Sri Lankan Prime Minister Ranil Wickremesinghe yesterday mapped out what his country is doing to boost its economy, which has been hit by declining growth and a widening budget deficit, prompting an International Monetary Fund bailout last month.
It will, among other things, overhaul its air, sea and road transport, including building a third seaport, in a move to develop the country into a South Asian hub for finance, logistics and business.
The country also launched its plan yesterday to have a free trade agreement (FTA) with Singapore.
Mr Wickremesinghe highlighted his country's plans to build infrastructure, cut red tape, simplify laws, and promote foreign trade and investments, in a speech that also stressed the need for South Asian governments to further open their economies and promote foreign trade and investments.
He was giving the keynote address at the South Asian Diaspora Convention, a meeting organised by the National University of Singapore's Institute of South Asian Studies to discuss the region's geopolitical and geo-economic challenges.
"South Asia is very much the place to be," he told about 1,000 businessmen, academics and policymakers. The country, ravaged by civil war for 26 years until 2009, is in a region with 1.7 billion people and the world's highest growth rate, according to the World Bank.
Mr Wickremesinghe, who is in Singapore for a three-day official visit that began on Sunday, met Singapore leaders yesterday and will visit the National Gallery and Singapore River waterfront today to find out about conservation and urban revival efforts.
In his address, he acknowledged that Sri Lanka's "poor infrastructure, obsolete policies and unfavourable business environments" made it difficult to do business across borders. But his government "has set in motion... smart and sustainable economic reforms to harness the country's tremendous potential".
To boost growth, it is working on lowering its budget deficit from 5.4 per cent of the gross domestic product to 3.5 per cent by 2020.
The country grew rapidly at around 8 per cent a year after the civil war ended. But the pace fell to 4.9 per cent in 2014 and 4.8 per cent last year, amid rising foreign debt, according to official data.
The planned FTA with Singapore will helpexports gain access to a wider market, he said.
Also, plans are under way to build a third port in Trincomalee in eastern Sri Lanka, and reclaim land in Colombo to build a financial city.
Singapore's Surbana Jurong, an urban planning consultancy, has inked a deal with the Sri Lankan government to develop Trincomalee's masterplan, focusing on shipping, manufacturing and tourism.
Minister for Trade and Industry (Industry) S. Iswaran, speaking at the conference, said Singapore businesses are in a position to help meet South Asia's needs in sectors such as roads, ports and industrial parks.
Singapore also offers a strong infrastructure finance ecosystem, he said. "Companies in Singapore and the region should take full advantage of this ecosystem to look seriously at developing and investing in South Asia's infrastructure."
Mr Iswaran added: "This will not only help to close the infrastructure gap in the region, but also significantly help the economies by providing jobs and increasing the capacity for future growth."