Sri Lanka’s EDB says country’s downgrading a blessing in disguise to gain preferential access
The Export Development Board (EDB) of Sri Lanka has reportedly noted that the recent downgrading of Sri Lanka to a lower-middle income country by the World Bank could be a blessing in disguise to secure preferential access to key exports of EU and the US.
The World Bank last week downgraded Sri Lanka from an upper-middle income country to a lower-middle income one from 1 July, under its 2020-2021 country classification by income level.
“The downgrade is a blessing in disguise for the export community. It is good for the continuation of European Union’s (EU) Generalised Scheme of Preferences Plus (GSP+) for another four and a half years,” EDB Chairman Prabhash Subasinghe has told the Daily FT.
The EU remains Sri Lanka’s largest export market, accounting for 30% of the total, while the US is the largest single export market, accounting for 27% of total of total merchandise exports last year and nearly 60% of Sri Lankan exports benefit from some form of preferential access due to EU GSP+ and US GSP schemes, the Daily FT news report states.
Sri Lanka’s total merchandise and service exports in 2019 were US$ 16.14 billion, up by 1.44% from 2018. Merchandise exports totalled US$ 11.9 billion, up 0.13% and service exports US$ 4.2 billion, up by 5.3% from 2018.
In January, the EU delegation in Sri Lanka reassured that it will continue the GSP+ concessions to Sri Lanka till 2023, while noting that there will be ‘no changes’ in the rigorous monitoring of the country’s progress in implementing the conventions.
The downgrading of Sri Lanka by the World Bank is expected to have some positive impacts that would result in the boosting of the country economy. Sri Lanka currently enjoys many trade agreements as well as trade concessions and these facilities are expected to increase in the future. Such a scenario would give Sri Lanka the edge to compete in the global exports market. This would create many business/investment opportunities in Sri Lanka’s manufacturing sector. Also, Sri Lanka’s geographical positioning in the Indian Ocean and ease of doing business environment in the country have helped the island position itself as a business hub in the South Asian region.
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