one which i want to
67:14 

67:14 make possibility of the tariff literally
67:18 

67:18 retaliation because i was in to do in
67:21 

67:21 geneva about seven day a year
67:23 

67:23 yes right by trading partners because
67:27 

67:27 the eu ambassador his excellency
67:29 

67:29 ambassador did not mention
67:31 

67:31 u.s raised many time of this one
67:35 

67:35 about this import ban
67:37 

67:37 because prolonged import ban control are
67:41 

67:41 not simply
67:43 

67:43 not consistent with the wto and high
67:46 

67:46 time to be
67:48 

67:48 addressed this one
67:49 

67:49 then
67:50 

67:50 you know the
67:51 

67:51 why
67:52 

67:52 my recommendation is
67:54 

67:54 move away at least from the qr
67:57 

67:57 but wto rules allow you to use your
67:60 

67:60 tariff
68:01 

68:01 sri lanka has you know industrial tariff
68:04 

68:04 only 35 percent we have what you call
68:06 

68:06 bound you have enough room to use the
68:09 

68:09 tariffs
68:11 

68:11 again i'm not going to use
68:14 

68:14 time you know tariff is a better option
68:16 

68:16 than quantitative erection because
68:18 

68:18 tariffs are transparent
68:20 

68:20 their tariffs generate you know revenue
68:23 

68:23 for the government
68:25 

68:25 and they linked with the foreign prices
68:27 

68:27 and automatic links for the price right
68:30 

68:30 now
68:31 

68:31 now i want to dwell on the
68:34 

68:34 very important issue
68:36 

68:36 i hope i am not taking much time
68:39 

68:39 very uh is that okay right
68:42 

68:42 important issue what sort of retiree
68:44 

68:44 structure we should have
68:47 

68:47 to tell you the truth
68:49 

68:49 if you
68:50 

68:50 i usually peruse with the
68:52 

68:52 other wto
68:55 

68:55 tariff profile across the country
68:58 

68:58 if you just produce it
69:00 

69:00 right sri lanka has the very complicated
69:04 

69:04 tariff structure what i call what many
69:08 

69:08 economists call two-tier tariff
69:10 

69:10 structure
69:11 

69:11 what it says you have a first layer
69:14 

69:14 what you call the custom duty
69:17 

69:17 and
69:18 

69:18 all these countries have this lane
69:21 

69:21 in sri lanka or and above this custom
69:25 

69:25 duty
69:26 

69:26 we have a plethora of other duties and
69:30 

69:30 charges
69:31 

69:31 and doctor
69:39 

69:39 uh i will tell you a nice story about
69:41 

69:41 the parathas says
69:43 

69:43 right this territory
69:46 

69:46 in the current policy circle is the
69:48 

69:48 taboo word bandwidth don't talk about it
69:51 

69:51 if you do
69:52 

69:52 this is not the interest of the sheila
69:55 

69:55 so that's right okay
69:57 

69:57 the paratariff
69:59 

69:59 are listed in a separate column and see
70:02 

70:02 this is a sri lankan invention
70:05 

70:05 i was involved in the pakistan trade fda
70:08 

70:08 negotiation
70:10 

70:10 at the negotiation table
70:12 

70:12 what they humbly requested was
70:15 

70:15 okay you can excellency you can
70:17 

70:17 keep your
70:19 

70:19 existing tariff don't introduce more
70:22 

70:22 but
70:23 

70:23 about one month or two months later we
70:26 

70:26 introduce more and more battery so while
70:28 

70:28 18 these now i'm because it is justified
70:31 

70:31 at that time the doctor
70:33 

70:33 rajapatirana mentioned the ballooning go
70:35 

70:35 budget it is
70:36 

70:36 no longer there is no work you can
70:39 

70:39 easily address this issue
70:41 

70:41 um
70:43 

70:43 now
70:46 

70:46 you know this um
70:47 

70:47 um i want to give you reflect on the
70:50 

70:50 parameter if ah you know in in you know
70:54 

70:54 the
70:54 

70:54 introduce
70:56 

70:56 they are in the what you call specific
70:58 

70:58 duties so unit taxes
71:01 

71:01 meaning you know unit action on the base
71:04 

71:04 is supply unit this is the
71:07 

71:07 this makes the
71:09 

71:09 comes the burst to bus
71:13 

71:13 [Music]
71:26 

71:26 is
71:27 

71:27 thousand dollar thousand rupees for five
71:30 

71:30 dollars right
71:32 

71:32 so if you
71:33 

71:33 convert this unit text into advanced
71:37 

71:37 text
71:38 

71:38 right you will see
71:39 

71:39 what i will say it appears that
71:42 

71:42 our
71:43 

71:43 structure is anti-poor
71:46 

71:46 i want to explain this to you please
71:48 

71:48 give me your time why aren't you poor
71:51 

71:51 and pro-industrialist
71:53 

71:53 you know
71:54 

71:54 pair of shoes
71:57 

71:57 you know who used these 500 rupees
71:59 

71:59 coming at the ceiling so if you impose
72:02 

72:02 1000 rupees becomes 1500
72:05 

72:05 right who buy this lower quality
72:09 

72:09 shoes
72:10 

72:10 are rude and farmers
72:12 

72:12 right imagine you have a what you call
72:15 

72:15 that is 500 rupees you have a 50 tax
72:18 

72:18 fine
72:19 

72:19 so it goes jump to the 750 rupees now
72:22 

72:22 with the paradigm of thousands it comes
72:24 

72:24 to the
72:25 

72:25 thousand five hundred
72:27 

72:27 a farmer in hungary
72:29 

72:29 or
72:31 

72:31 what will happen is
72:33 

72:33 he suppose he has uh he
72:37 

72:37 you know the rice
72:38 

72:38 per kilo he gets 75 at the whole state
72:41 

72:41 so
72:42 

72:42 if it is only a 50 percent
72:45 

72:45 tariff
72:46 

72:46 that comes to 750 he has to sell only
72:49 

72:49 how many
72:51 

72:51 you know that 10 kilos of rice
72:54 

72:54 but with this paragraph
72:57 

72:57 we have
72:58 

72:58 how many 20 kilos
73:00 

73:00 i can give many examples
73:02 

73:02 in this sanitary and where you know
73:04 

73:04 therefore uh
73:06 

73:06 you know this
73:08 

73:08 anti-poor
73:10 

73:10 tariffs and people you need tariff
73:14 

73:14 this carry factor
73:15 

73:15 for the interest of over improving our
73:18 

73:18 trade relations but for the benefit of
73:20 

73:20 our rural and the poor people
73:22 

73:22 has to be dealt with i hope these policy
73:25 

73:25 makers understand the very simple
73:27 

73:27 economics there are many things i think
73:29 

73:29 i will
73:31 

73:31 i wanted to give a good example of this
73:34 

73:34 cambodia football which is a lazy
73:36 

73:36 country please give me one minute one
73:38 

73:38 minute more football industry in
73:40 

73:40 cambodia
73:42 

73:42 today
73:43 

73:43 export
73:44 

73:44 export with a population of 16
73:48 

73:48 million people less than
73:50 

73:50 you know the sri lankan population one
73:53 

73:53 million
73:55 

73:55 worth of footwear provide job nearly one
73:57 

73:57 million
73:58 

73:58 you know one sorry one billion expo
74:01 

74:01 providing one billion
74:03 

74:03 so
74:04 

74:04 so what is the what are the argument is
74:06 

74:06 we you know we are tariff structure
74:08 

74:08 should be
74:09 

74:09 prepared to come of the
74:12 

74:12 industries that generate employment
74:16 

74:16 activity help the poor this is what the
74:19 

74:19 role of the trade policy is
74:22 

74:22 thank you very much i have if you have
74:23 

74:23 any question i am very happy to explain
74:25 

74:25 thanks
74:26 

74:26 thank you very much uh doctor that
74:29 

74:29 atmosphere um
74:31 

74:31 i would uh i dr that atmosphere attacked
74:34 

74:34 touched on on many very important points
74:37 

74:37 uh but uh one thing that kind of stood
74:40 

74:40 out was uh
74:42 

74:42 was his explanation of of import
74:44 

74:44 restrictions and the issues that come
74:46 

74:46 about when import restrictions or quotas
74:48 

74:48 are put in place um and uh i would
74:52 

74:52 really like to hear what um the
74:54 

74:54 ambassador uh of the eu delegation um
74:57 

74:57 has to say on this topic because i
74:59 

74:59 believe the eu has also uh
75:01 

75:01 sort of realized the the
75:04 

75:04 the
75:05 

75:05 consequences to the the continued uh
75:09 

75:09 import restrictions of varying degrees
75:11 

75:11 and varying tariff lines that we have
75:12 

75:12 seen over the past almost two years now
75:15 

75:15 and i believe they released a statement
75:16 

75:16 on this as well
75:18 

75:18 and as one of our largest trading
75:20 

75:20 partners um we have heard the
75:22 

75:22 perspective from uh
75:25 

75:25 from from the point of view of sri
75:27 

75:27 lankan economists but from the
75:28 

75:28 perspective of our training partners
75:30 

75:30 what
75:32 

75:32 why should we be concerned about these
75:33 

75:33 import restrictions and the trade the
75:36 

