- State giant making early inroads with credit line, options for fully-fledged operations under discussion
- Chairman Dr. Wickramasinghe following an 8-day business visit upbeat on collaborations on fisheries, boat building, tourism, and education
- Flags off the high per capita Indian Ocean nation as a good base for top-end skilled and professional jobs for Sri Lankans
- Opines direct air and shipping services will help boost bilateral economic ties
By Nisthar Cassim
State-owned industry giant Bank of Ceylon (BOC) has turned passionate about Seychelles, not solely because it is a discerning up-market tourist paradise but also due to the vast potential for greater bilateral cooperation at Government level and joint ventures between private sectors.
Having made an eight-day visit recently, BOC Chairman Dr. Gamini Wickramasinghe is raving about Seychelles and upbeat about immense scope of existing and emerging opportunities in the tiny Indian Ocean nation.
The bullish sentiment on Seychelles isn’t by accident. Seychelles President James Michel made a State visit to Sri Lanka in August, marking a major turning point in ties between the two nations. During bilateral discussions, President and Finance Minister Mahinda Rajapaksa informed President Michel that Sri Lanka would be glad to extent a credit line for the benefit of enhancing trade and commercial transactions between the two countries.
As a follow-up, BOC Chief Wickramasinghe, along with Bank’s Assistant General Manager of Overseas Branches Ranjith Haputhanthri, at the invitation of President Michel, visited Seychelles last month to get a first-hand assessment of the country and its potential as well as hold discussions on a string of bilateral initiatives.
“We were very impressed with our findings on Seychelles and the scope for Sri Lanka at public and private sector levels to forge partnerships for mutual benefit. I would say Seychelles is an excellent new opportunity for select Sri Lankan industries, such as boat building, fisheries, tourism, and renewable energy, as well as qualified professionals,” BOC Chairman Dr. Wickramasinghe told the Daily FT. During his stay in Seychelles the BOC team had over 20 different meetings.
At present the bilateral trade between Sri Lanka and Seychelles at $ 2.5 million is relatively insignificant, but Wickramasinghe said if properly coordinated and marketed, bilateral trade has scope for exponential growth.
Seychelles, like the Maldives, relies heavily on two major industries – tourism and fisheries. It spans an archipelago of 115 islands in the Indian Ocean, some 1,500 kilometres (932 miles) east of mainland Africa, northeast of the island of Madagascar. As per Wikipedia, Seychelles, with an estimated population of 90,000, has the smallest population of any African state. It also has the highest Human Development Index in Africa. It is per capita income is a staggering $ 24,726 on a PPP basis and $ 11,170 on nominal terms (as opposed to $ 2,800 in Sri Lanka), but Seychelles also the highest income inequality in the world, as measured by the Gini index.
Wickramasinghe said in recent years there has been rapid progress in Seychelles and the Government headed by President Michel was keen to accelerate it further by forging closer ties with a host of nations apart from encouraging foreign direct investments.
Relations between Sri Lanka and Seychelles have got a fresh impetus following President Michel’s visit in August, whilst following an invitation he extended, President Rajapaksa is likely to reciprocate with a State visit shortly as well. There has been an exchange of few Ministerial visits as well with the most recent been that by Fisheries and Aquatic Resources Minister Rajith Seneviratne. Formal establishment of diplomatic ties is expected next year.
Areas of potential for cooperation
BOC Chairman said that Seychelles relies heavily on imports currently sourced via Dubai hence Sri Lanka’s agriculture and food industries have the potential to tap this new market provided various requirements are met on a competitive basis. Servicing the booming and high value tourism sector is another opportunity.
Qualified and skilled Sri Lankans are already holding top jobs in several sectors such as legal, medical, education, hotels, engineering etc and there is potential for a much higher pool including in the IT sector. Recently, previously imposed restrictions on repatriation of expatriate earnings to their home country had been lifted, which BOC Chief said will encourage skills and qualified Sri Lankans to consider Seychelles as an attractive country for employment.
On the manufacturing or light engineering side the most immediate area that Sri Lanka and Seychelles are looking at is boat building. Via Neil Marine, several made in Sri Lanka fishing and other boats have been supplied in the past.
In fact President Michel during his August visit to Sri Lanka took time off to tour the Colombo Dockyard and discussed various topics including possibilities of cooperation with the dockyard to meet ever increasing needs in the fields of shipbuilding and ship repair in Seychelles.
“There are further opportunities to supply fisher and pleasure boats,” said Wickramasinghe, adding that ship repair and maintenance is another ancillary sector which Sri Lanka can tap for prospects.
Given the fact that Seychelles is a world leader in sustainable tourism and luring the top-end of the tourist market, BOC Chairman said big Sri Lankan hotel companies can explore new opportunities for direct investments or joint ventures. His suggestion stems from the fact that already select Sri Lankan hotel giants are successful in the Maldives in addition to making inroads in India and the Middle East. “There are several islands for bidding for interested hoteliers and investors,” Wickramasinghe said.
Being the country’s biggest bank, BOC naturally has the most serious interest in tapping the opportunities in the financial services sector and via it serve the fisheries, tourism, tertiary and higher education and other sectors as well as the expatriate community.
At present BOC has a corresponding banking relationship with Mauritius Commercial Bank (MCB) in the Seychelles where UK giant Barclays is the most dominant player in the financial services. A few local banks also operate.
“We are exploring several options with regard to Seychelles. One is setting up a branch. Another is strategic partnership via an equity stake or an acquisition,” BOC Chairman said, adding that no firm decision has been made as yet. A revolving line of credit to Seychelles is on the cards, details on which are being currently negotiated. BOC is likely to draw strength from the success as well as learnings from a similar facility (around $ 10 million) it has for the Maldives. It is very likely that BOC’s credit line will be promoted among Seychelles public and private sectors to source Sri Lankan products and services. A team from the Seychelles is due to further discuss the credit line as well.
According to Dr. Wickramasinghe, establishment of direct air and shipping services between Sri Lanka and Seychelles will ensure the potential for greater bilateral economic ties is maximised. Air services will boost two-way tourism, a possible “island hopping” offer linking Sri Lanka, Seychelles and the Maldives as well as encourage global tourists to Seychelles going via Colombo hub. At present bulk of the air traffic comes via the Middle East, especially the UAE. Same goes to sea cargo with direct services from India also growing.
“We used our visit and the meetings to see how we could help Seychelles, firstly in the fisheries sector and secondly in tourism. We will be doing a feasibility study and assess the business potential Seychelles can have with Sri Lanka,” Dr. Wickramasinghe said. “We can see the potential and the bank can join in the country’s development efforts. I think we can mutually benefit from this,” BOC Chairman added.