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State Minister Ajith Nivard Cabraal at the Pakistan-Sri Lanka Trade and Investment Conference[/caption]
Following Pakistani Prime Minister Imran Khan’s visit in aims of strengthening ties with Sri Lanka, State Minister of Money, Capital Markets, and State Enterprise Reforms Ajith Nivard Cabraal has proposed to expand trade and investments between both countries.
Speaking at the Pakistan-Sri Lanka Trade and Investment Conference, Cabraal compared the similarities between both countries, as he highlighted that there’s more room for both parties to benefit from each other.
“The two countries that started cricket (England and Australia) were both beaten by two countries of the (Indian) subcontinent (Sri Lanka and Pakistan). So let's see how we can do even better. In my view, to do that successfully, we have to make sure we invest in each other's countries,” Cabraal said.
The State Minister went on to say that the aspiration of consistently developing and building one’s country is a shared objective between the two countries. Thus, Cabraal suggested that both parties in collaboration would speed up this process whilst enhancing the relationship between both parties.
“As your Foreign Minister just mentioned, the targets that we have set for ourselves seem to be quite low. We should not be looking at $ 300 million or $ 400 million of trade and investment; we should really be looking at a lot more, given the relationships that we have, the friendships that we enjoy, and the way in which we have co-operated with each other,” he said.
Furthermore, Cabraal highlighted the resource gap in both countries and mentioned that such resource gaps have to be filled with investments, also going on to mention the cause for this gap by revisiting the history of colonial times.
“In the colonial times, many of those countries that reached high per capita incomes didn't fill the resource gap with investment. They took the dubious step to conquer other countries and forcibly grab resources. By doing so, they were able to reach the prosperity levels that they are at today,” Cabraal explained.
It was further stated that both countries have not followed the example aforementioned, rather both parties continued to access resources and investment legally and honorably whilst inviting and receiving investments.
In addition to this, Cabraal went on to list obtaining loans and trading in a fair manner to conclude that both parties have “played by the rules” whilst progressing and developing in a genuine way.
He noted that the country only receives 1% return of the capital invested in these foreign projects. Also, it was duly noted that in retrospect, Sri Lanka is obliged to pay an estimate of 7%, when the same continent invests in Sri Lanka due to supposed “poor credit rating”.
“We suffer from an interest differential of around 6% on our reciprocal investments. On that basis, if we have forex reserves of $ 10 billion and our market borrowings are higher than that, we will have a 6% upfront negative carry on our total reserves,” Cabraal said.
“That works out to about $ 600 million, which is a lot of money as to where we can invest in each other's economies and countries,” he proposed.
State Minister Ajith Nivard Cabraal at the Pakistan-Sri Lanka Trade and Investment Conference[/caption]
Following Pakistani Prime Minister Imran Khan’s visit in aims of strengthening ties with Sri Lanka, State Minister of Money, Capital Markets, and State Enterprise Reforms Ajith Nivard Cabraal has proposed to expand trade and investments between both countries.
Speaking at the Pakistan-Sri Lanka Trade and Investment Conference, Cabraal compared the similarities between both countries, as he highlighted that there’s more room for both parties to benefit from each other.
“The two countries that started cricket (England and Australia) were both beaten by two countries of the (Indian) subcontinent (Sri Lanka and Pakistan). So let's see how we can do even better. In my view, to do that successfully, we have to make sure we invest in each other's countries,” Cabraal said.
The State Minister went on to say that the aspiration of consistently developing and building one’s country is a shared objective between the two countries. Thus, Cabraal suggested that both parties in collaboration would speed up this process whilst enhancing the relationship between both parties.
“As your Foreign Minister just mentioned, the targets that we have set for ourselves seem to be quite low. We should not be looking at $ 300 million or $ 400 million of trade and investment; we should really be looking at a lot more, given the relationships that we have, the friendships that we enjoy, and the way in which we have co-operated with each other,” he said.
Furthermore, Cabraal highlighted the resource gap in both countries and mentioned that such resource gaps have to be filled with investments, also going on to mention the cause for this gap by revisiting the history of colonial times.
“In the colonial times, many of those countries that reached high per capita incomes didn't fill the resource gap with investment. They took the dubious step to conquer other countries and forcibly grab resources. By doing so, they were able to reach the prosperity levels that they are at today,” Cabraal explained.
It was further stated that both countries have not followed the example aforementioned, rather both parties continued to access resources and investment legally and honorably whilst inviting and receiving investments.
In addition to this, Cabraal went on to list obtaining loans and trading in a fair manner to conclude that both parties have “played by the rules” whilst progressing and developing in a genuine way.
He noted that the country only receives 1% return of the capital invested in these foreign projects. Also, it was duly noted that in retrospect, Sri Lanka is obliged to pay an estimate of 7%, when the same continent invests in Sri Lanka due to supposed “poor credit rating”.
“We suffer from an interest differential of around 6% on our reciprocal investments. On that basis, if we have forex reserves of $ 10 billion and our market borrowings are higher than that, we will have a 6% upfront negative carry on our total reserves,” Cabraal said.
“That works out to about $ 600 million, which is a lot of money as to where we can invest in each other's economies and countries,” he proposed.