75:36 direction the trade policy has taken in
75:38 

75:38 the last few years
75:41 

75:41 thank you um first of all i
75:44 

75:44 i should
75:45 

75:45 mention
75:46 

75:46 in response to dr silva that i didn't
75:49 

75:49 raise the issue myself because i was not
75:51 

75:51 asked and i was trying to limit the time
75:53 

75:53 that i was speaking but obviously this
75:55 

75:55 is very high on the agenda of the eu
75:59 

75:59 but it's from a different point of view
76:01 

76:01 um
76:03 

76:03 the importance
76:04 

76:04 of of these restrictions for for the sri
76:07 

76:07 lankan economy is is better assessed
76:10 

76:10 by the economist than and by the sri
76:12 

76:12 lankans but from a european point of
76:14 

76:14 view our problem
76:16 

76:16 is not so much
76:18 

76:18 the deficit uh and we have a serious uh
76:21 

76:21 trade deficit with sri lanka i mean in
76:23 

76:23 relative terms but it's about the rules
76:26 

76:26 the eu tries to have a rule-based order
76:29 

76:29 and a rule-based order in all areas is
76:33 

76:33 you know benefits smaller countries
76:36 

76:36 um the eu is particular in the sense
76:38 

76:38 that many small countries uh
76:42 

76:42 uh are clustered together and with a
76:44 

76:44 couple of uh bigger ones but
76:46 

76:46 that means that
76:48 

76:48 the the values that drive the eu are
76:50 

76:50 also inspired by this rule-based
76:52 

76:52 organization and so when one country
76:55 

76:55 that has subscribed to certain uh basic
76:58 

76:58 rules and trade do not respect them we
76:60 

76:60 feel that the old architecture is at
77:02 

77:02 stake because if nothing happens uh if
77:05 

77:05 everyone can make restrictions without
77:07 

77:07 notifying them without giving a clear
77:10 

77:10 end date without giving a clear
77:13 

77:13 insight on how
77:15 

77:15 they will pan out then we have a
77:17 

77:17 difficulty um
77:19 

77:19 as i said
77:20 

77:20 the
77:21 

77:21 trade
77:22 

77:22 relation between sri lanka and eu is
77:25 

77:25 very beneficial to sri lanka
77:27 

77:27 for the last 10 years
77:30 

77:30 sri lanka has had a surplus that is
77:32 

77:32 quite consequent for its economy and the
77:35 

77:35 eu has never tried to
77:38 

77:38 change the situation it's the economy at
77:40 

77:40 work private sector at work but now with
77:43 

77:43 the import restrictions the situation
77:45 

77:45 has changed in the sense that
77:47 

77:47 this this year 2020 was the lowest
77:51 

77:51 exports of eu to sri lanka in the last
77:53 

77:53 10 years so now we can see that the
77:55 

77:55 combination of covet plus the import
77:57 

77:57 restrictions really um puts us in a in
78:00 

78:00 an imbalance that is not right and it's
78:02 

78:02 not right because it's not according to
78:04 

78:04 the rules and if everyone can flow the
78:07 

78:07 rules then it will be very difficult to
78:09 

78:09 to keep
78:11 

78:11 uh the trade flowing and without trade
78:14 

78:14 for a
78:15 

78:15 medium-sized small island indian ocean
78:18 

78:18 the prospect are not good so we take it
78:21 

78:21 from a rural point of view and it's very
78:23 

78:23 high on the agenda i've raised it
78:26 

78:26 several times and if there are no more
78:29 

78:29 uh
78:30 

78:30 action on this
78:32 

78:32 we will have to you know further uh or
78:35 

78:35 coordination with like-minded partners
78:37 

78:37 in the wto
78:39 

78:39 just as i said in in autophora we fully
78:42 

78:42 fully understand the balance of payment
78:44 

78:44 issues so
78:45 

78:45 if the measures uh can be explained
78:48 

78:48 through that fine but they need to be
78:50 

78:50 explained which means notification to
78:52 

78:52 wto rationale and also how the situation
78:56 

78:56 will pan out and
78:57 

78:57 will be
78:58 

78:58 run bound so we need to have these
79:00 

79:00 details otherwise we are not in respect
79:02 

79:02 with the rules thank you
79:07 

79:07 um
79:08 

79:08 thank you very much uh ambassador uh
79:12 

79:12 i think we might just take one more
79:14 

79:14 question um from uh just take one more
79:17 

79:17 point uh with the panelists and then
79:19 

79:19 we'll open up uh for audience questions
79:22 

79:22 um
79:23 

79:23 dr raj patrina if i could uh ask you to
79:27 

79:27 wayne here
79:30 

79:30 leading from what the ambassador also
79:32 

79:32 highlighted very interestingly his point
79:34 

79:34 about
79:35 

79:35 sri lanka's surplus with the eu and
79:40 

79:40 because this is a this is a point that
79:41 

79:41 comes out quite often in media and in
79:44 

79:44 discussions in sri lanka this question
79:46 

79:46 of uh we have a trade deficit this is a
79:49 

79:49 problem how do we narrow the trade
79:51 

79:51 deficit um and and this has been that
79:54 

79:54 conversation has been quite closely tied
79:56 

79:56 to the point of okay we need to bring in
79:59 

79:59 uh place these restrictions we need to
80:01 

80:01 reduce our imports in order to drive our
80:03 

80:03 exports up and and uh and and create
80:07 

80:07 either a surplus in our trade surplus or
80:10 

80:10 to at least at the very least reduce our
80:12 

80:12 trade deficit but could you
80:14 

80:14 could you explain to us a little bit
80:16 

80:16 more from economic perspective and in
80:18 

80:18 terms of
80:19 

80:19 the practical impact it has on sri
80:21 

80:21 lankans
80:22 

80:22 and whether this thinking is really
80:24 

80:24 quite in the right direction
80:30 

80:30 actually a single
80:34 

80:34 country having a deficit with another
80:36 

80:36 country
80:37 

80:37 in the global system is not a very
80:39 

80:39 serious
80:40 

80:40 problem unless the single country is in
80:43 

80:43 dire states and had and also assigned
80:47 

80:47 agreements
80:48 

80:48 uh to conduct
80:51 

80:51 its affairs in line with the world trade
80:52 

80:52 organization rules and regulations
80:55 

80:55 so i am a great respecter of
80:58 

80:58 wta rules because at the end of the day
81:01 

81:01 it's like a public good that everybody
81:03 

81:03 benefits from it
81:05 

81:05 it's like your traffic rules you know if
81:08 

81:08 you follow the
81:09 

81:09 drive on the left hand side in sri lanka
81:12 

81:12 that's very important rule before if
81:14 

81:14 they don't follow it there's much more
81:16 

81:16 accidents in the world in the in this
81:18 

81:18 country so similarly for trade
81:20 

81:20 uh the set of rules guarantees the trade
81:23 

81:23 to go
81:24 

81:24 uh flow easily from one country or
81:26 

81:26 another it is the basis of our growth i
81:28 

81:28 mean if you don't have that
81:31 

81:31 then we are in real trouble
81:33 

81:33 and but uh some of the things that you
81:36 

81:36 see as trade problems are really
81:37 

81:37 microeconomic problems
81:39 

81:39 so you have to make a distinction
81:41 

81:41 between rather than a single country
81:44 

81:44 single deficit whether we are conducting
81:47 

81:47 our
81:47 

81:47 uh economic policies state policies in
81:50 

81:50 this case
81:52 

81:52 properly
81:54 

81:54 you know
81:55 

81:55 keeping into the
81:57 

81:57 world rules in what uh
81:59 

81:59 person dr aaron
82:01 

82:01 explained
82:02 

82:02 so i
82:03 

82:03 i don't worry so much and maybe
82:07 

82:07 i am not doing justice to it
82:10 

82:10 but single deficit to single country but
82:12 

82:12 i would say
82:13 

82:13 i would worry about the larger question
82:15 

82:15 of import of substitution substitution
82:20 

82:20 and
82:22 

82:22 that leads to great inefficiencies
82:25 

82:25 domestic allocation or resources
82:27 

82:27 and then
82:28 

82:28 that what you see in the balance of
82:31 

82:31 payments is a manifestation of what has
82:33 

82:33 happened inside
82:35 

82:35 that's my contribution
82:38 

82:38 you very much uh dr rajpath
82:40 

82:40 um for our audience i'd like to also
82:43 

82:43 highlight that we have a deep type
82:44 

82:44 episode with dr rajapatna which is a
82:47 

82:47 primer on international trade from
82:49 

82:49 theory to practice
82:51 

82:51 the case of sri lanka
82:54 

82:54 so this uh this video is available on
82:56 

82:56 the advocate website and on our facebook
82:59 

82:59 you can also find it on all our social
83:00 

83:00 media and i would highly recommend uh
83:03 

83:03 that if you found this discussion
