FCO Minister Hugo Swire:
I am delighted to speak to you all today and I am grateful to Governor Cabraal for giving me the opportunity to speak at this lunch.
Forums like this are vital for increasing trade between Commonwealth countries and promoting the fundamental values that I believe are crucial for emerging economies to fulfil their potential.
Capitalising on the networks and relationships at our disposal in this globalised, competitive world will help us all to promote prosperity, stability and security. And the Commonwealth is a long-standing network of old friends which lends itself perfectly to this ambition. Indeed, with 53 members, representing a third of the world’s population and over 1 billion citizens under the age of 25, the Commonwealth itself numbers some of the world’s fastest growing economies: exporting over £2 trillion of goods and services year. 20 percent of export trade within the Commonwealth is, I am told, British. I am particularly pleased that there are more companies here from the United Kingdom that any other Commonwealth country, apart from, of course, our hosts here in Sri Lanka.
For the UK, we have strengthened our commercial capacity in our High Commissions in Commonwealth countries in Canada, Sierra Leone, South Africa, Mozambique, Ghana, Kenya, Cameroon, Papua New Guinea and Guyana. UK Trade and Investment helps British companies of all sizes do business across the Commonwealth providing the assistance required to expand the already deep business links between us all. We have redoubled our efforts to get small and medium sized enterprises in the UK to boost exports and rediscover the buccaneering spirit that I know will see British businesses undertake new venture and forge new markets across the globe.
The Commonwealth provides its members with a solid platform for trade and investment. Our shared language, similar legal systems and our founding principles of democracy, the rule of law and good governance set the parameters for trusting, financially beneficial partnerships.
This networking lunch is an opportunity to broaden, strengthen and deepen relationships between us all.
We believe that sustainable prosperity and development is not possible without good governance, rule of law, property rights, effective public services, strong civil institutions, free and fair trade, and open markets.
This applies not just to countries struggling to rise out of poverty, but also to those - like Sri Lanka - which have recently achieved middle income status, and which aspire to make the transition to high growth and high per capita wealth. And also to established economies like the UK, where we have shaken up the public sector and put a renewed emphasis behind private sector growth.
This approach is at the core of what my Prime Minister, David Cameron, has called the ‘golden thread’ of development, as he said: we should not “just ask whether countries are getting richer; we [should] ask whether they are getting freer, getting fairer and becoming more open too.” And it has been central to the UK’s efforts through the G8 on tax, trade and transparency.
The Commonwealth is perfectly placed to support development in this way. It does not focus exclusively on helping its member states to become richer. It also focuses on helping its member countries to develop their democratic credentials; to foster the rule of law; to have open, strong and transparent institutions; and to adhere to the Commonwealth’s political values and principles.
Good governance, like good corporate behaviour, helps create jobs; contributes to market sustainability; reassures shareholders; attracts investors; improves reputation and has potential to generate long-term growth. Investors are understandably more cautious about doing business in unstable, repressive states.
In Sri Lanka corporate governance and the general business environment has been improving since the end of the conflict. But it is not perfect and there is room for improvement. This means increased transparency, simpler regulation and faster procedures, good governance and respect for the rule of law. These are the factors, Golden Thread factors, that can provide the certainties and assurances that UK companies require if they are to continue to invest here.
UK companies already have a significant foot-print in Sri Lanka. There are over 100 UK companies operating here, including some of you who are represented today, HSBC, Standard Chartered, and others such GSK, Unilever and Rolls Royce. The UK is Sri Lanka’s 2nd largest trading partner in terms of volume and we are a top 5 investor. And earlier this year the largest ever bilateral trade contract was signed allowing Airbus and Rolls Royce to provide Sri Lankan Airlines with a new fleet of aircraft and engines.
Over the coming years, and if the Golden Thread factors develop positively, I would expect the number of UK companies to increase further and to expand into other sectors where the UK is home to world class expertise.
One area where the UK has unrivalled expertise is Financial Services. The UK is the world’s pre-eminent centre for financial services, creating the best environment for businesses and their employees, customers and communities to prosper.
In addition, Britain is the leading exporter of financial and professional services across the world and a thriving and rapidly expanding hub for Islamic Finance. We have a huge amount to offer Commonwealth nations - not least with Scotland hosting next year’s Commonwealth Games in Glasgow when that great historic trading and manufacturing city will host the Commonwealth Games Business Conference, to which you are all invited, in July.
The Commonwealth’s strength is in its diversity, and that is as true for trade and business as anything else.
So, I hope that you will all seize this opportunity to make new contacts and forge new business links from across the Commonwealth Family. My Government is determined to reinvigorate the Commonwealth, both as an international organisation and a natural place to do business. The Commonwealth ‘effect’ - our shared principles of democracy, rule of law, good governance and similar legal systems provide solid foundations for doing business and a platform for trade, investment, development and in turn prosperity - and, some studies say, can bring a trade advantage of up to 50 percent.
Let’s make the most of it!
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