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Village blue chips for global giants
Kadir invites foreign investors to uplift rural economy
Ameen Izzadeen reporting from London
The UPFA government has heeded the message from the people at the last general election and is particularly interested in foreign investment for Sri Lanka's rural economy, Foreign Minister Lakshman Kadirgamar said after meetings in London with some of London's top corporate figures. In an interview with The Sunday Times during his London visit where he held intensive talks on political and economic issues, Mr. Kadirgamar said that in response to his initiative a British sugar giant was showing interest in sugar cultivation in Sri Lanka while another company wanted to set up a fishing school in the South to teach advanced techniques to fisherfolk. Mr. Kadirgamar said he had assured investors that they need not have any fears about the JVP because the major ally in the UPFA government welcomed foreign investment especially in the rural economy though it also insisted on openness, transparency and responsibility.

Mr. Kadirgamar also expressed optimism that peace talks with the LTTE and the defence cooperation agreement with India would be a reality soon.
Excerpts from the interview:

Trade and investment have been among the hallmaks of your foreign ministership. How successful have you been in allaying the fears of British investors with regard to the current situation in Sri Lanka?
I met representatives of about ten companies. I gave them an overview of the government's economic policy on investment. I told them what was on offer. I told them investors are free to come and invest in anything. But I also told them that the government was particularly interested in investment in the rural economy. This is because the government has heeded the political message in the general election results.

The British CEOs asked about procedures and opportunities with regard to investment. I told them that the Foreign Ministry was like an inside three quarter in a rugby team, creating an opening and passing the ball. In response, the British Sugar giant Booker Tate showed keen interest in sugar cultivation in Sri Lanka. There was another company, which wanted to invest in a fishing school in the South to teach local fishermen hi-tech fishing methods. This will enable the local fishermen, who are hit by foreign fishing vessels operating in our waters, to stay in their traditional business. The Commerze Bank said it wanted to visit Sri Lanka on a study tour while a big Northern-Ireland based company dealing in innovations and technology transfer also showed a keen interest in investing in Sri Lanka.

Some businessmen asked about infrastructure investments. I told them about government plans with regard to various expressways and a port project in Hambantota. They also asked about the funding that we receive from the World Bank, the IMF and the ADB. The fact that all financial institutions are dealing with Sri Lanka is a reassurance to the private sector. Overall, the picture is one of hope.

Did they express any fears with regard to the presence of the anit-capitalist JVP in the ruling alliance?
They did not ask about the JVP. But I brought up the JVP factor and explained the JVP's policy on investment. I told them that the JVP MPs are holding important ministries that play a vital role in development of the rural economy. I told them that the JVP was certainly not averse to investments, but was very particular about openness and transparency in government dealings with investors.

When you met British Foreign Secretary Jack Straw, you sought the British government's support to overcome certain negative effects of the multi-fibre agreement (MFA) with its lapse at the end of the year. What was his response?
During my official visit, I raised this matter twice. First with Secretary of state for Foreign and Commonwealth Affairs Mike O'Brien who is also the secretary of state for trade. I expressed our concern over the adverse affects of the demise of MFA on our apparel exports. {the quota system will come to an end at the end of the year with the lapse of the MFA}. They advised us to make a submission. But we had gone prepared with a submission. So when I met Mr. Straw, I told them, I had already done it. Mr. Straw assured me that the British government would look into it. We approached Britain, because it is to assume the chairmanship of the EU in a couple of month's time. We have to lobby as many EU members as possible to achieve some concessions for our apparel exporters.

During my talks with Mr. Straw, I also sought Britain's help in training our English teachers who will teach university students. This request was made in sequence to a meeting I had with student leaders of the Inter-University Student Federation recently. Minsters Mangala Samaraweera and Dinesh Gunewardene were also present in their capacities as deputy ministers in charge of education at that meeting. The students expressed deep concern over the English language deficiency and asked me to help them.
My proposal in this regard was well received by Mr. Straw and Mr. O'Brien.
Mr. Straw asked us to help repatriate Sri Lankan illegal immigrants. I told them that the ball was in their court and the Sri Lankan government was awaiting the Home Office document to take necessary action.

Addressing the Royal Commonwealth Club the other day, you said Sri Lanka needed money for development. The donor community has pledged 4.5 billion US dollars. The EU issued a warning that unless we resumed the peace talks without further delay, the money could go elsewhere. But the government is in the proverbial catch 22 situation. To get the money, it has to resume the peace talks. To resume the peace talks, it has to agree to the LTTE's ISGA conditions. If the government agrees to the LTTE condition, the JVP has reportedly warned it would leave the government. Any comment?
No. The JVP never said that. The JVP is not opposed to any negotiated settlement. The SLFP-JVP manifesto of January 30, 2004 clearly says that the alliance is in favour of a negotiated settlement to the north-east conflict.

The LTTE released its ISGA proposals in November 2003. We issued a detailed critique of the proposals - clause by clause. The JVP is certainly not in favour of granting most of the points in the proposals. So are a number of other parties. Even some UNPers said they were not going to agree to all the points in the ISGA proposals.

My understanding is that the JVP is not objecting to the discussions on the ISGA. What it is saying is that it should not only be the ISGA, but the whole crisis should be discussed and a solution found. Even the President has said we cannot discuss only the ISGA and nothing else. In short, the JVP is not opposed to talking about all matters that are required to reach a final solution.

The much talked of defence cooperation pact with India is yet to materialise. Is it really coming?
There are two new governments in place in New Delhi and Colombo. The matter is under consideration. The Indian government is keen to proceed with it. I anticipate that quite soon it will be dealt with.

You are going to Islamabad next week to attend the SAARC council of ministers meeting. After two decades of existence, SAARC is yet to be felt by the teeming millions living in abject poverty. Besides, SAFTA is still a non-entity though it was proposed some 10 years ago. Do you think that the SAARC is a failed grouping?
No, absolutely not. I am categorically optimistic that SAARC has a bright future. With relations between India and Pakistan improving, SAARC will certainly take the leap forward.

With regard to SAFTA, I must say it is no easy task in building an economic union. Take for instance, the EU. Its critics scoffed at its proponents as mad prophets. SAFTA is a long and complicated process. It has to be achieved over time.

For SAARC to be felt by the people at grassroots level, it will take a long time. Take for instance, the globalisation. It was not felt by the masses at the lowest level of the economic strata. Poverty alleviation should not be left to the SAARC alone. It should be the responsibility of the individual nation to deal with that problem. However, we can take steps to improve people-to-people contacts. I have proposed to the Immigration Department that a separate channel for the SAARC nationals should be opened at the airport. These are things we can do.

Explaining the foreign policy goals of the UPFA government, you said that Sri Lanka was for the strengthening of the UN system. Could you elaborate?
We believe in multilateralism. We believe the UN system should be strengthened. We feel there should be no unilateral- decision- making at global level as we saw in the Iraq issue. We are pro-UN like all developing countries. It is still the only institution to deal with global issues. We are for UN reforms, including reforming the Security Council structure. But we also know our limitations. A small country like us cannot play a leading role in the campaign for UN reforms.

Besides the pro-UN stance, we also believe in regionalism. We seek to improve our standing at global level by actively participating in regional bodies such as SAARC, BIMSTEC and Indian Ocean Rim Economic Cooperation. We are also seeking entry into ASEAN Regional Forum, of which India is already a member. This is a security-oriented group.

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