83:04 

83:04 interesting to go ahead uh and give that
83:07 

83:07 a watch um as dr rajpatna lays out the
83:10 

83:10 basics um of trade for
83:13 

83:13 uh
83:14 

83:14 in a quite understandable uh but yet
83:17 

83:17 nuanced way
83:18 

83:18 um
83:19 

83:19 so uh
83:21 

83:21 but uh dr rajpath if i could ask you to
83:23 

83:23 very briefly comment uh and on uh on
83:27 

83:27 what you said in terms of import
83:28 

83:28 substitution something i believe you
83:30 

83:30 touched on in your deep dive was this uh
83:34 

83:34 uh
83:34 

83:34 was the term
83:36 

83:36 efficient import substitution and this
83:38 

83:38 is something that people found quite
83:40 

83:40 interesting because right now there's a
83:41 

83:41 lot of conversation about import
83:43 

83:43 substitution but could you uh
83:45 

83:45 very briefly if possible
83:47 

83:47 give a give a give explanation as to
83:50 

83:50 what efficient import substitution would
83:52 

83:52 look like
83:53 

83:53 so
83:55 

83:55 yeah we are not against i mean
83:57 

83:57 that's the mainstream economist
84:00 

84:00 that i define as the people who have
84:02 

84:02 been quoted in
84:04 

84:04 advanced techs and economics
84:06 

84:06 uh
84:07 

84:07 make the point
84:08 

84:08 that is that
84:10 

84:10 you can if you break down
84:12 

84:12 [Music]
84:14 

84:14 a regime into
84:18 

84:18 into two parts into exports and imports
84:22 

84:22 uh
84:22 

84:22 good economic
84:25 

84:25 practice good economic
84:27 

84:27 policy is where you have
84:31 

84:31 a similar status for sufficient improved
84:34 

84:34 subtraction and equal promotion
84:36 

84:36 so impossible takes place
84:39 

84:39 uh when
84:42 

84:42 when when you replace
84:44 

84:44 the
84:46 

84:46 import disk import
84:48 

84:48 if if you
84:49 

84:49 uh
84:50 

84:50 replace it with domestic production but
84:53 

84:53 the domain production must be efficient
84:56 

84:56 otherwise what happens is that because
84:59 

84:59 of barriers that are introduced
85:01 

85:01 it
85:03 

85:03 it reduces the
85:05 

85:05 welfare of the population so they pay
85:07 

85:07 higher prices
85:08 

85:08 uh when with more competitive system if
85:12 

85:12 you if you are efficient import
85:14 

85:14 substitution case then you don't have to
85:15 

85:15 worry about it because
85:17 

85:17 that means that
85:18 

85:18 you are able to
85:20 

85:20 produce a low first
85:23 

85:23 but if you had to produce if you common
85:25 

85:25 goes and creates
85:27 

85:27 industries or
85:30 

85:30 whatever you produce
85:31 

85:31 keeping it afloat by subsidies and
85:34 

85:34 things then he said not efficient thing
85:36 

85:36 so the market this is a very good
85:38 

85:38 important thing if a country if industry
85:42 

85:42 cannot
85:43 

85:43 exist as a privacy industry
85:47 

85:47 in the market needs ahead from the
85:50 

85:50 government then it is not efficient
85:52 

85:52 because with efficiency paper to manage
85:54 

85:54 your own difference a very interesting
85:56 

85:56 work done on the case of uh
85:60 

85:60 japan few years ago
86:03 

86:03 where they found that where the
86:05 

86:05 subsidies have gone to the inhibition
86:06 

86:06 very clearly when they saw some large
86:09 

86:09 subsidies being paid
86:11 

86:11 um
86:12 

86:12 then they fought they discovered that
86:14 

86:14 these subjects are paid to
86:16 

86:16 to industries that are inefficient so
86:19 

86:19 by uh
86:21 

86:21 these ambition efficient industries most
86:24 

86:24 of the time they are not maintained
86:25 

86:25 right the ones that happen to be
86:27 

86:27 maintained is a tax on the people so
86:30 

86:30 they
86:31 

86:31 that the ability to
86:33 

86:33 to create start impossion when
86:41 

86:41 [Music]
86:48 

86:48 thank you thank you doctor
86:51 

86:51 um uh professor coral i see that you
86:53 

86:53 would like to uh weigh in here if you
86:56 

86:56 would be able to keep your comments
86:58 

86:58 brief that would be great thank you yeah
87:00 

87:00 i am to make to a point it seems that we
87:03 

87:03 are not very well focused on the real
87:05 

87:05 issues
87:07 

87:07 now uh
87:09 

87:09 uh
87:10 

87:10 mr uh then
87:12 

87:12 chaby made a very
87:14 

87:14 important point uh which directly
87:17 

87:17 related to our
87:19 

87:19 development export development policy he
87:22 

87:22 made the point
87:23 

87:23 that
87:24 

87:24 vietnam export on
87:27 

87:27 under
87:28 

87:28 gsp plus had increased by a few hundred
87:32 

87:32 times
87:34 

87:34 bangladesh export had increased by about
87:37 

87:37 100 to 150 times but sri lankan export
87:42 

87:42 had increased only by 60.
87:45 

87:45 i think
87:46 

87:46 this point is
87:47 

87:47 very important
87:49 

87:49 uh when we discuss about supply-side
87:52 

87:52 issues related sri lankan uh export
87:55 

87:55 development strategy
87:57 

87:57 now this point directly relates to
88:01 

88:01 the fta debate
88:03 

88:03 the purpose of gsp class of course
88:07 

88:07 you has been
88:09 

88:09 generous and given us gsp plus that's
88:12 

88:12 the demand side measure
88:15 

88:15 again we are talking about
88:17 

88:17 sign in fts
88:20 

88:20 now government has uh
88:22 

88:22 appointed a new minister
88:24 

88:24 to sign as many as a possible fdas what
88:29 

88:29 the point of signinft is to open up
88:32 

88:32 markets right therefore the real issue
88:36 

88:36 is
88:37 

88:37 whether our export expansion is
88:40 

88:40 constrained by supply side issues or
88:44 

88:44 demand side issues actually it is so
88:47 

88:47 tempting to show you a figure relating
88:50 

88:50 to this i think this issue is central to
88:53 

88:53 the overall debate
88:56 

88:56 i think it's
88:57 

88:57 good if you can spend few minutes to
89:00 

89:00 discuss about this uh
89:03 

89:03 uh figure
89:04 

89:04 yeah
89:05 

89:05 yeah uh let me
89:09 

89:09 make it
89:23 

89:23 say what does this figure shows
89:27 

89:27 is
89:28 

89:28 total export
89:30 

89:30 from developing countries
89:33 

89:33 has
89:35 

89:35 continued as a share of world trade has
89:38 

89:38 increased dramatically during that
89:41 

89:41 period it is on the
89:42 

89:42 right
89:44 

89:44 right hand scale right
89:46 

89:46 now
89:48 

89:48 say
89:49 

89:49 look at what has happened
89:51 

89:51 sri lanka's world market share sri
89:54 

89:54 lankan world market share has plummeted
89:56 

89:56 from about 2000
89:58 

89:58 throughout this period
90:00 

90:00 what does this shows is that it is not
90:04 

90:04 open in more market what is important
90:07 

90:07 for sri lanka but addressing the supply
90:11 

90:11 side issues right
90:13 

90:13 the
90:14 

90:14 anti-export bias this is a big issue now
90:18 

90:18 the government is promote introducing
90:21 

90:21 import restrictions
90:23 

90:23 uh trying to intervene in the foreign
90:27 

90:27 determination all these have resulted in
90:30 

90:30 shifting the incentive structure
90:33 

90:33 against export production and
90:36 

90:36 it's becoming more and more profitable
90:40 

90:40 to sell in the domestic market
90:42 

90:42 at the same time fdi is not coming to
90:46 

90:46 sri lanka because of the adverse
90:48 

90:48 investment climate
90:50 

90:50 according to my calculations between
90:54 

90:54 2005 and 2009
90:58 

90:58 230 export oriented firms left sri lanka
91:04 

91:04 mainly because of
91:06 

91:06 the policy regime was not favorable for
91:10 

91:10 attracting foreign direct investment to
91:13 

91:13 the country
91:14 

91:14 that's a close relationship between
91:16 

91:16 export oriented foreign direct
91:18 

91:18 investment and export expansion and all
91:22 

91:22 these factors have led to
91:25 

91:25 a dramatic decline
91:28 

91:28 in sri lanka's
91:29 

91:29 share in world trade
91:32 

91:32 in a context where their country's
91:35 

91:35 export shares in the world trade had
91:38 

91:38 increased dramatically what does this
91:41 

91:41 shows
91:42 

91:42 and again
91:44 

91:44 what uh
91:45 

91:45 mr dennis type data shows is that
91:49 

91:49 existing market opportunities are not
91:53 

91:53 exploited by our exporters i think we
91:56 

91:56 need to focus on this issue
91:59 

91:59 now
92:00 

92:00 that's one point i want to make the
92:03 

92:03 second point
92:05 

