Sri Lanka mulls reaching out to Far East through Viet Nam, extends invite to ‘Expo 2012’

Addressing members of a visiting high-powered Vietnamese business delegation on Friday 14 October, at Hotel Galadari, Colombo Minister of Industry and Commerce Rishad Bathiudeen invited Viet Nam delegations to Sri Lanka Expo 2012, and suggested that Vietnamese businesses use the Indo Sri Lanka Free Trade Agreement and the Pakistan Sri Lanka Free Trade Agreement as a base to penetrate these two promising markets from Sri Lanka and for its part, Sri Lanka can use Viet Nam as a springboard to reach far eastern markets.

The 40 member business delegation from Viet Nam was visiting Sri Lanka to coincide with the October 14 visit of Viet Nam President H.E. Truong Tan Sang. Among the Vietnamese business delegates at Minister Bathiudeen’s session was Deputy Director General of International Relations Department of Vietnam Chamber of Commerce and Industry Pham Quang Thinh. Among the notables from Sri Lankan private sector was Deshamanya Harry Jayawardena.

Minister Bathiudeen said: “There are opportunities for Vietnamese investments in Sri Lanka in the thrust sectors such as manufacture of agricultural machinery and agro processing, plastic products, fisheries, infrastructure and tourism. I am happy to inform you that the Indo Sri Lanka Free Trade Agreement and the Pakistan Sri Lanka Free Trade Agreement that are now in force, offer the potential for Vietnamese investors to use Sri Lanka as a base to penetrate these two promising markets.”

He added, “Sri Lanka is also keen to strengthen industrial ties with Viet Nam and use it as a springboard to reach the far eastern markets by leveraging the various resources, and also lower manufacturing costs that Viet Nam offers.

For example, the Viet Nam garments industry could synergise with Sri Lanka for international mutual gains. Viet Nam and Sri Lanka can jointly produce garments by combining chains of production. I am pleased to mention that some Sri Lankan companies have already established operations in Vietnam in various sectors.

We have also identified that there are opportunities for Sri Lanka in Vietnam for the promotion of intermediate goods for construction, hotel industry, tea industry and garments industry. Sri Lanka also can offer consultancy/professional services in the fields of engineering, architecture, construction, hotel management and business management.”

According to the Department of Commerce of Sri Lanka, Viet Nam enjoys competitive advantages in the international markets particularly due to availability of unutilized resources after four decades of civil war, high population with comparatively cheap labour in the region, high inflow of US investment with latest technological industries etc.

Viet Nam and Sri Lanka mutually extend favourable tariff concessions for each other’s export products which included under the Global System of Trade Preference (GSTP). The total trade between Sri Lanka and Viet Nam amounted to US$ 65 million in 2010. Total exports to Viet Nam stood at US $ 21 million in 2010 while imports from Viet Nam were at the value of US $ 44 million.

Natural rubber was the main item of import from Viet Nam representing 23 per cent of the total imports. Other main imports are yarn and tractors. Sri Lanka’s main export to Viet Nam was fabrics consisting of 23 per cent of all exports, followed by bran, natural rubber and oil seeds.

Speaking of Lanka-Nam ties, Minister Bathiudeen stressed: “Sri Lanka was one of the first countries to establish diplomatic relations with the Socialist Republic of Vietnam in 1970.  We believe that Vietnam is an emerging Asian Tiger and is one of the upcoming high potential countries to expand Sri Lanka’s trade. I am sure that many MoUs and Agreements that have already been signed between Sri Lanka and Vietnam so far in the fields of Trade, Civil Aviation, Tourism, Economic, Scientific, Culture, Technical Cooperation, avoidance of double taxation, etc greatly help in strengthening bilateral ties between the two countries. The MoUs and agreements signed today morning in Colombo between both countries will further enhance our bilateral relations.”

Elaborating on Sri Lanka’s economic upswing, Minister Bathiudeen said: “I am pleased to state that Sri Lanka’s GDP growth accelerated in the second quarter of 2011 to 8.2 percent, showing that we have begun to reap benefits of peace. The International Monetary Fund has also stressed that Sri Lanka’s macroeconomic conditions are “quite strong” and the nation’s monetary policy stance is “appropriate” to support growth.”