Remarks by Ambassador Chung to the Sri Lanka-US Business Council of the Ceylon Chamber of Commerce
August 29, 2022
Chairman of the Silva Board, honorable board members and friends – thank you for inviting me to speak to you this afternoon. All of you in this room are not just spectators, but true advocates for strengthening the investment and trade climate in Sri Lanka and bilateral trade with the United States. I know we all like to watch a good game of cricket as spectators, but it’s time for us to get in the game and everyone does their part.
Sri Lanka is going through one of the most difficult periods in its economic history. Critical fuel and power supply chain disruptions are hampering business operations in nearly every industry. Every day, in every conversation I have, Sri Lankans tell me they are worried about the future and the prospects of the next generation. Sri Lanka’s challenges are undoubtedly serious. But they are not insurmountable.
Looking around me, I see the many familiar faces of those of you who attended the annual meeting of the Ceylon Chamber, such as Manjula de Silva, Secretary General of the Ceylon Chamber. I then laid out five steps, steps that I think Sri Lanka needs to take to revive its economy. I won’t repeat them all now, but this council, working closely with the embassy, is perfectly placed to help Sri Lanka accomplish two of these critical steps. First, the council is a key voice in advising the government on how to reform the business environment. Second, you are a key driver of trade and investment growth.
Let’s start with the business environment, and its greatest strength, its people. Sri Lanka needs to find ways to invest in its workforce. One of them is tapping into the talents and energy of Sri Lankan women. Gender parity, with women literally at the table and in leadership roles, is essential for economic growth. Looking around you, it’s clear that we need more women in business. This is something I heard loud and clear when I met Sri Lankan women parliamentarians from all political parties, who are only 12 out of a total of 225 members in parliament.
We must ensure that women have equal access to finance for their small and medium enterprises that operate in so many villages and towns across the island. Last week, I joined 100 women entrepreneurs at an investment training event, part of a three-year State Department-funded project, “Empowering Women through Economic Inclusion “. It was so exciting to see so many women, so many great ideas, and so many businesses about to take off. Their energy, ideas and expertise give me great hope for the road ahead.
Currently, Sri Lanka has a unique opportunity to create a more dynamic economy that is more resilient to modern challenges. To do this well, decision-makers need to hear from a diverse community of partners, including the business community. They need to understand how new policies, regulations or legislation will impact your business, your employees and your customers.
Let me share just one example. Sri Lanka can seize the present moment to switch to green technologies and renewable energy sources. If there’s anything the fuel crisis has taught us, it’s that now is the time to switch to renewables! This is an area where Sri Lanka will benefit from the advanced technology that US companies have to offer, as well as access to US-based project finance. Clean energy is also a priority of the Rebuilding a Better World partnership that President Biden announced last year with our G7 partners.
It is also important to ensure that there are no unreasonable obstacles for foreign investors when seeking opportunities in Sri Lanka and bringing in the capital that the country desperately needs. U.S. foreign direct investment in Sri Lanka has stagnated at around $13-17 million per year since 2015. Our companies care about consistency and transparency in government decision-making, and most importantly about predictability.
The United States remains Sri Lanka’s largest export market, so our contributions to Sri Lanka’s prosperity are, in this regard, unprecedented. Sri Lanka can and should increase its exports and investments to the United States – this is an area that my team and I are really excited about. Our bilateral trade relationship accounts for about 3% of Sri Lanka’s GDP. According to our estimates, Sri Lankan exporters to the United States provide direct employment for at least 180,000 people here. This is the type of economic partnership that we should all seek to develop. Investment in the United States is another opportunity for the Sri Lankan private sector. Businesses investing in the United States, regardless of industry, enjoy competitive advantages in one of the most open markets on the planet. The United States offers the largest consumer market in the world with a GDP of $20 trillion and 325 million people. Companies of all sizes are helping to make innovation in the United States a global enterprise, benefiting from and contributing to a thriving ecosystem of invention and inspiration.
This is a defining moment in Sri Lanka’s history, and the United States continues to stand with Sri Lanka during this difficult time. In response, we are providing aid that is already making a tangible difference in the lives of Sri Lankans. This year alone, we announced $120 million in new funding for small and medium enterprises, $27 million for the Sri Lankan dairy industry and over $30 million in new humanitarian, technical and food security assistance. for the benefit of the most vulnerable communities in Sri Lanka. Last Friday, I announced 320 metric tons of yellow split peas through Save the Children to feed thousands of school children across Sri Lanka, as part of our five-year, $26 million commitment. As a mother, I know that I want my child to go to school so that I can be free to learn and play, without fear of going hungry. This is on top of all the support we announced in 2021: $265 million for Sri Lankan SMEs and the launch of our $19 million USAID Sri Lanka energy program, which has already resulted in agreements with VEGA. Innovations and David Peiris Motors to develop the country’s electricity. automotive industry. I expect to have more announcements and more in-country support soon.
The United States remains a friend and partner in Sri Lanka’s prosperity, and I look forward to our common future and our success in overcoming current challenges. We welcome the steps Sri Lanka has taken to approach the IMF and begin talks on debt restructuring. It will be difficult, but the United States supports the government’s decision to engage the IMF because the IMF represents the best tools, approaches and resources to enable Sri Lanka to weather this crisis and get back on the path to recovery and the growth. And for the talks to succeed, each creditor must accept equal and comparable treatment without delay. We heard last week President Wickremasinghe call on all creditors to sing to the same anthem, and that includes China.
There is also a need to put in place social safety nets for vulnerable communities most affected during these times. The calls from many actors in the private sector, including those of you in the room, civil society, the media and politicians for a genuine push towards the political and economic reforms that are so intertwined, will be essential to sustain. This means good governance, clean procurement, transparency and anti-corruption measures. There is a lot of work to be done and the country must come together to do this work. It is time.
The United States will continue to do more to support Sri Lanka on this path – that means support through the IMF, financing for SMEs, fertilizer and seeds for farmers, and help to build public financial management systems. Let us not be spectators, but each of us takes responsibility for ensuring that Sri Lanka returns to sustainable economic growth and prosperity for all. Thanks.