Emphasizes need for a long term aid and trade package for Sri Lanka’s rehabilitation and reconstruction

Ambassador Devinda R. Subasinghe addressed U.S. corporate executives at a forum on “Post-Tsunami Reconstruction” organized by the U.S. Chamber of Commerce, on 18th January 2005, with the participation of ambassadors from the Tsunami affected countries, along with senior officials from the U.S. government and multilateral organizations, to discuss the ways in which the U.S. business community can marshal its expertise and capabilities to assist in the reconstruction effort in these nations.

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Making a presentation entitled “Country Assessment: Reconstruction and Rehabilitation of Tsunami Affected Areas in Sri Lanka”, Ambassador Subasinghe provided an overview of the magnitude of the disaster and recognized India and the US for their response in the immediate aftermath and that of the international community. Describing that 70% of the Southern and Eastern coastline was affected with major infrastructure, including infrastructure that supported the tourism industry being critically damaged, he emphasized the need to set up an “Tsunami Early Warning System” for the Indian Ocean countries.

Ambassador Subasinghe explained the massive immediate, medium and long term US$ 3.5 billion Rehabilitation and Reconstruction Plan for rebuilding the nation. This envisages plans for the reconstruction and re-planning of roads, rail, bus transport, utilities (electricity, water supply and sanitation, telecom) ports, education sector, health centers, housing and township development, schools, tourism infrastructure, environmental clean-up and judicial infrastructure. (See : www.cnosrilanka.org) Pointing out that the rebuilding requirements, detailed in the Action Plan, make for very attractive long term projects for international investors, Ambassador Subasinghe called for greater US business participation in the post-Tsunami development in Sri Lanka.

Ambassador Subasinghe said that the burden of economic recovery for 2005 and beyond rested primarily with the domestic private sector. While he was confident that the private sector would do well in the long run, he stressed that temporary tariff relief measures for Sri Lankan exports is a way to mitigate the effects of the tsunami on Sri Lanka’s tourism, fisheries, agricultural and small business sectors. Representatives on the panel endorsed his view and it was noted that moves are underway in the US Congress to legislate temporary trade relief measures for the Tsunami affected countries including Sri Lanka.

Ambassador Subasinghe elaborating on the necessity to grant market access for Sri Lanka’s exports to the U.S. said “the duties paid on Sri Lankan apparel exports to the U.S. in 2003 were $238.5 million, which was more than the total duties paid on every product exported to the U.S. from all six Scandinavian countries that same year.” He also added “The average U.S. duty rate on products from those rich Scandinavian countries is about 1% while the average rate on Sri Lankan goods is 13% to 17%.”

Mr. Thomas Donohue, President and CEO of the U.S. Chamber of Commerce, commented on the relief and reconstruction efforts and outlined a five point reconstruction blueprint that identified aid, trade, investment, information sharing and regional facilitation initiatives as key drivers for long-term development of the region. Urging the U.S. Administration and Congress to work with the multilateral community on a trade relief package that would temporarily reduce tariff on key exports from the affected countries, Donohue said “Here in the United States, we also determine how we might expand the GSP program for these countries. Other avenues to consider would be to accelerated trade and investment talks with Sri Lanka, Indonesia and Thailand - all countries that currently have Trade and Investment Framework Agreements (TIFA) in place with the United States.”

Ambassador Andrew S. Natsios, Administrator of U.S. Agency for International Development, delivering the keynote speech, relayed his experience of visiting the tsunami affected countries and spoke in detail about the role of USAID in the relief and recovery process.

The Ambassadors of Indonesia, Thailand, and a senior diplomat from Indian Embassy also addressed the Forum, which was well attended by over 200 U.S. Corporate executives from leading U.S. companies. Mr. Alan P. Larson, Under Secretary of State for Economic, Business and Agriculture Affairs, U.S. Department of State, Mr. David Lockwood, Deputy Director, Regional Bureau of the Asia-Pacific, United Nations Development Program (UNDP), Mr. Ross J. Connelly, Executive Vice President, U.S. Overseas Private Investment Corporation (OPIC), Mr. Steven Dunaway, Deputy Director, Asia Pacific, International Monetary Fund, Mr. Alstair J. McKechnie, Country Director and South Asia Regional Programs, The World Bank also participated in the panel discussions.

Embassy of Sri Lanka
Washington DC
USA

18 January 2005