Govt. keen to triple rubber industry to $ 3 b

Lanka News Papers - 31/08/2014

Sri Lanka is on its way to making the rubber industry a $ 3 billion sector, Minister of Industry and Commerce Rishad Bathiudeen stated following the announcement that the 4th Global Rubber Conference (GRC) and Exhibition will be held in Colombo from 27 to 30 October.

The GRC, formerly held as the Asean Rubber Conference until 2010, has been held in Cambodia (2011), Vietnam (2012) and Indonesia (2013) so far, while Sri Lanka will be hosting it for the first time with over 700 trade visitors and 28 countries set to participate.

The event, co-organised by the Sri Lanka Export Development Board and Confexhub, will be themed Sowing the Seeds of Sustainable Future . The Ministry of Plantation Industries and the Ministry of Industry and Commerce have extended their support for the event as well.

We are now aiming at an ambitious $3B rubber industry in the coming decade. To arrive at this $3B in a viable manner, it is essential for us to support the rubber industry including growers. I believe it is time for a long term development plan for this sector, said Minister Bathiudeen, speaking at the launch of GRC in Colombo on Thursday.
There are several important socio-economic reasons to strengthen this industry. It is time for a long-term development plan for the rubber sector, he stated.

In that context he said that hosting the GRC will be a great opportunity for Sri Lanka to take the sector to the next level, providing local stakeholders a chance to network with their international counterparts.
In 2013, Sri Lanka earned $ 72 million in rubber exports as well as $ 887 in rubber finished products. The total earnings of $ 960 million was a 100% increase in earnings from 2009, the Minister added.

Sri Lanka is currently the sixth largest exporter and the eighth largest natural rubber producing country in the world while the Government has set in place a 10-year plan to develop the sector.

Meanwhile, the Ministry of Industry and Commerce also announced the implementation of two projects including the first ever rubber industry database as well as a national rubber research consensus at a cost of more than $ 46,000.

Commenting on the current situation regarding the rubber sector in Sri Lanka, Export Development Board (EDB) Chairman and Chief Executive Bandula Egodage explained that the rubber industry was separated into the plantation services, pertaining to raw rubber production, and the rubber product manufacturing services.

He stated that the EDB has initiated several projects to improve the industry while it encouraged value addition as opposed to raw exports.

We do not intend to curtail raw rubber production in Sri Lanka, but as part of our export vision, we are looking to add value to our exports. That is our mandate and direction, he said.

Egodage highlighted the importance of networking, awareness, investment and global recognition which is where hosting the GRC in Sri Lanka would benefit local stakeholders.

The GRC will bring together stakeholders from the US, Europe, East Asia, North Asia and ASEAN countries to discuss issues concerning the global NR situation, strategies and challenges for sustainability, enhancing quality and several other issues.

The International Rubber Research and Development Board Secretary General Dr. Abdul Aziz urged all rubber players, policy makers, industry experts, producers and manufacturers to make use of this opportunity to discuss strategies aimed at expanding the rubber industry for global sustainable growth.
He explained that current global rubber prices are not conducive but predicted that they would recover. The GRC will help participants discuss the challenges that lie ahead as well as new material and strategies to improve value addition.

According to Dr. Aziz, over 50,000 products are made from rubber and around 70% of rubber production goes into the tyre industry.

He shared his optimism regarding the future of the global sector, revealing current initiatives that focus on working with different species of rubber trees.

We are currently only working with one species (Hevea brasiliensis) but there are nine recorded species of trees. Projects are under way to head into the Amazon jungle in Peru to collect these other species, he said.
Confexhub CEO and Director of the Organising Committee of the GRC, Paul Yeo briefed the gathering on the itinerary for the four-day event, underlining its key speakers and segments.

The conference will feature speakers from 12 countries, 20 paper presentations by the cream of the rubber industry covering topics under six special-focused areas and a forum discussing venturing into new planting areas in non-NR producing countries, he said.

The conference will also include a pre-conference study tour of the Sri Lanka Rubber Research Institute as well as a post-conference half-day tour to the only rubber auction in the world, which is administered and managed by the Colombo Rubber Trader Association.

