Losing GSP+ will spell disaster for Sri Lanka’s economy: former PM Wickremesinghe

If Sri Lanka loses access to Europe’s Generalised Scheme of Preferences Plus (GSP+) trade concessions, thousands will lose their jobs and the rupee will further depreciate, forcing Sri Lanka to pay around 300 rupees per US dollar, former prime minister Ranil Wickremesinghe said.

“Our government took action to regain the GSP+ from the European Union to assist in developing the country’s economy in 2017. This facility provides Sri Lanka with permission to export goods to Europe without taxation, which led to a boom in the garment and fishing industries. An issue has arisen in the European Parliament this week regarding the GSP+ tax concession. We have been warned that this concession will be revoked,” Wickremesinghe said in the latest of a series of video statements.

The United National Party (UNP) leader was referring to a resolution adopted by the European parliament June 10 calling for the repeal of Sri Lanka’s Prevention of Terrorism Act (PTA) and inviting the European Union (EU) Commission to consider temporarily withdrawing Sri Lanka’s access to GSP+.

Wickremesinghe said Sri Lanka’s foreign exchange reserves have dropped.

“Our tourism industry is at risk at this time due to the COVID-19 pandemic. With the sinking of the X-Press Pearl, issues have arisen for our fishing industry as well. The number of people going abroad for employment has decreased. Therefore, our foreign exchange has fallen.

“Sri Lanka borrowed $200 million from Bangladesh due to the economic crisis caused by the decline in our foreign exchange. At present, only the tea and garment industries are able to earn foreign exchange for our country,” he said.

Given this, said the former PM, the island nation is reliant on GSP+.

“In the face of the danger that has arisen, the GSP+ must not be politicised. The government should take immediate action to protect the concession. Do not add any more weight to the heavy economic burden that the people are carrying. I urge the government not to destroy the country,” he said.

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