92:05 i want to make relating to the point uh
92:09 

92:09 dr ajapat mentioned about
92:13 

92:13 import substitution and export
92:15 

92:15 orientation now according to
92:18 

92:18 central bank report
92:20 

92:20 the
92:21 

92:21 government believe
92:22 

92:22 that
92:23 

92:23 both can be done
92:25 

92:25 side by side on the one hand you promote
92:28 

92:28 exports on the other hand you intervene
92:32 

92:32 in the domestic market to promote import
92:36 

92:36 supplement industrialization
92:38 

92:38 relating to this policy
92:40 

92:40 we learned that should learn lesson from
92:43 

92:43 the 1970s
92:46 

92:46 this is exactly what the united front
92:49 

92:49 government did and the doctrine emperor
92:52 

92:52 the theorist behind the economic policy
92:55 

92:55 he did not ignore outward orientation he
92:59 

92:59 said in budget speech we want to become
93:03 

93:03 globally integrated but in our own way
93:07 

93:07 we want to protect our industries and
93:10 

93:10 then
93:11 

93:11 provide the city to become uh export
93:14 

93:14 oriented right he was a tough skill
93:17 

93:17 proskus believed in global integration
93:20 

93:20 but they did not realize understood the
93:24 

93:24 confusion conflict between
93:26 

93:26 nationalistic ideas and export
93:29 

93:29 orientation even the words in some of
93:32 

93:32 the documents recent in sri lanka have
93:34 

93:34 been borrowed from the reports done
93:37 

93:37 during that period 1970s
93:40 

93:40 right but what happened during that
93:42 

93:42 period
93:43 

93:43 uh
93:44 

93:44 there were a lot of export incentives we
93:47 

93:47 had a system called fields foreign
93:50 

93:50 exchange entitlement certificate scheme
93:53 

93:53 given 65 percent
93:56 

93:56 uh additional furnishing incentive for
93:59 

93:59 exporters then inifera came what came up
94:03 

94:03 with the foreign direct investment
94:06 

94:06 promotion act
94:08 

94:08 2009 uh
94:10 

94:10 1972
94:12 

94:12 he gave a lot of incentive
94:14 

94:14 to foreign investors at the same time he
94:17 

94:17 created the gem cooperation and all
94:20 

94:20 these things but what happened there was
94:22 

94:22 no export expansion during that period
94:26 

94:26 simply because of the draconian import
94:29 

94:29 twisting trading
94:31 

94:31 incentive structure had uh
94:34 

94:34 skewed towards domestic market oriented
94:37 

94:37 production uh during that
94:40 

94:40 relating to this period i did a study
94:43 

94:43 about firm level export expansion during
94:46 

94:46 that period
94:47 

94:47 i'm happy to say i did it with professor
94:50 

94:50 wd lakshman do you know one of the main
94:53 

94:53 finding
94:55 

94:55 of firm level
94:57 

94:57 evidence is that the two biggest
94:60 

94:60 exporters manufactured exporters at that
95:03 

95:03 time
95:04 

95:04 who are they can you guess
95:06 

95:06 liver brothers and ceylon tobacco
95:09 

95:09 company simply because in order to get
95:12 

95:12 export
95:13 

95:13 import entitlement they would divert in
95:16 

95:16 some of their production through their
95:19 

95:19 brand network
95:20 

95:20 to other countries right it created
95:24 

95:24 bogus export during that period right
95:27 

95:27 therefore we are heading towards the
95:30 

95:30 trading if you try to promote export on
95:33 

95:33 the one hand and promote import
95:35 

95:35 subtraction on the other hand eventually
95:39 

95:39 the incentive structure gets distorted
95:42 

95:42 even the little export you might get can
95:45 

95:45 be box export i think this is a dead end
95:49 

95:49 strategy again as i mentioned earlier it
95:54 

95:54 is true that in taiwan and korea
95:57 

95:57 they promote promoted certain industries
96:01 

96:01 but
96:02 

96:02 on a
96:03 

96:03 definite time
96:04 

96:04 bound way at the same time they maintain
96:09 

96:09 incentives for export production
96:12 

96:12 in line with the protectionist regime
96:15 

96:15 if you can do that then it will uh it be
96:20 

96:20 fine but in this fragile democracy where
96:24 

96:24 protectionist lobby say vyat maga is
96:28 

96:28 dominated by protectionists right they
96:31 

96:31 are the ones who educate policies in
96:33 

96:33 that context
96:35 

96:35 i think
96:36 

96:36 trying to promote export orientation
96:39 

96:39 with import subposition i think it's a
96:42 

96:42 nightmare it's not going to happen
96:45 

96:45 thank you very much
96:46 

96:46 thank you professor
96:48 

96:48 uh dr raj patrina did you want to
97:05 

97:05 you're um if you could
97:08 

97:08 unmute yeah yeah
97:10 

97:10 great so this whole idea of for
97:12 

97:12 promotion by having one group of people
97:15 

97:15 who have very little connection uh
97:18 

97:18 people who actually do exports
97:20 

97:20 uh i making various forecasts will
97:23 

97:23 increase it by 2030
97:26 

97:26 utterly backwards situation and also
97:28 

97:28 commodity by commodity uh that's the
97:31 

97:31 first thing my second point is this that
97:33 

97:33 the interesting thing that we found in
97:35 

97:35 east asia is this
97:37 

97:37 not only did the government did
97:39 

97:39 do what
97:41 

97:41 mentioned
97:42 

97:42 uh
97:44 

97:44 it's time-bound support but in most
97:46 

97:46 cases later
97:48 

97:48 they allow the private sector to
97:50 

97:50 make their decisions and get into area
97:54 

97:54 then in the day korea they helped them
97:57 

97:57 want to put the decision where to invest
97:60 

97:60 and what to do was made by the private
98:02 

98:02 sector individual individuals by the
98:05 

98:05 industrialists so that's quite a
98:07 

98:07 different story from when the government
98:09 

98:09 gets involved in making these choices i
98:12 

98:12 am
98:13 

98:13 always very skeptical
98:15 

98:15 that public servants
98:17 

98:17 are people who can make that type of
98:19 

98:19 judgment and they should not be in it at
98:21 

98:21 all
98:24 

98:24 so thank you
98:25 

98:25 thank you very much dr rajpath
98:27 

98:27 um
98:29 

98:29 um mr ambassador if i could direct uh
98:32 

98:32 the next question to you uh
98:35 

98:35 it's quite clear now from from what
98:37 

98:37 we've heard from both yourself and from
98:39 

98:39 the other panelists uh that sri lanka
98:42 

98:42 hasn't quite taken full advantage of the
98:44 

98:44 gsp plus
98:46 

98:46 concession that and benefit that has
98:48 

98:48 been given to the country um
98:51 

98:51 in your opinion
98:52 

98:52 what is it that we can do to a
98:55 

98:55 take full advantage of this while we
98:57 

98:57 have it and and then also from the
99:00 

99:00 perspective of the eu that is uh uh
99:04 

99:04 uh
99:05 

99:05 that is as a as an entity a large
99:07 

99:07 trading body uh
99:10 

99:10 what is the
99:12 

99:12 do you kind of what are your comments on
99:14 

99:14 on on the direction the trade policy
99:16 

99:16 should be taking uh drawing from what
99:18 

99:18 our panelists have been discussing as
99:20 

99:20 well
99:22 

99:22 um that's not an easy question for an
99:25 

99:25 outsider to answer and i think that uh
99:29 

99:29 all uh the professors and doctors uh who
99:32 

99:32 are the current panelists have spoken at
99:35 

99:35 length on on what could be done as a
99:37 

99:37 practitioner um
99:40 

99:40 so as as someone who is perhaps more
99:42 

99:42 aware of the constraints of politics
99:45 

99:45 uh on the decisions to take
99:47 

99:47 um
99:48 

99:48 i would say two things the first one is
99:51 

99:51 obviously the eu
99:52 

99:52 and
99:53 

99:53 the best way to talk about an uh
99:55 

99:55 this kind of policy is is to to to
99:58 

99:58 rooted in empirical uh knowledge of the
100:01 

100:01 eu
100:02 

100:02 the the the different uh proposals made
100:07 

100:07 by professor corolla
100:10 

100:10 dr silva
100:11 

100:11 um has worked really well for the eu you
100:14 

100:14 know the eu after the second world war
100:16 

100:16 uh was pretty much uh in doldrums
100:19 

100:19 [Music]
100:21 

100:21 and the opening of trade has uh
100:24 

100:24 has benefited i mean globalization has
100:27 

100:27 benefited dramatically countries like
100:29 

100:29 china india but has also benefited to
100:31 

100:31 the eu
100:33 

100:33 but one of the big issue
100:35 

100:35 in the eu is to be able for the social
100:37 