Sri Lanka-China FTA deal during Chinese President’s visit next month

Sunday Times - 31-08-2014

Sri Lanka will be launching its Free Trade Agreement (FTA) with China making the biggest leap forward in relations between the two countries in more than 60 years, during Chinese President Xi Jinping’s state visit to the island next month, official sources revealed.

Mr. Xi will be accompanied by a 150-member top level delegation including senior officials, billionaire businessmen industrialists and investors.

The Chinese leader will become the first President to visit Sri Lanka since former leader Li Xiannian in 1986. His visit assumes significance in strengthening ties between the two countries, with China investing heavily in the island nation, the sources said. The joint feasibility study on the FTA has been finalised and negotiations on formulating the agreement including the negative list are underway between officials of the departments of commerce between the two countries, a senior government official told Business Times.

The agreement will cover wide areas relating to trade, services, tariffs, market access in China, diversifying Sri Lanka’s exports and overall enhancement of the country’s export potential to China. Sri Lanka is currently negotiating 100 per cent tax concessions for Sri Lankan exports including apparels, coconut, rubber, tea based products, precious stones and jewellery, etc, a senior Treasury official said adding that Sri Lanka’s professional services would not be opened to China under this agreement. China is to get tax concessions on exports of large machinery and equipment used in the construction sector but not manufactured locally.

However he said that these areas are still under negotiations and all these aspects would be taken into consideration before finalizing the agreement, he revealed. China is the 18th largest export market for Sri Lanka with exports of US$ 121 million in 2013, just 1 per cent of total exports of Sri Lanka and the import of US$ 3 billion worth of goods to Sri Lanka equals the value of goods imported from India. This indicates a huge unfavourable trade deficit between the two countries, he disclosed.

Last week, the Business Times quoted Commerce Department Director General R.D.S. Kumararatne as saying that the FTA would most likely be ready for signatures by end 2014 or next year.

Rubber Industry Facing Great Challenges

The Sunday Leader - 31/08/2014
By Roy Silva

 

The rubber industry is facing great challenges from an increasingly competitive global market, said Dr Abdul Aziz, Secretary General of International Rubber Research and Development Board (IRRDB) and also the Chairman of Confexhub Malaysia on Thursday in Colombo.

Announcing the Global Rubber Conference to be held in Sri Lanka in October, he said that in the past few years, many other commodities had surpassed the rubber industry and therefore, it was imperative for the rubber industry to gear up and meet those challenges. The 4th Global Rubber Conference (GRC 2014), one of the world’s leading conferences on rubber sector, is to be held in Colombo from October 27 to 30.

Sri Lanka, the world’s 6th largest exporter and the 8th largest natural rubber producing country, will be hosting the event co-organised by the Sri Lanka Export Development Board and Confexhub with the strong support from both the Ministry of Plantation Industries and the Ministry of Industry and Commerce of Sri Lanka. ‘Sowing the Seeds for Sustainable Future’ is the theme of the event held to provide rubber and rubber products experts and policy makers, captains of industry and serious investors a platform to converge and meet face-to-face to discuss a wide spectrum of commercial, research and development and the 2014-15 price outlook.

Over 700 trade visitors and delegates from 28 countries including the Americas, Europe, East-Asia, North-Asia and ASEAN are expected to participate in the conference to discuss issues on the current global situation, strategies and challenges for sustainability, enhancing quality, tyre and dipped goods industry outlook and development, etc.

World Export Development Forum 2014 to be held in Africa for the first time

The forum is slated to take place in Kigali, Rwanda on 16-17 September, under the theme SMEs: Creating jobs through trade.

The World Export Development Forum (WEDF), a flagship event of the International Trade Centre (ITC), is bringing its 14th edition to Africa, with a dedicated focus on entrepreneurs.

Dedicated to supporting trade-led inclusive and sustainable development, the forum will be held in Africa for the first time, and is slated to take place in Kigali, Rwanda on 16-17 September, under the theme SMEs: Creating jobs through trade.

Besides, participants at the 14th World Export Development Forum (WEDF) will have the opportunity to hear expert views from entrepreneurs, policymakers and representatives of trade support institutions on how both new technology and traditional sectors can help promote growth.

