Sri Lanka, Viet Nam ink oil and gas exploration deal

By Uditha Jayasinghe

Sealing Sri Lankan and Viet Nam ties, the Presidents of the two countries yesterday witnessed the signing of eight  agreements, including one on oil and gas exploration.

Speaking at the Sri Lanka-Viet Nam Business Forum Viet Nam President Truong Tan Sang told a packed gathering of delegates and local company representatives that the two Presidents witnessed the signing for Viet Nam oil and gas exploration in the Sri Lanka. However, he did not elaborate on the parties involved.

In addition a Memorandum of Understanding (MoU) was signed between the visiting President and Sri Lankan Trade and Commerce Minister Rishad Bathiudeen on machinery manufacturing cooperation.

The sectors that will directly benefit under the MoU are agriculture machinery, electrical machinery and equipment manufacturing, machines connected with environmental management and industrial safety and environmental friendly technologies.  

Continuing his positive observations at the business forum, the Viet Nam President pledged to continue facilitating business opportunities between the two countries in the future. When asked what the best strategy would be to attract Foreign Direct Investment, he insisted that there were many synergies between the two countries, including a common history.

“We are very keen on sharing our experiences and will continue to do so. After the Viet Nam war, we were also more or less at the same starting point as you are. When we launched the reform process, the focus was political and macroeconomic stability. Consistent and transparency policies are also important,” he said.

After 25 years, Viet Nam has managed to attract US$ 250 billion in FDI with US$ 100 billion on the ground. “Listen to the business people and constantly upgrade the services that the Government can offer,” he advised, adding that he would hold more discussions with the Sri Lankan President to share any information.

He called on the two business communities to discuss ideas directly. Agriculture was another area that was highlighted as being available for development and having potential for cooperation.

“This afternoon we will meet with agriculture officials and expect them to be fruitful, particularly in fisheries. The fields of fish processing and scientific research are also areas for discussion. Construction is also another area that the two counties can concentrate on,” he said.   He encouraged both Chambers of Commerce to expand their relations with a view to investment. “We are ready to receive close friends from Sri Lanka, so come and do business. There exist a lot of cultural commonalities in both countries and we are ready to work in specific areas. The Sri Lankan President and ministers are highly determined to make Sri Lanka more prosperous and this is exactly the thinking of Viet Nam in the past.”

              Sang emphasised on the need for both countries to recognise each others’ business potential and work on labour, taxation and customs law issues.

Welcoming the Viet Nam President and business delegation, External Affairs Minister Prof. G.L. Peiris stressed that the two countries should pool their resources and focus on practical modalities of doing business.   

“At the moment there are over 20,000 foreign companies operating in Viet Nam. The total investment is US$ 200 billion and these companies provide employment for more than one million people and 24% of the economy. This gives some idea of why we must develop economic relationships with Viet Nam.”

Addressing the visiting business delegation of Viet Nam, he said that Sri Lanka should be a focus because of political stability. Without this it would be impossible to attract investment, he opined.

“Sri Lanka has political stability to a level that has never been enjoyed by the country before. Usually a Government loses the people when it is in power for a long time, but in Sri Lanka every election results in the Government gaining more in popularity.”

High literacy rates make Sri Lanka a worthy trading partner with its training being buttressed by the President’s policies, which regard the people of Sri Lanka as a valuable resource. This will increase assets in Sri Lanka. Another advantage is its geographic location, which has enabled the country to enter into pioneering bilateral trade agreements with India and Pakistan.

The Board of Investment (BOI) of Sri Lanka would be of value for the Vietnamese investors who are visiting as a one-stop-shop to begin business relations with this country. He urged the business representatives to take advantage of the incentives provided by the BOI.

Investment is also guaranteed by the Constitution, he said, insisting that there was a “rock solid” base for input. Profits can also be repatriated without any restriction.

It is not necessary for an outside business to work with a local partner, he informed, pointing out that the companies could come into the country directly or through partnerships.

The delegates also participated in presentations from the Export Development Board, BOI and Sri Lanka Tourism. The forum culminated in business-to-business meetings with over 50 local participants.