"Sri Lanka: The emerging centre point for investment in South Asia"

(December 05, Istanbul, Sri Lanka Guardian) “The current State Visit of His Excellency Mahinda Rajapaksa to Turkey would surely mark yet another important milestone in our bilateral ties. The Sri Lanka Business Forum, being held today, would surely add momentum to our friendship, as reflected by the presence here of the business community from both countries,” said Foreign Minister Rohitha Bogollagama addressing the Sri Lanka Investment & Business Forum at Istanbul,, Turkey yesterday (Dec 4).

The Business Forum was organized by the Confederation of Business and Industrialists of Turkey (TUSKON) the Sri Lanka Embassy in Turkey and the Sri Lanka Board of Investment (BOI).

The Minister said that for Sri Lankans, Istanbul is of particular significance as our spices and other articles of commerce were traded here and went beyond it to Europe for centuries before the discovery of the sea route by Vasco da Gama in 1497 that shortened the distance between South Asia and Europe considerably.

Explaining the opportunities for Turkish investment in Sri Lanka the Foreign Minister said the total turnover of our trade stood at US Dollars 120.41 million in 2007, which required increase. He reiterated the Sri Lankan President’s invitation to Turkish business persons to invest in Sri Lanka, which investments will be protected by the government and would ensure the highest returns.

The Minister added that Sri Lanka has one of the most liberalized investment economies in our part of the world offering a range of high quality facilities to resident expatriates. All such investments carry a constitutional guarantee. The Free Trade Agreement between Sri Lanka and India carry with it numerous advantages for entry into the vast Indian market, as well as to Pakistan due to the Free Trade Agreement with Pakistan, and also the South Asia Free Trade Agreement (SAFTA), which when fully operationalized will offer openings to Turkish business and industry to reach the vast population of South Asia.

Minister Bogollagama explained that 64% of Sri Lanka’s exports to Turkey were made up of Tea, while the rest comprised of apparel and clothing, rubber tyres and other rubber based products. In general terms our two way trade had fluctuated during the last five decades. He hoped the presence of the business community from both sides at this largely attended will help to add stability and expansion to two way trade between Sri Lanka and Turkey, and a better tariff regime for Sri Lanka’s exports to Turkey. Sri Lanka looked forward to yielding results from the Joint Agreement on Economic & Technical Cooperation between Sri Lanka and Turkey which came into force in November 2007, and awaited the convening of a Joint Committee at the level of officials to give practical meaning to this important Agreement.

Sri Lanka, for its part has much more to offer than the current range of its exports to Turkey. Our major exports, besides tea and rubber based products comprise garments, food and beverages, tobacco, petroleum products, ceramics, leather products, machinery and equipment, gems and jewellery among a host of others. There are indeed many areas for Turkish businessmen to pursue.

Sri Lanka liberalized its economy in the late 70’s, being the first in the South Asian region to do so, and has followed a consistent, liberal, free market economic philosophy. The country’s social indicators such as life expectancy, literacy rate of 93% are well above those in comparison to other developing counties and are in fact on par with the developed world. The country’s vision is to move on to a sustainable 8-10% annual GDP growth rate, building on the promising progress in the recent past.

Our current development strategy is mainly guided by His Excellency the President’s Policy Statement “Mahinda Chintana” or “Mahinda Vision”, which essentially takes a strong ‘pro-poor’ development stand. Under this policy guidance, the Government has undertaken a major infrastructure drive covering sea ports, airports, roads, electricity, rail transport and many other areas including rural infrastructure development to achieve all inclusive growth, with the active participation of the rural masses in the country. The construction work of several power projects are in progress.

Explaining progress in the power sector so important for investment and industry, the Minister said the first phase of the Kerawalapitiya thermal power plant which would generate 200 megawatts of power to the national grid would be available in fact from next week. The next phase of this Project which will be completed in 2009 would contribute another 100 megawatts. The construction of the first phase of the Norochcholai coal power plant and the Upper Kothmale hydro power plant are expected to collectively generate 450 megawatts of electricity by 2011.

He emphasized that Sri Lanka is well known the world over as a year round tourist destination, enjoying excellent connectivity by air. Its beautiful beaches and rich bio-diversity have fascinated many a traveler over the centuries. The hotel facilities are world class and are extremely competitive in terms of value for money. With seven UNESCO World Heritage sites it is also a destination with a rich history and culture. The remains of over 2500 years of history are still very evident in many parts of the country and are well worth a visit. There was great opportunity for investment in tourism and tourism related projects in Sri Lanka . Sri Lanka warmly welcomes the Turkish travel trade to visit Sri Lanka to explore business opportunities in this sector.

The Minister brought to the attention of the Forum the advantages of Sri Lanka ’s strategic geographic location for trade and investment, being situated between the Far East and the Middle East, and its location in South Asia giving it the opportunity of becoming the centre-point in trade in the region. All of this made Sri Lanka an ideal springboard for profitable investment in the South Asian region, he said.

Minister Bogollagama added that Sri Lanka ’s economic fundamentals were sound and in place, it had a well-educated and skilled work force, was a middle income society, and a resilient nation.

There were opportunities for the expansion of air services between the two countries, for which an agreement had already been signed. There will also be an agreement to avoid Double Taxation and for the Protection of Investments from Turkey . He informed the Forum of the presence of a Textile Processing Zone in Sri Lanka , and that the country provided 3 per cent of processed textiles to the world trade in garments, and that the Apparel Industry had much scope for expansion. There were opportunities for investment in the development of an international airport on a turnkey basis, with government guarantees for the safety of investment.

Being an island nation Sri Lanka also provided ample opportunity for investment in the fisheries sector, with the harvests from the Sri Lankan seas already being in much demand for quality and quick supply in the sophisticated markets such as Tokyo . The Minister said the signing of a Memorandum of Understanding for investment in the agricultural sector would soon open opportunities for investment in livestock and food processing.

Minister Bogollagama also reminded the business persons present that Sri Lanka had good and advanced financial services, a good legal system, and great opportunity for value addition in export products. He urged the Turkish business community to invest in Sri Lanka to take advantage of the opportunities to invest in the fastest growing economy in the world – Asia . - Sri Lanka Guardian