Speakers include the Director-General of the World Trade Organization (WTO), the Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Editor of the Financial Times.

SMEs are the backbone of the global economy, especially in developing countries, where they contribute two-thirds of employment.

Their role is even more important in least developed countries, where they account for 80% of jobs and are key to inclusive growth. Increased participation of SMEs in regional and global trade leads to improved livelihoods for a large segment of the population, including for women and youth.

SMEs’ contribution to job creation in developing countries is thus essential. They will be a key source of employment as 500 million men and women enter the global labour market by 2030.

Among the confirmed speakers at the event with focus on entrepreneurial experiences is Ashish J Thakkar, Founder of Mara Group, which has activities ranging from real estate and tourism to financial services, information and communications technology, renewable energy and manufacturing.

The company operates in 18 African countries and has a foundation to support emerging African entrepreneurs.

Experts working in emerging sectors, such as electronic commerce and mobile technology, will comment on the potential for economic growth in these areas.

Speakers at WEDF will also come from international organizations, including Roberto Azevêdo, Director-General of the World Trade Organization; Anabel González, Senior Trade and Competitiveness Director at the World Bank; Márcio Favilla Lucca de Paula, Executive Director for Operational Programmes and Institutional Relations at the World Tourism Organization; and Aeneas C. Chuma, Regional Director for Africa at the International Labour Organization.

Among the many high-ranking ministry officials speaking at the event are François Kanimba, the Rwandan Minister of Trade and Industry; Phyllis Kandie, the Cabinet Secretary of the Ministry of East African Affairs, Commerce and Tourism of Kenya; and Humberto Santos de Brito, the Minister of Tourism, Industry and Energy of Cape Verde.

Representatives of trade support institutions who will speak at WEDF include Mulu Solomon, the Honorary President of the Ethiopian Chamber of Commerce and Sectoral Associations; Richard Sezibera, Secretary-General of the East African Community; and Bandula Egodage, Chairman and Chief Executive of the Sri Lanka Export Development Board.

WEDF is a unique global forum dedicated to discussing innovations in export development and export competitiveness, and to identifying and analyzing the challenges faced by developing countries and economies in transition.

WEDF will bring together over 500 senior national and international policymakers, heads of trade support organizations, business leaders and representatives of international agencies. Through a varied programme, participants will increase their practical knowledge in the latest innovations, processes and policies, and establish new partnerships and contacts through networking.

Lankan biz throng first Seychelles forum in Colombo

Asian Tribune - 27/08/2014

Pierre Laporte (Minister for Finance, Trade and Investment of Seychelles-second from right) gifts a ‘Coco de mer’ sea coconut prevalent only in Seychelles to Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka-second from left) on 27 August in Colombo as Bandula Egodage (Chairman & CEO-EDB-far left) and Waven William (Seychelles Ambassador to Sri Lanka-far right) look on.

No less than 130 reps from 125 Lankan firms thronged the first bilateral B2B call between Sri Lanka and Seychelles biz ever to be held in Colombo on 27 August. “Today’s event can be a stepping stone for more bilateral trade between both countries, which is an urgent need at this moment. The total bilateral trade has been low at only $3.7 Mn. Today’s initiative therefore is a major step in this direction” said Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) on 27 August in Colombo.

Minister Bathiudeen was addressing the inauguration of “Seychelles Trade and Investment Forum-Sri Lanka:

Fostering Economic Partnership” event organised by the EDB and held on 27 August in Colombo. More than 130 Lankan private sector representatives from 125 companies packed the three hour long in-depth session of presentations of 27 August. Seychelles’ 20 member delegation is led by Pierre Laporte (Minister for Finance, Trade and Investment of Seychelles), and joined by Rupert Simeon (CEO of Seychelles Investment Board), Mrs Anne Lafortune (Principal Secretary – Department of Tourism), Glenny Savvy (CEO-Island Development Company) as well as such Seychelles firms as Le Grand Trianon Marie-Antoinette Restaurant, SAP Construction, INOVATECH Trading, Doubleclick Exchange, Fashion and Sportsworld, Silver Crystal Home Décor, Seychelles Trading Company, and Clifford International Business Services joining the visiting Sri Lankan delegation.

