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    Opportunity to court Japanese firms-Economist

    Multinationals will now be looking to remap their supply chains due to the risks of concentration, Economist Anushka Wijesinghe said,

    He said that it was an opportune moment for Sri Lanka to court Japanese firms wherein the Japanese government was incentivizing firms to relocate outside China. He was speaking on 17 April as part of the webinar series by the Hatch co-working space.

    He said “there will be a reconfiguring. The US-China trade war had already triggered this among global firms as a risk management strategy. We are going to see a shift in focus from a ruthless emphasis on cost to saying we need to make our supply chain resilient. This will be characterized by greater regionalism and a shortening of the supply chain, definitely geographic diversity and also a partial reshoring and domesticization.”

    “This is particularly interesting for Sri Lanka. It reminds me of the opportunity that we had in the first wave of Japanese outward investment.”

    He called on swift action to court this shift in supply chains as other nations had already begun. He added “we have the Japan External Trade Organization and the Japan International Cooperation Agency in Colombo. We have long term existing Japanese firms here.”

    On the missing the initial wave of outward Japanese investment he said “We had firms like Sanyo who were ready to set up in the first wave. We missed it because of the 1983 violence. Maybe this is our second chance.

    We have a much more stable security condition.” He commended the government’s measures to allow the export of certain items that would assist the garment sector in maintaining operations and keeping people employed. He said that Sri Lanka had a perfect track record of maintaining debt repayment.

    Wijesinghe highlighted the complexity of the challenges the government is facing due to the coronavirus. He echoed projections by the Asian Development Bank and the International Monetary Fund that predict a decline in global economic activity greater than during the Global Financial crisis.

    He cited stimulus measures of US $ 5 trillion globally due to the crisis. He said that the lack of global leadership and the divisions caused by trade wars left global commerce at a weak state even before the crisis.

    Wijesinghe likened stimulus measures to a shot of adrenalin adding, the Global Financial crisis was largely about unfreezing credit markets and easing up constraints in the financial sector. It was more obvious where that adrenalin shot was to go to. This time we don’t know.”

    He commended the Indian Reserve Bank which had implemented bank account opening schemes which were now being used to channel welfare. He added that such a system would be useful in the distribution of Samurdhi.

    Courtesy – Daily News

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