Post-sanctions Iran calls for improved engagement with Sri Lanka

Thursday, 25 February 2016 00:02 -     - {{hitsCtrl.values.hits}}

  • 11th Lanka-Iran JCEC talks start in Colombo

  • Iran looking to improve political and economic ties with SL

  • SL ready to revisit PTA

  • Uma Oya and other Iranian projects going ahead

By Himal Kotelawala

In its first bilateral talks with Sri Lanka since the lifting of international sanctions in January this year, the Government of Iran yesterday called for improved engagement with Sri Lanka in political, economic and cultural spheres, with private sector participation as an added bonus. Sri Lanka, in turn, responded enthusiastically, expressing its willingness to revisit the understanding on the Preferential Trade Agreement of 2004.

Speaking at the 11th meeting of the Joint Commission for Economic Cooperation (JCEC) between Sri Lanka and Iran yesterday, Iranian Minister of Energy Hamid Chithian, who led a high-level delegation that included key public officials, said that conditions in the international arena were now favourable for improved bilateral relations and attractive to entrepreneurs.

“Iran and its new international atmosphere with respect to resolving Iran’s sanctions is completely ready to boost bilateral commercial relations and would like to increase the level of cooperation with Sri Lanka more than ever,” said Chitchian.

“I hope the Governments of Iran and Sri Lanka together signing various MoUs could provide suitable opportunities for protecting their private sectors as well,” he added.

Expanding the level of political, economic and cultural relations between Iran and Sri Lanka is “one of the most important goals” of the Iranian Government, said Chitchian.

The Government of Iran has in fact given special attention to all Asian countries, he said, adding that Sri Lanka enjoys a special position as well.


“Cooperation and relations between Sri Lanka and foreign policy of Iran must be promoted through bilateral relations particularly in economic, energy, commercial, tourism, training, and health sectors. I myself as the Chairman of Iranian Joint Economic Commission believe that such a momentous goal requires greater use of all available capacities along with the practical implementation of the articles of the MoUs between the two sides,” he explained.

Iran is currently carrying out two major projects in Sri Lanka: the Uma Oya Multipurpose Project and the electrification of 1000 Lankan villages.  The Energy Minister assured the gathering that any complications with these Iranian backed development initiatives have been resolved by officials of both countries and by the two Iranian companies FARAB and SUNIR and all aspects of the programme are now moving ahead.

“The ceaseless efforts of officials from both countries helped get things moving.  I hope the implementation of these projects will help improve the quality of life of the people of Sri Lanka,” said Chitchian.

The electrification project also carried out with the assistance of Iran is due to be finished soon, with 90% target within reach, he added.

“We consider these two big projects the very first stepping stone of our cooperation and we hope to have bigger projects for an effective cooperation between the two nations,” said Chitchian.

Calling on both Sri Lankan and Iranian officials to ensure the timely completion of the projects, the Iranian Energy Minister emphasised the need for regular reports on their status.

“Due to the importance of accuracy and the timely implementation of the projects, I ask the executives to continue to report the work progress, phase by phase, in order to take any action in case there are any gaps or delays in the progress,” he said.

Minister Chitchian headed a delegation comprising Iranian officials from the Ministries of Energy, Foreign Affairs and Oil and from other state organisations. 

The Sri Lankan delegation was headed by Minister of Industry and Commerce Rishad Bathiudeen and comprised officials from his and other ministries that included Foreign Affairs, Finance, Power and Renewable Energy, Petroleum Resources Development, Science, Technology and Research, Higher Education, Health, City Planning and Water Supplying.  Several line agencies such as the EDB, BOI, the Sri Lanka Tea Board, the Gems and Jewellery Authority, the TRC, Bank of Ceylon and the Central Bank also participated.

Minister Bathiudeen who also spoke at the event emphasised the unrealised trade potentials between both countries and the importance of trade with post-sanctions Iran for Sri Lanka. “This joint bilateral session meeting takes place today as both countries by themselves are experiencing, historic new beginnings. The Unity Government is expected to power Sri Lanka’s next stage of economic development by introducing major reforms across many sectors. As for Iran, lifting of sanctions and new governance initiatives such as transparency in the country has brought in a fresh beginning and a historic turn for the people of Iran. Our two countries are maintaining longstanding relations in many aspects,” he said.

In the recent past, trade and economic activities have slowed between the two countries due to various external pressures, said Bathiudeen, adding that since the lifting of sanctions on Iran, the JCEC has become an ideal platform to refresh and recommence bilateral cooperation and identify new opportunities in diverse fields.

“The balance of trade between the two countries has heavily and continuously been in favour of Iran over the years and after 2013, it has changed in favour of Sri Lanka. We still stand much below the real potential in our bilateral trade. Also, though trade between Sri Lanka and Iran continues to show a positive trend, it is not a steady growth trend and there is room for strengthening it,” he said.

Total rrade between the two countries surpassed $1 billion in 2008 for the first time, recalled Minister Bathiudeen. It then exceeded $1.6 billion in 2011 and in 2012 slowed down to $ 858 million. It further decreased to $ 162 m in 2015 due to unconditional decrease of imports from Iran, especially on importation of petroleum oil. The major Sri Lankan product in the exports of Iran is tea, taking 83% of the total exports in 2015. Other Lankan exports to Iran are coconuts, coco peat and fibre, and industrial gloves.

“I believe that today the two parties could explore and identify ways and means for product diversification to exploit our trade potentials fully. I note that the finalised preferential trade agreement in 2004 has not been implemented due to various reasons and I am confident today’s session is the opportunity to re-visit and take appropriate decisions having taken to consideration of present trading patterns and global trade conditions,” he said.