Sri Lankan firms operating in Seychelles such as Bank of Ceylon, Sanken Overseas and Seychelles government institutions such as Seychelles Investment Board, Seychelles Fishing Authority, and Seychelles Tourism Department were also taking part in the delegation.

Addressing the event, Minister Bathiudeen said: “Being Indian Ocean Islands, both countries share many long standing issues, trends, as well as benefits that are similar in nature with historic friendship. Relations between Seychelles and Sri Lanka became stronger after the visits of Heads of States from both countries to each other’s starting in 2010. The visit of His Excellency President of Seychelles Mr James Michel to Sri Lanka four years ago around this time in 2010, followed by our President His Excellency Mahinda Rajapasa’s visit to Seychelles in 2013 and this June, as well as the opening of Sri Lanka High Commission in Seychelles this year have brought bilateral cooperation and understanding to new levels. It is important for us to discover in what context this bilateral trade and business cooperation would be placed–in that how a Forum of this nature, could be leveraged.”

Minister said, “I believe that there are many avenues and possibilities but an important answer is in the gateway synergies of both countries. In that, just as Seychelles is the gateway of investment and trade to African continent, Sri Lanka too is the hub and the gateway to the more than 1.2 billion South Asian market. It is time that investors and businesses at both sides, make use of these potentials. Today’s business forum is a way to unlock these bigger opportunities. For example Seychelles investors, entering Sri Lanka can consider manufacturing partnerships here and make use of our FTAs with India and Pakistan, to access the South Asian markets. I am pleased that with today’s event can be a stepping stone for more bilateral trade, which is an urgent need at this moment. The total bilateral trade between Sri Lanka and Seychelles has been low at only $3.7 Million in 2013. Main products exported from Sri Lanka include, tea, fishing vessels, cereals and sausages, and the main import from, Seychelles are some spices. We believe that our gems and jewellery, furniture, other types of vessels, seafood and plastic products, to have strong potential in Seychelles market. It is time we find ways to increase this, low bilateral trade and today’s initiative, is a major step in this direction.”

Sri Lankan Minister also said, “I think we could both agree that, connectivity too is an important component to enhance cooperation between us. Mihin Airlines commenced flights to Seychelles last November and SriLankan Airlines too has code share arrangements, between Sri Lanka and Seychelles. Equally important is maritime cooperation. Hon Mr Jean Paul Adam, the Foreign Minister of Seychelles who paid a courtesy call on me in 2012 April, informed me that Sri Lanka has become, Seychelles’ ship building hub, which is good news for us. We have almost 25 active boat yards delivering high standard vessels. Of this 25, six are directly exporting their boats. This is yet another promising investment opening for Seychelles investors. I am pleased to say our annual boat exports around the world have increased by 45% to $ 82Mn in 2013. Despite several leading Lankan business enterprises, such as Bank of Ceylon, Nawaloka, and Sri Lanka Insurance, have actively investing in Seychelles, we observe that Seychelles investors are yet to partner here. Therefore we invite Seychelles investors to partner with us and begin investing here. We allow 100% ownership for foreign investors, profit repatriation, as well as constitutional guarantee of safety for global investors. Specifically, Seychelles investors can, leverage such synergies as travel and tourism, fisheries, boats as well as maritime cooperation with Sri Lanka. Seychelles’ previous experience in creating joint Seychelles-Africa tour packages can help formulate Seychelles-South Asia travel packages via Sri Lanka. I also invite “Seychelles Tourism” to tap the surging Sri Lankan tourist market.”

According to the Department of Commerce, the total bilateral trade between Sri Lanka and Seychelles was reported at $3.7 Mn in 2013. Main products exported from Sri Lanka included tea, fishing vessels, cereals and sausages, while the main import from Seychelles was some spices. Sri Lanka believes that gems and jewellery, furniture, other types of ocean vessels, seafood and plastic products, to have strong market potential in Seychelles. As for COMESA, it began in 1994 and currently has 21 member states (Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe) opening an African market of 390 million.