100:37 system to redistribute the benefit of
100:39 

100:39 globalization to every citizen and
100:41 

100:41 that's something really of a domestic
100:44 

100:44 policy
100:45 

100:45 now
100:46 

100:46 um to move from quite a closed economy
100:51 

100:51 you know import restrictions uh issue of
100:54 

100:54 uh balance of payment
100:56 

100:56 [Music]
100:58 

100:58 a lot of red tape and things to a
100:59 

100:59 totally open
101:01 

101:01 economy
101:03 

101:03 cannot happen overnight and if it
101:05 

101:05 happened overnight you know there would
101:07 

101:07 be troubles riots uh
101:09 

101:09 and shocks
101:10 

101:10 um
101:11 

101:11 but it's really for the for the
101:13 

101:13 government to assess what is clear is
101:15 

101:15 that there are some uh
101:18 

101:18 lower hanging fruits i think in terms of
101:20 

101:20 dynamizing
101:22 

101:22 the trade and as uh
101:25 

101:25 dr rajapatirana said productivity is
101:28 

101:28 essential
101:29 

101:29 but productivity
101:31 

101:31 has to be articulated around
101:34 

101:34 the things that can slow down
101:36 

101:36 productivity and i'm here i'm talking
101:38 

101:38 about the stability of the logistics
101:40 

101:40 framework
101:41 

101:41 the reliability of the measures uh the
101:44 

101:44 administrative capacity so how the
101:46 

101:46 administration performs uh how it uh
101:49 

101:49 implements the rule
101:50 

101:50 um the capacity to move um quickly
101:54 

101:54 the logistics the the ports the the
101:56 

101:56 roads so there are lots of elements that
101:59 

101:59 are low-hanging fruits where
102:01 

102:01 um perhaps the state by by listening
102:03 

102:03 more to its entrepreneur to its business
102:05 

102:05 communities
102:07 

102:07 could improve the productivity and the
102:08 

102:08 competitiveness and i think it's for the
102:10 

102:10 business communities to make their voice
102:12 

102:12 heard and explain which are these
102:14 

102:14 low-hanging fruits things and and i
102:17 

102:17 think that this would pave the way for
102:19 

102:19 the measures that have been uh advocated
102:21 

102:21 by
102:22 

102:22 the prestigious speakers which is more
102:25 

102:25 trade openness by uh
102:27 

102:27 certainly doing away with import
102:29 

102:29 restrictions uh lowering uh tariffs and
102:32 

102:32 especially para tariffs which are hidden
102:34 

102:34 and are really a hindrance on
102:36 

102:36 competitiveness um
102:38 

102:38 but i think that it has to be
102:40 

102:40 a progressive way with a clear plan with
102:43 

102:43 a start uh middle and end that are
102:46 

102:46 thought through immediate measures that
102:48 

102:48 are implemented overnight uh
102:51 

102:51 disrupt uh economic life and therefore
102:54 

102:54 deters uh investors would be investors
102:56 

102:56 entrepreneurs
102:58 

102:58 so
102:59 

102:59 um
103:00 

103:00 it's not it's i'm not offering a lot of
103:04 

103:04 concrete uh
103:05 

103:05 examples but i'm trying to root what the
103:08 

103:08 previous speakers have said into a
103:10 

103:10 concrete experience start with clear
103:12 

103:12 low-hanging fruits in terms of
103:13 

103:13 productivity uh administer capacity
103:16 

103:16 legislative framework and then move with
103:18 

103:18 some ambitions on making the
103:20 

103:20 economy truly more open but it has to be
103:23 

103:23 progressive and it has to be also with
103:25 

103:25 due consideration to the monetary
103:27 

103:27 situation because one cannot uh have the
103:31 

103:31 trade policy in isolation uh from uh uh
103:34 

103:34 the overall economic situation and there
103:37 

103:37 the monetary uh
103:38 

103:38 situation has to be addressed at the
103:40 

103:40 same time or even prior to the trade
103:43 

103:43 opening
103:44 

103:44 thank you
103:47 

103:47 thank you very much uh mr ambassador um
103:49 

103:49 actually if i could uh dr dharat and
103:51 

103:51 silva if you could also
103:53 

103:53 uh jump in on that we've had a question
103:55 

103:55 uh that's very much in line with what
103:57 

103:57 the ambassadors just spoke on uh concern
103:60 

103:60 that okay if we abolish protectionism um
104:03 

104:03 we will gain new jobs but we some people
104:06 

104:06 would also lose their jobs and how do
104:08 

104:08 you address that
104:10 

104:10 address the the reality that some people
104:13 

104:13 are going to lose out
104:14 

104:14 at least initially
104:16 

104:16 when you
104:17 

104:17 start even if you do a gradual
104:19 

104:19 progression from uh from protectionism
104:22 

104:22 to
104:23 

104:23 an open economy
104:25 

104:25 would you be able to to
104:27 

104:27 to give us your thoughts on that
104:33 

104:33 thank you anita yes
104:35 

104:35 you know
104:36 

104:36 this is the
104:38 

104:38 um
104:39 

104:39 this is the natural tendency if you move
104:43 

104:43 away from the protection the free trade
104:46 

104:46 at the beginning
104:47 

104:47 at the very beginning
104:49 

104:49 [Music]
104:51 

104:51 there are cost
104:53 

104:53 right
104:54 

104:54 these cost
104:56 

104:56 could be in term of job losses
105:01 

105:01 or a certain adjustment
105:05 

105:05 um
105:07 

105:07 with that what will happen these are
105:09 

105:09 very short term
105:10 

105:10 in the long in the long run
105:13 

105:13 right long term benefits outweigh the
105:16 

105:16 short-term cost
105:18 

105:18 so we we know that it has happened in
105:21 

105:21 the east asian countries
105:23 

105:23 right
105:24 

105:24 now social is country like
105:26 

105:26 vietnam right i i was in geneva when
105:30 

105:30 this uh
105:32 

105:32 geneva you know the they try to what you
105:35 

105:35 call this uh getting the wto membership
105:38 

105:38 2007
105:40 

105:40 right
105:41 

105:41 um
105:43 

105:43 i i i i i had the time to engage with
105:47 

105:47 these negotiators how painful that would
105:50 

105:50 be
105:51 

105:51 right
105:52 

105:52 right but vietnam was in a kind of a
105:55 

105:55 liberalization food part you know
105:57 

105:57 they that that happened but in the
106:00 

106:00 uh
106:01 

106:01 short term
106:03 

106:03 until 2012 they had you know some pain
106:06 

106:06 but in the long run now i mean 2007 when
106:10 

106:10 they
106:11 

106:11 acceded to the wto it took about 10
106:13 

106:13 years to get into the wgo
106:15 

106:15 1995 they submit the application
106:19 

106:19 to that time the exports earnings were
106:21 

106:21 hardly 6 billion yes
106:23 

106:23 and 2007 about
106:26 

106:26 50 billion now they gone to uh 280
106:29 

106:29 billion so you must have
106:32 

106:32 what i say
106:33 

106:33 is a long term vision for your trade
106:36 

106:36 policy
106:37 

106:37 right
106:38 

106:38 without a long-term policy
106:41 

106:41 uh but uh we you know that won't work so
106:45 

106:45 there are costs gained but
106:47 

106:47 long-term
106:48 

106:48 benefits outpace the short-term losses
106:51 

106:51 this is
106:52 

106:52 my uh on the dsp plus if you have you
106:55 

106:55 know what is the main problem is you
106:56 

106:56 know the sri lanka
106:58 

106:58 um
106:60 

106:60 you know the
107:01 

107:01 the it is again the supply size capacity
107:04 

107:04 constraint 66 percent of the
107:07 

107:07 you know the eu tariff lines
107:10 

107:10 you know you know it's a unilateral
107:12 

107:12 concession
107:13 

107:13 right sri lanka enjoy
107:15 

107:15 uh duty access
107:18 

107:18 right we lost the gsp plus 2001 had we
107:21 

107:21 continue that
107:23 

107:23 you know you know the last years seven
107:25 

107:25 years we would have been
107:28 

107:28 better better position
107:30 

107:30 the unfortunately but also there is the
107:32 

107:32 issue of this rules of origin rules of
107:34 

107:34 origin now bangladesh was mentioned
107:36 

107:36 bangladesh of course mainly uh i have
107:39 

107:39 mentioned in the recent gsp plus seminar
107:42 

107:42 is what they are
107:44 

107:44 uh required to fulfill what you call the
107:47 

107:47 single transformation
107:48 

107:48 uh of rules of points about sri lanka a
107:51 

107:51 country like a double tongue which is
107:53 

107:53 very stringent right and the
107:56 

107:56 utilization of the gsp plus these
107:58 

107:58 recorders the lowest in the apparel
