Sri Lanka enters serious Eurozone radar for first time

For the first time, Sri Lanka has entered the serious Eurozone investment radar and a high profile German investor team is headed to Colombo in August 2013 for an in-depth study of emerging opportunities in the country.

“Asia is the world’s new economic tiger and Sri Lanka is one of the fastest growing economies in Asia. We are planning to send a representative team in August to study emerging opportunities in Sri Lanka,” announced R.A. Ekkehard Stein, immediate past President of DAW German-Asian Business Circle (Deutsch-Asiatischer Wirtschaftskreis e. V) on 25 February in Frankfurt, Germany.

Stein, a senior lawyer with Wiesbaden, Hesse based law firm Paule & Partner, was addressing 2013 DAW Asia Pacific Forum on 25 February at Maritim Hotel in Frankfurt, acknowledging the detailed keynote statement made by Minister of Industry and Commerce Rishad Bathiudeen at the forum.

The forum was organised and held by DAW German-Asian Business Circle. According to DAW officials, DAW German-Asian Business Circle represents more than 1,900 top German firms operating in German industries and investments for decades, and is one of the two most influential German – and by extension, in overall Eurozone – lobby groups focused on Asia with ability to influence German (and by extension, overall Eurozone) policy directions.

The renowned Audi Group ($ 44,096 m turnover in 2011), EU logistics group Shenker (Euro 29 m turnover in 2011), and Fraport AG (Frankfurt Airport Services, Euro 802 m turnover in 2011) are among the firms represented in DAW.

Also for the first time in DAW series, Sri Lanka has been upgraded to a “representing country slot” alongside the only other Asian nation to be picked for this year, Vietnam. Signalling Sri Lanka’s significance, this year’s DAW Forum also featured a special ‘Sri Lanka only’ parallel session attended by keen German investors bullish on Sri Lanka.

Bodo Kruger (President of DAW), Dr. Vu Huy Hoang the Vietnamese Minister of Industry and Trade, Dr. Naomi Chakwin (Resident Director General – ADB EU Rep office), Roland Schwinn (Executive Director – Asia and Middle East, Duetsche Borse Group), Florian Rentsch (Minister of Economics, State of Hesse), Prof. Dr. Eberhard Sandschneider (Director – DGAP, German Council of Foreing Relations), and Amb. Jurgen Weerth (former Ambassador of Germany to Sri Lanka), Mark Orangel from Swiss Chamber of Commerce, Maria Deutsch from City Promotion Yokohoma, and Sarath Kongahage (Ambassador of Sri Lanka to Germany), were in attendance.

Among the Sri Lanka team members were reps from BoI, Ceylon Chamber of Commerce and Sri Lanka’s Consul General in Frankfurt Pradeep Jayewardene and Minister Commercial G. Gnanatheva. The keen German firms attending the forum were Eurex Frankfurt AG, Duetsche Borse Group, IVP Group Germany GMBH, Asico Handels GMBH, MAZARS GMBH, Adam Opel AG, SWB GMBH, LUTHER LLP, and VietinBank, Rigging Service GMBH, among many others.

Germany is the leading EU investor in Sri Lanka. According to the Board of Investment of Sri Lanka, more than 170 German investment projects are in operation in the country. Among leading German firms in Sri Lanka are BASF Finlay and Kramsky GMBH. German investments in Sri Lanka are protected by the bilateral Investment Protection Guarantee Agreement. Germany is Sri Lanka’s sixth largest export partner in 2011. In 2012 bilateral trade stood at $ 771.69 m rising from $ 449 m in 2005 by 139%.

“Asia is a big market but a complex one,” said Stein and added: “Asia is and will stay the fastest growing market for the German economy. DAW aims to create an information platform to enable German and European companies to get directly in touch with political leaders from Asian countries and to get first-hand details on latest developments there. Indonesia, Sri Lanka and Vietnam stood up in the last three years.  Sri Lanka being one of fast growing countries in Asia, we are now planning to send a representative team in August to study new opportunities in the country.”

Stein did not elaborate further on the August ’13 mission to Sri Lanka.

“Sri Lanka warmly welcomes the DAW investment team,” said Minister Bathiudeen, addressing the forum. “Sri Lanka entered the new phase after the end of war in 2009 thanks to the able leadership of our President Mahinda Rajapaksa. We achieved record GDP growth rate in 2011, the best in South Asia. In that year our GDP growth was 11% and according to the Central Bank of Sri Lanka this year, we will exceed 7% GDP growth.

“Due to rising private consumption at 16% in 2011, inflation rose from 6-7% levels to around 9%. Germany is the fourth largest economy in the world and the Europe’s biggest, and is also the leading Eurozone investor in Sri Lanka with 170 investment projects. Among leading German firms in Sri Lanka are BASF Finlay and Kramsky GMBH. German investments in Sri Lanka are protected by the bilateral Investment Protection Guarantee Agreement.  Though the Eurozone GDP, has slowed down, Germany’s exports to the world set a new record in 2012 and as a longstanding trade partner, we are happy to hear of this development. Latest forecasts from German Central Bank show that growth will return to Germany in the first quarter of this year which I am sure you will agree, as very good news for all of us.”

“I am pleased to say that Germany annually buys five percent of our exports, and is therefore a major contributor to our growth.  In its new economic growth phase Sri Lanka is now on its own process to bring international investors to Colombo, taking a leaf from German economic planning.  In this respect I am happy to note that Sri Lanka is learning to improve one key factor that partly contributed to Germany’s success today, that is the use of Private-Public Partnership model. German investors in Sri Lanka can make use of Sri Lanka’s Free Trade Agreements with India and Pakistan and can gain strategic access through 8,700 product lines to 1.6 b South Asian market,” Minister Bathiudeen revealed.