As trade between both countries topped $ 360 million, the Russian Federation, the single largest buyer of pure Ceylon tea, is set to significantly increase bilateral cooperation across diverse economic sectors.
“We want to extend our support to Sri Lanka’s power and energy sector. To this end, a Russian nuclear power team with scientists will arrive in January to study Sri Lanka’s energy sector outlook,” revealed Alexander A. Karchava, the new Russian envoy to Sri Lanka, on 7 December.
Karchava revealed this to Rishad Bathiudeen, the Minister of Industry and Commerce in Colombo during his first courtesy call on Bathiudeen at the Ministry of Industry and Commerce. “Sri Lanka-Russia bilateral cooperation has been growing from strength to strength since the establishment of diplomatic relations in 1957. Our bilateral trade in 2011 stood at $ 360 million, an increase of 34% in comparison to 2010. However, despite this trade volume, we believe there is yet unrealised trade potentials between the two countries which we can synergise jointly,” stated Bathiudeen.
“Almost 89% of our exports to Russia are pure Ceylon tea. This also shows the strong potential for export diversification from our side,” Bathiudeen added.
“We want to extend our support to Sri Lanka’s power and energy sector. To this end, a Russian nuclear power team with scientists will arrive in January to study Sri Lanka’s energy sector outlook. We are also interested in the proposed Trincomalee Port and Industrial Zone Development project,” said Karchava.
“I also agree that despite bilateral trade at $ 360 million, there is yet unrealised trade potentials that we need to jointly explore,” he stressed, adding: “We should also strengthen people to people exchanges. There is a strong presence of Sri Lankans in many top Russian education institutions while almost 21,000 Russian tourists visited Sri Lanka this year.”
Bathiudeen in response stated: “We thank the Russian Federation for its investment interests and the ongoing support extended to Sri Lanka. I believe that such Russian investment initiatives can strongly assist in bringing down our manufacturing and energy costs so that we can continue to sustain our competitiveness in international markets. Russia can invest here and synergise the ISFTA (India-Sri Lanka Free Trade Agreement), and the PSFTA (Pakistan-Sri Lanka Free Trade Agreement) to access the huge South Asian markets.” According to the Department of Commerce of Sri Lanka, Russia is the topmost pure Ceylon tea buyer in the world. In 2011, more than 54,200 metric tons of pure Ceylon tea was purchased by the Russian Federation, amounting to $ 251.08 million. On average, Russia captures about 17% of annual Ceylon tea exports.
Bilateral trade between Sri Lanka and Russia too has been growing significantly, despite the disintegration of former Soviet Union in 1991. The total trade turnover between the two countries which stood at US $ 15 million in 1991, reached US $ 196 million in 2009 after which it topped $ 360 million in 2011, recording a 34% increase compared to 2010. The balance of trade has continuously been in favour of Sri Lanka during the last decade.