108:00 

108:00 indus
108:02 

108:02 it is not something to do with the
108:04 

108:04 awareness apparel sector is the most
108:07 

108:07 vibrant they know what they consistent
108:09 

108:09 where about the preferential axis are is
108:12 

108:12 the rules of origination
108:13 

108:13 well that's a brief reflection
108:16 

108:16 yeah
108:29 

108:29 reforms delayed
108:30 

108:30 also means benefits are delayed
108:34 

108:34 so in sri lanka like in 1977
108:37 

108:37 it was done
108:38 

108:38 without there was some preparation i
108:40 

108:40 know that professional
108:42 

108:42 but you know if you have a plan
108:45 

108:45 and if you tell the public the age of
108:48 

108:48 the coming agents
108:50 

108:50 your program of first is to get rid of
108:52 

108:52 uh
108:55 

108:55 if the next thing mixtape is to go
108:57 

108:57 stages by reducing give them fair
108:59 

108:59 warning to people who
109:01 

109:01 will operate in an open economy okay
109:04 

109:04 people are waiting for the opportunity
109:06 

109:06 so
109:07 

109:07 it is true that we cannot do it all of a
109:08 

109:08 sudden we have some preparation in 1977
109:12 

109:12 and what happened it worked very well
109:14 

109:14 till
109:15 

109:15 uh some some
109:17 

109:17 why our valencia did not fully take
109:21 

109:21 give all the benefits is that at the
109:23 

109:23 same time we started mohammed
109:25 

109:25 so excuse me so mahaveli became a real
109:28 

109:28 uh thing that changed the incentives
109:32 

109:32 created what later
109:34 

109:34 coordinated them called the dutch
109:35 

109:35 disease problem arose because of the
109:38 

109:38 inflow of capital not for mahali so
109:41 

109:41 while we were trying to improve our
109:43 

109:43 tradable sectors with the proper
109:45 

109:45 exchange policy and all that on the
109:47 

109:47 other hand the imports of a large amount
109:50 

109:50 of foreign exchange led to uh
109:53 

109:53 go into the opposite direction so i'm
109:56 

109:56 for
109:57 

109:57 i'm not saying you can do it in
109:60 

109:60 very short time but
110:02 

110:02 it can be done within reasonable time so
110:04 

110:04 that the markets learn
110:05 

110:05 that the new opportunities are going to
110:07 

110:07 arise in the system
110:13 

110:13 thank you dr rajpath i think professor
110:16 

110:16 corolla wants to weigh in on this
110:19 

110:19 yeah
110:21 

110:21 because this is a very important issue i
110:23 

110:23 think somebody had asked whether when
110:26 

110:26 tariff is video there can be employment
110:29 

110:29 losses right and then
110:32 

110:32 that is
110:33 

110:33 electorate told us of that issue
110:36 

110:36 therefore i think we have to be very
110:38 

110:38 careful on this
110:40 

110:40 now
110:41 

110:41 we need to give examples from our own
110:44 

110:44 past to highlight this point actually
110:48 

110:48 when i first wrote my first article
110:52 

110:52 about sri lankan liberalization
110:54 

110:54 i was basically lamenting about
110:57 

110:57 employment losses uh you can have a look
110:60 

110:60 at it in upanita first issue i wrote an
111:04 

111:04 article
111:05 

111:05 about
111:06 

111:06 50 000 girls
111:09 

111:09 losing jobs in handloom factories right
111:13 

111:13 and
111:14 

111:14 look at what happened the ready-made
111:17 

111:17 government industry is
111:20 

111:20 paid in more than half a million jobs
111:22 

111:22 elise and loss
111:25 

111:25 we exaggerated
111:28 

111:28 but
111:29 

111:29 eventually it paid off
111:32 

111:32 april industry
111:37 

111:37 becoming the biggest employment
111:39 

111:39 generator in the country
111:41 

111:41 now
111:43 

111:43 according to date i have analyzed
111:46 

111:46 manufacturing employment in 1975
111:50 

111:50 that was the height of the state-led
111:53 

111:53 import structuration uh
111:55 

111:55 industrialization was
111:58 

111:58 404 thousand
112:00 

112:00 right
112:02 

112:02 now
112:03 

112:03 manufacturing employee is
112:05 

112:05 more than one point five million
112:08 

112:08 uh as dragon button said there are
112:11 

112:11 problems with
112:13 

112:13 liberalization but
112:15 

112:15 liberalization worked to make the
112:18 

112:18 manufacturing sector a major employment
112:22 

112:22 generator and again look at the type of
112:24 

112:24 jobs most of the jobs created
112:28 

112:28 in the
112:29 

112:29 government-owned factories were very
112:32 

112:32 expensive according to again i calculate
112:35 

112:35 this data
112:37 

112:37 from a study compiled by professor
112:39 

112:39 laxman and team
112:41 

112:41 51 000 rupees for one job
112:46 

112:46 if you convert it into current prices it
112:49 

112:49 would be about 3.5 million dollars the
112:52 

112:52 creating one job in protectionist
112:55 

112:55 industries was very expensive but
112:59 

112:59 in labor intensive manufacturing
113:02 

113:02 so many jobs were created but at a low
113:06 

113:06 cost
113:08 

113:08 this is the
113:10 

113:10 message we should give to the waters
113:13 

113:13 about liberty now relating to that
113:17 

113:17 when we talk about liberalization we are
113:20 

113:20 not talking about reducing uh trade
113:23 

113:23 barriers only as dr rajapatna said it
113:27 

113:27 has to be a package
113:29 

113:29 import liberalization has to be combined
113:32 

113:32 but with a realistic exchange rate
113:34 

113:34 policy uh in order to maintain
113:37 

113:37 export competitiveness what have
113:40 

113:40 happened in sri lanka is that economy is
113:43 

113:43 open
113:44 

113:44 but
113:45 

113:45 agent rate
113:46 

113:46 continue to appreciate the re-election
113:49 

113:49 index in 2019
113:52 

113:52 is only about 1 16 of the real election
113:55 

113:55 rate index in
113:57 

113:57 1978 right we liberalized
114:01 

114:01 but we did not stabilize the country
114:04 

114:04 and the real estate rate appreciated
114:06 

114:06 even with all these problems why export
114:11 

114:11 led
114:12 

114:12 industrialization
114:14 

114:14 perform better in employment generation
114:18 

114:18 one should not forget this fact unlike
114:21 

114:21 in many other countries
114:23 

114:23 our trade liberation was combined with
114:26 

114:26 foreign investment liberalization they
114:30 

114:30 went hand in hand trade reform and fdi
114:33 

114:33 reform
114:34 

114:34 because of the fdi reform foreign
114:37 

114:37 investors came
114:38 

114:38 martin trust came to sri lanka
114:41 

114:41 as a foreign buyer and he created
114:45 

114:45 two giant export
114:47 

114:47 powerhouses brandix and uh
114:51 

114:51 mars right this thing happened mainly
114:55 

114:55 because of the investment liberalization
114:57 

114:57 do if you want you can talk to mahi
115:00 

115:00 shamelin or astropuma they will tell the
115:03 

115:03 story we liberalize we liberalize
115:06 

115:06 foreign investment regime together it
115:09 

115:09 help us to achieve a lot but imagine
115:13 

115:13 without going into maha valley telescope
115:16 

115:16 in it to six years
115:18 

115:18 maintain
115:19 

115:19 uh
115:20 

115:20 macroeconomic stability we would have
115:22 

115:22 even avoided the civil war i mean i read
115:26 

115:26 this beautiful story in
115:29 

115:29 liquid new biography
115:32 

115:32 sri lanka
115:33 

115:33 unp won the election they
115:36 

115:36 introduced liberalization reform he was
115:38 

115:38 very happy because lee kuan yew has a
115:42 

115:42 big relationship with
115:44 

115:44 sri lanka because his father
115:46 

115:46 worked for a sri lankan jeweler in uh
115:51 

115:51 therefore when the country was
115:53 

115:53 liberalized he was happy he gave half a
115:57 

115:57 day interview for
115:59 

115:59 president
116:04 

116:04 in the book he says
116:07 

116:07 uh president came and talked about uh
116:10 

116:10 opening friday zone uh land areas like
116:13 

116:13 singapore and everything and i was very
116:16 

116:16 happy
116:17 

116:17 then he said president started talking
116:20 

116:20 about national airlines
116:22 

116:22 then he asked the question president
116:26 

116:26 at this stage should that be the
116:28 

116:28 priority we develop an airport much
116:31 

116:31 later you need to provide the
116:34 

116:34 infrastructure and maintain the