Addressing the event, Minister Laporte said: “I have been following Sri Lanka closely. We are impressed by Sri Lanka’s development. Seychelles and Sri Lanka share similarities and has a special friendship. The bilateral cooperation has seen renewed momentum in exchange of expertise in various fields such as education health maritime nautical services legal aviation and defence. Our government is committed to further strengthen the affinity of people of Seychelles and Sri Lanka. We continue to overcome the constraints shared by us as Island nations. Given our strategic location at East of Africa, and South of Asia and the Middle East, Seychelles in very accessible and open for business. We continue to attract investors from all parts of the globe. We hope today’s forum can create opportunities for both countries. We see ample opportunities in key sectors such as tourism, industries, fisheries, renewable energy, financial services, agriculture etc. With the recent provision of offshore financial services, our financial services have grown. Our close collaboration with OECD countries will ensure that our country will follow highest standards once we accede to WTO. We have seen an improvement in the quality of our human resources recently. We have a network of membership to Indian Ocean Commission and Indian Ocean Ring. We are vigorously engaged in signing agreements with countries of African continent as the gateway to Africa. This Forum today is also an effort to extend our international cooperation opportunities. This is the first that we organised this year. I hope this forum will entice you to commence business with Seychelles. I convey my gratitude to government of Sri Lanka-specially to the Minister and Ministry of Industry and Commerce of Sri Lanka as well as the External Affairs Ministry of Sri Lanka.”

Bandula Egodage (Chairman & CEO-EDB), addressing the event said: “This is a remarkable milestone. EDB is entrusted with enhancing exports of the country. The three objectives of this Forum by EDB are to create awareness on investment opportunities at both countries for each other, provide information on potential trade opportunities and thirdly, find networking opportunities.”

High level ‘Nam push for Lanka investments

Asian Tribune - 25/08/2014

The Government of Vietnam, while unravelling Lankan investment volumes within its borders, signalled on 22 August of its own investment push towards Sri Lanka-and coming from its high levels. “Already 10 Sri Lankan investment projects are in Vietnam. Vietnam investors and businesses too are eager to go out of the country and invest.

I hope the Government of Sri Lanka would create an enabling environment for Vietnamese business and investors” said a keen Pham Binh Minh (the Vietnamese Deputy Prime Minister who is also the Minister of Foreign Affairs of Vietnam) on 21 August in Hanoi.

Deputy PM Binh Minh was addressing Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) on the afternoon of 21 August at Hanoi’s Foreign Ministry offices located at Ba Dinh. Minister Bathiudeen and his official delegation were making a courtesy call on Deputy PM Binh Minh on the afternoon of 21 August. Joining Minister Bathiudeen at the meeting were RDS Kumararatne (DG-Department of Commerce), Bandula Egodage (Chairman & CEO-EDB) and Ivan Amarasinghe (Sri Lanka’s Ambassador to Vietnam).

“Congratulations on your delegation’s successful visit to Vietnam. I have been informed that the Joint Trade Sub Committee between the two countries is now a reality” said an upbeat Deputy PM Binh Minh, and added:

“Formal relations between our two countries go a long way back to July 1970. Since then we have been able to maintain regular bilateral diplomatic contacts at higher levels. Our modest bilateral trade is now expected to increase to $1B by 2015/’16. It is clear the our current trade levels are far below its real potentials. The responsibility to meet this target now lies with you-Minister Bathiudeen, and on our side, our own Minister of Industry and Trade of Vietnam. In this background I am glad the Sub Committee has been set up. I really hope and keen that we can buy more products from Sri Lanka. I believe that to increase trade and investment, it is time that both countries make bigger progress on the existing double taxation avoidance and bilateral investment treaties. More importantly, I am pleased to say that there are already 10 Sri Lankan investment projects in Vietnam at a cumulative investment level of $ 14 Mn. Vietnam investors and businesses on the other hand, are eager to go out of the country and invest. I am positive that the Government of Sri Lanka would create an enabling environment for Vietnamese business and investors! We look forward to B2B level exchanges. We also look for cooperation on agro sector, a key sector for our economy as well as society, as well as tea sector of Sri Lanka since Sri Lanka being a major tea producer and exporter.”

