DailyMirror
Sri Lanka is not prepared to barter its sovereignty for the sake of regaining the European Union (EU) GSP+ tariff concession and will continue with its stated policy instead of giving into any unfair demands, Central Bank Governor Ajith Nivard Cabraal told Daily Mirror Online yesterday.
He said the country would not be hurt by the loss of the EU trade concession as all the remedial measures had been taken to maintain the economy sans the concessions.
“I admit that for Sri Lanka the loss of the GSP+ concession is a risk. However on October 29 last year we told the entire country about our plans in case Sri Lanka loses the trade concession. We have reiterated that position today,” Mr. Cabraal said.
When asked what those plans were, he said that having anticipated of such a move by the EU, Sri Lanka’s exchange rate had been adjusted, interest rates lowered and inflation reduced.
He said companies too had made necessary adjustments as they were also aware of the risk of losing the GSP+.
“We have adjusted the exchange rate so as to avoid any impact on the people. At the time this whole debate began our interest rate was in the region of 19 per cent. Today it is down to 11 or 12 per cent. This is a major reduction. At the time our inflation was much higher than it is today,” Mr. Cabraal said.
When asked if the government investigate the allegations of human rights violations as requested by the EU as a means of regaining the GSP+ concession, he said the government had no intention of giving in to some of the demands made by the EU because it was essential to safeguard Sri Lanka’s sovereignty.
Mr. Cabraal said some other government may have given in to EU demands to obtain the seven percent trade concession but the UPFA government was not prepared to barter the sovereignty of Sri Lanka.
He said this government would stand by its stated policy and the people had endorsed it at the presidential election. “The people voted for the candidate who said he will not barter the sovereignty of Sri Lanka and President Mahinda Rajapaksa will carry out that responsibility,” Mr. Cabraal said.