116:36 

116:36 incentive structure to promote export
116:39 

116:39 now this is where
116:41 

116:41 the performance
116:42 

116:42 party
116:44 

116:44 did not understand the point i mean the
116:47 

116:47 ump did a fine job in opening the
116:50 

116:50 economy until the opening economy was
116:53 

116:53 done not because of world bank advice
116:56 

116:56 but because of policy recommendation
116:59 

116:59 made by an important indian economist uh
117:03 

117:03 we are uh
117:06 

117:06 yeah i i have foreign i mean a lot of
117:08 

117:08 people who criticize world bank don't
117:11 

117:11 know this story yeah we are shinoing his
117:15 

117:15 report which is in
117:18 

117:18 their library both the policy blueprint
117:22 

117:22 for their reform actually he advocated
117:25 

117:25 liberalization with macroeconomic
117:27 

117:27 stabilization
117:29 

117:29 government liberalized but did not
117:32 

117:32 stabilize that was the problem then now
117:35 

117:35 people blame the world bank and imf uh
117:39 

117:39 world bank if you read world bank report
117:41 

117:41 sir uh sarah knows all this world bank
117:44 

117:44 objected to this massive investment
117:48 

117:48 package at that time but the government
117:51 

117:51 said no we are going to get foreign
117:54 

117:54 therefore we are going to implement it
117:57 

117:57 and by doing that incentive structure
117:60 

117:60 was distorted then
118:02 

118:02 the point i am going to make is that
118:05 

118:05 liberalization would have done wonders
118:08 

118:08 in sri lanka if it were combined with
118:12 

118:12 macroeconomic reforms like uh beers you
118:15 

118:15 know educated right but we did not do it
118:19 

118:19 yeah that is the big lesson thank you
118:23 

118:23 thank you very much professor
118:25 

118:25 i think we are now uh very close to
118:27 

118:27 running out of time but we have a few
118:29 

118:29 more questions that have come in from
118:30 

118:30 the audience um if i could ask uh
118:33 

118:33 that the panelists keep their responses
118:35 

118:35 as brief as possible um dr rajpath if i
118:39 

118:39 could ask you
118:40 

118:40 one of the questions that have come in
118:41 

118:41 is uh
118:42 

118:42 [Music]
118:44 

118:44 very rooted in in in the economic
118:46 

118:46 situation right now in sri lanka
118:49 

118:49 what's the solution in a pandemic when a
118:52 

118:52 country is short of foreign exchange as
118:54 

118:54 open trade would lead to not having
118:56 

118:56 reserves to pay for uncontrolled imports
118:59 

118:59 is the question that was sent in uh
119:02 

119:02 would you be able to to tackle that for
119:04 

119:04 us
119:09 

119:09 cleveland's here to say try not to get
119:11 

119:11 into it
119:12 

119:12 but actually we are there
119:15 

119:15 there are other there are a number of
119:16 

119:16 ways to do it
119:18 

119:18 uh first of all i would say
119:20 

119:20 in the past when we he was such as we
119:22 

119:22 were in such situations
119:25 

119:25 for some reason we don't want to go
119:26 

119:26 there anymore
119:28 

119:28 they rescued us 16 times in such
119:30 

119:30 situations and now with huge amount of
119:33 

119:33 debt
119:34 

119:34 which we did not have before we have not
119:36 

119:36 prepared to go
119:37 

119:37 now the imf is important not because of
119:40 

119:40 the money they give
119:42 

119:42 much more importantly the discipline it
119:44 

119:44 will put into our system
119:46 

119:46 so if for example if we
119:49 

119:49 have a program shall we say we have
119:50 

119:50 program exactly like the imf
119:53 

119:53 that is
119:54 

119:54 cutting demand cutting demand down
119:56 

119:56 removing barriers to supply
119:58 

119:58 uh
119:60 

119:60 supply expansion uh have extended that
120:03 

120:03 is uh
120:06 

120:06 completely extended then we can go some
120:08 

120:08 other way and also we can convince our
120:11 

120:11 debtors and now would be debtors that we
120:13 

120:13 we will be
120:14 

120:14 disciplined and we will do a good job
120:18 

120:18 uh in uh
120:20 

120:20 as a as a person as a country that can
120:23 

120:23 repay its debt and
120:25 

120:25 which we have done so far thanks to the
120:27 

120:27 imf so now some people say
120:30 

120:30 uh imf
120:32 

120:32 uh programs are failed
120:35 

120:35 actually it's not the imf program that
120:37 

120:37 we failed
120:38 

120:38 we never met the imf
120:41 

120:41 uh criteria that was said for us in
120:43 

120:43 terms of demonstrating as asset
120:45 

120:45 expansion and those things so i would
120:47 

120:47 say we are in a very tight situation
120:49 

120:49 in this situation all economy that of my
120:52 

120:52 court that i know would say go to the
120:55 

120:55 imf
120:56 

120:56 because you have to pay a larger
120:58 

120:58 premium price if you didn't in the sense
121:01 

121:01 that
121:02 

121:02 then we'll have to cut down
121:04 

121:04 uh imports even further
121:07 

121:07 we are our then the government's other
121:10 

121:10 policies
121:11 

121:11 uh
121:12 

121:12 also won't help like banning this that
121:14 

121:14 and the other
121:16 

121:16 uh
121:17 

121:17 and so i would say we are a typical
121:18 

121:18 question but it's not impossible
121:20 

121:20 question
121:21 

121:21 we can if you can get uh imf support you
121:24 

121:24 can do it
121:25 

121:25 the thing is that um
121:28 

121:28 it is the
121:29 

121:29 least cost or on low cost way of doing
121:32 

121:32 it i won't say least low score we are
121:33 

121:33 doing it
121:35 

121:35 uh if you are not private do it then we
121:37 

121:37 have a very high cost in terms of
121:40 

121:40 not having funds not only having a
121:42 

121:42 disability not having funds
121:44 

121:44 uh then we have to introduce various
121:46 

121:46 other controls
121:48 

121:48 from which we can't get out easily
121:50 

121:50 that's the point
121:51 

121:51 if you move away from taking advantage
121:54 

121:54 of the
121:56 

121:56 our location opposition to be
121:59 

121:59 participating world trade
122:01 

122:01 then our chances are all reduced
122:05 

122:05 what we can go from
122:06 

122:06 bad to us in those circumstances
122:09 

122:09 so
122:11 

122:11 so that is my go to the imf have a
122:13 

122:13 program
122:17 

122:17 get to get your
122:19 

122:19 people together to develop a good team
122:21 

122:21 who can handle this
122:23 

122:23 uh
122:24 

122:24 who has experience having done this and
122:26 

122:26 can be done so
122:28 

122:28 thank you yeah
122:29 

122:29 actually it is so tempting to add one
122:32 

122:32 point to dr
122:34 

122:34 what dr rajapatma said i agree with
122:37 

122:37 everything and i want to give an example
122:40 

122:40 dr emperor
122:42 

122:42 even though his
122:44 

122:44 economic policies we criticize he was a
122:47 

122:47 very intelligent amine statement right
122:51 

122:51 uh in his budget speech in uh
122:54 

122:54 1970 i have this
122:57 

122:57 quotation i don't
122:59 

122:59 he clearly said that small open economy
123:03 

123:03 like sri lanka
123:04 

123:04 cannot ignore international organization
123:09 

123:09 he
123:10 

123:10 went to imf in 1964
123:14 

123:14 as part of the coalition government but
123:16 

123:16 he failed
123:17 

123:17 getting loans
123:19 

123:19 uh i have even got his speech right he
123:22 

123:22 could not get it because at that time
123:25 

123:25 because of politics they they could not
123:28 

123:28 come up with a sensible package to
123:31 

123:31 reduce government expenditure therefore
123:33 

123:33 they could then he went to imf in 1977
123:38 

123:38 70. at that time central bank has had a
123:43 

123:43 visionary governor
123:45 

123:45 herbert tenacon
123:47 

123:47 treachery
123:48 

123:48 rajendran world-class technocrats these
123:52 

123:52 two helped drain empire
123:55 

123:55 to come up with the proposal and the imf
123:58 

123:58 was convinced they they convinced the
124:01 

124:01 imminent saying that uh we will continue
124:05 

124:05 with our stately industrial at that time
124:08 

124:08 actually it was accepted by imf right
124:11 

124:11 import substitution another thing but
124:13 

124:13 they came up with the clear plan to
124:16 

124:16 reduce the budget speed deficit
124:19 

124:19 therefore they got a loan
124:22 

124:22 then what happened was in 2004 in them
124:26 

124:26 prepared another proposal i mean if you
124:28 

124:28 don't i can do document don't ask how i
124:31 

124:31 got all this
124:33 

124:33 then what happened was by the time he
124:36 

124:36 was negotiating them uh he was i think
124:40 

124:40 losses
124:41 

124:41 cabinet post or something it did not
124:43 

124:43 happen then the point i made
124:46 

124:46 is that if a
124:49 

124:49 real statement i think he has to do
124:52 

124:52 he had delete from lsc right he was a
124:55 

124:55 bright
124:56 

124:56 politician
124:58 

124:58 he
124:59 

124:59 understood the importance of imf but
125:02 

125:02 people who run this country now
125:05 

125:05 i think they don't know this history
125:07 

125:07 yeah that's the point i want to okay
125:11 

125:11 dr silva if you would like to uh comment
125:15 

125:15 on that
125:17 

125:17 on the on
125:19 

125:19 if you would like to comment on on the
125:22 

125:22 points raised by dr raj patarana and uh
125:24 

125:24 professor gorilla
125:30 

125:30 yeah you're muted sir um unless you are
125:38 

125:38 okay that's
125:40 

125:40 well
125:41 

125:41 i i
125:44 

125:44 i totally agree with what uh
125:48 

125:48 atagorilla said
125:52 

125:52 well i
125:54 

125:54 also don't understand
125:56 

125:56 are we waiting until the water goes
125:58 

125:58 above the doors
125:60 

125:60 to go to the
126:01 

126:01 seek support i mean the result is the
126:04 

126:04 current crisis
126:06 

126:06 so
126:07 

126:07 it's totally
126:08 

126:08 ugly but there are nothing question that
126:11 

126:11 has been raised here in the anyway you
126:13 

126:13 can
126:14 

126:14 you want to ask oh do you want me to
126:16 

126:16 reflect on this um is there something in
126:19 

126:19 particular you want to address sir if
126:21 

126:21 you can address it briefly because we
126:23 

126:23 are running out of time questions yeah
126:26 

126:26 asking
126:28 

126:28 one is asking is there any possibility
126:30 

126:30 that sri lanka faces wto
126:34 

126:34 uh
126:35 

126:35 sort of uh dispute panel because of the
126:38 

126:38 quantitative ethics sure sir if you
126:40 

126:40 would like to tackle just that question
126:42 

126:42 since we are running out of time uh if
126:44 

126:44 you would like to tackle that
126:46 

126:46 question
126:47 

126:47 yes indeed you know now
126:49 

126:49 um
126:51 

126:51 you know quantitative restriction as i
126:53 

126:53 said to answer the questions are
126:54 

126:54 prohibited but there are exceptions like
126:57 

126:57 two
127:00 

127:00 reason than the economic reason economic
127:03 

127:03 reasons are
127:04 

127:04 uh there are five one mainly the bop you
127:06 

127:06 know the
127:08 

127:08 bop reason right but i recall in 1998
127:13 

127:13 sri lanka
127:15 

127:15 discreet work
127:17 

127:17 employing this
127:19 

127:19 balance of payment
127:21 

127:21 you know difficulty but wta members are
127:24 

127:24 very sensible they
127:26 

127:26 sensitive to the discovered situation
127:29 

127:29 but
127:30 

127:30 the only question is
127:33 

127:33 see and you know this even you are
127:35 

127:35 applying the bop
127:37 

127:37 provisions
127:38 

127:38 right
127:39 

127:39 um you need to follow the procedures
127:42 

127:42 first and foremost you have to notify to
127:44 

127:44 the wto right and then you must
127:48 

127:48 indeed notifying
127:50 

127:50 you have to set this time table
127:52 

127:52 okay but how they are going to
127:55 

127:55 kind of remove them
127:57 

127:57 and then engage in the construction i
127:60 

127:60 doubt
128:01 

128:01 i doubt whether these procedures have
128:03 

128:03 been followed
128:04 

128:04 um if not
128:06 

128:06 well
128:07 

128:07 we are in a club you know we have
128:09 

128:09 participated negotiation it is possible
128:12 

128:12 that to happen finally you know one
128:14 

128:14 question is this uh very quickly why you
128:17 

128:17 know you know achieve that country some
128:20 

128:20 you know the later
128:21 

128:21 how broke does very well this is true
128:24 

128:24 cambodia is here in 2004 they exceeded
128:27 

128:27 they were broke as well because they and
128:30 

128:30 vietnam also these countries
128:33 

128:33 have progressed well because they were
128:35 

128:35 forced to undertake and vietnam was
128:37 

128:37 supposed to bind their 100 tariff
128:41 

128:41 and buying them at 35 percent uh you
128:44 

128:44 know so it's uh
128:46 

128:46 the reform agenda that has they have
128:49 

128:49 undertaken as part of the wto commitment
128:52 

128:52 resulted
128:53 

128:53 partly
128:55 

128:55 in progressing
128:56 

128:56 um well in the export front and the
128:59 

128:59 domestically thank you thank you thank
129:01 

129:01 you very much dr silva
129:03 

129:03 professor atukarala if i could direct
129:05 

129:05 one last question to you that has come
129:07 

129:07 from the audience uh there is a lot of
129:10 

129:10 uh
129:11 

129:11 debate and also a bit of confusion on
129:14 

129:14 the topic of industrial policy and
129:16 

129:16 whether it is a what it is in fact i
129:19 

129:19 think that is something that needs to be
129:21 

129:21 clarified and then what what
129:24 

129:24 what is it a solution for sri lanka um
129:27 

129:27 and if you could
129:29 

129:29 very briefly comment on that
129:31 

129:31 it would be greatly appreciated
129:41 

129:41 okay i think maybe professor coral is
129:43 

129:43 facing some technical challenges
129:46 

129:46 i think we have now run uh quite over
129:49 

129:49 time um
129:50 

129:50 i would like to call uh colin the
129:52 

129:52 ambassador uh hc dennis chibi if you
129:55 

129:55 would like to make uh any final comments
129:59 

129:59 no i just uh would like to thank you and
130:02 

130:02 all the participants to this debate i
130:04 

130:04 think
130:05 

130:05 it was lively and um allowed for a good
130:08 

130:08 exchange and
130:10 

130:10 we we will work now very much on the
130:12 

130:12 monitoring of the gsp plus and then
130:14 

130:14 continue
130:16 

130:16 the conversation with the government
130:17 

130:17 about the import restrictions which are
130:19 

130:19 concerned for us thank you
130:22 

130:22 thank you very much
130:24 

130:24 so today's event has been live streamed
130:27 

130:27 on the following pages it's been
130:28 

130:28 available on the morning the morning
130:30 

130:30 business sri lanka students for liberty
130:33 

130:33 newshub dot okay english economy next
130:36 

130:36 echelon business news dot lk citizen wlk
130:39 

130:39 other economy and business and economy
130:42 

130:42 and business sri lanka uh i would like
130:44 

130:44 to thank our panelists for giving that
130:47 

130:47 time today uh quite a bit of their time
130:49 

130:49 i must say um and for contributing to
130:52 

130:52 what was
130:53 

130:53 very interesting and uh
130:55 

130:55 engaging discussion on a topic that is
130:58 

130:58 very much
130:59 

130:59 current and of the utmost importance to
131:01 

131:01 sri lanka at this point um
131:04 

131:04 i would also like to thank our
131:05 

131:05 interpreters who made it possible for
131:06 

131:06 this event to be accessible in all three
131:08 

131:08 languages on zoom thank you very much
131:11 

131:11 that is much appreciated um if you're
131:13 

131:13 interested in learning more on this
131:15 

131:15 topic uh the primer by dr sarat rajapat
131:18 

131:18 on international trade from theory to
131:20 

131:20 policy sri lanka in perspective can be
131:23 

131:23 found on our facebook our youtube and
131:25 

131:25 all our social media um do take some
131:28 

131:28 time to uh check this out and while you
131:31 

131:31 are there please follow us on our social
131:33 

131:33 media platforms there will be a screen
131:36 

131:36 appearing uh on there will be a slight
131:38 

131:38 appearing on your screens in a minute uh
131:41 

131:41 and stay updated on our events on our
131:44 

131:44 publications and of course uh our policy
131:48 

131:48 analysis on what is happening in sri
131:50 

131:50 lanka's economy
131:52 

131:52 i'd like to thank our audience today
131:54 

131:54 i hope everyone will stay safe and
131:58 

131:58 good night