At present Vietnam ranks as the 40th export destination and the 23rd supplier, accounting for 0.43% of our total exports and 1.06% of our total imports respectively. The total trade between both countries which stood at US dollars 119.5 Million in 2012 increased to US dollars 224.4 Million in 2013 registering a remarkable growth of 88%. Since 2011, Petrovietnam Oil Corporation (PVOil) has supplied to its Sri Lankan partner with petroleum products. In the field of industry, the two countries have concluded a number of important documents, creating a legal framework for further enhanced cooperation activities.

Responding to Deputy PM Binh Minh, Minister Bathiudeen said: “I thank Your Excellency’s interest to enhance trade and investment cooperation with Sri Lanka. In fact, we extend a warm welcome to Vietnamese investors to enter Sri Lanka and yes, our government is ready and extend its fullest support to Vietnamese investors entering to Sri Lanka. Sri Lanka allows 100% ownership to foreign investors’ capital, total profit repatriation and constitutional guarantee for their capital. Sri Lanka’s rubber, light electronics and tourism are sectors of investments that could serve the Vietnamese investors profitably. Our FTAs with India and Pakistan gives access to prospective Vietnamese investors more than 1.2 Bn ready market. We also seek tech know how for agro sector and your investments and technology could be leveraged by our agro sector as well. I totally agree that the time has come for business to business level cooperation between the two countries. We are the globally reputed Pure Ceylon Tea brand and I am happy we got Vietnam market’s attention as well. We also welcome your support our fishery and aquaculture.”

Deputy PM Binh Minh said: “I stress that Vietnam has good expertise in Fisheries and aquaculture, and we are happy to extend our support to enhance your fisheries as well. I shall speak to Vietnamese Minister of Fisheries and Aquaculture about supporting your fisheries.”

Responding, Minister Bathiudeen said: “We thank you for taking the initiative to contact your colleague Minister of Fishery and Aquaculture on our behalf. These new avenues of cooperation further strengthens our historic friendship.”

Both Minister Bathiudeen and Deputy PM Binh Minh stressed of the need for continued dialogues between Sri Lanka and Vietnam.

Toxic toys

It goes without saying that toys are bought with the hope that it may cheer up a child. But what if we’ve been taking this nothing for granted all along. What if you were told that the toy you recently bought is replete with a highly toxic chemical that puts children at great risks?
A laboratory study by the Centre for Science and Environment in India showed that the presence of phthalates, a highly toxic chemical, was present in toys sold in the Indian market.
These toxic chemicals which are not regulated or monitored by the government, puts children inadvertently at risk. Scientific evidence has shown that exposure to phthalates can cause a variety of health problems ranging from asthma to pre-term birth.

It is for this reason that several countries have laws and regulations that ban the use these substances in toys. The European Union was the first to regulate the use of Phthalates in these toys. It has prohibited the import, sale and manufacturing of toys and childcare articles containing the toxin to 0.1 percent concentration by mass of the plasticized material. Toys containing these chemicals in higher quantities cannot be sold in EU countries.
Meanwhile, in the USA, the Consumer Product Safety Commission in 2008 enacted a regulation which makes it compulsory for third party testing and certification. It has also banned six types of phthalates commonly found in children’s toys.
Although India does not have any regulations to control or monitor the use of phthalates in toys, it does have a set of voluntary standards covering safety aspects of toys formulated by the Bureau of Indian Standards (BIS). Due to the lack of any certification license, the authorities in the country cannot enforce it against manufacturers of toys.

What are phthalates?

Phthalates are organic chemicals commonly used as plasticizers to make plastic supple. They are responsible for plastic products being cheap, easy to clean — and toxic. An example of a product that may have phthalates is a product like a children’s rubber duck - the flexible plastic feel may be from the use of phthalates in the manufacturing process. Other examples include
How harmful is it?
Phthalates can damage the male reproductive system, impair the lungs and affect the duration of pregnancy. Laboratory tests on mammals indicate phthalates can trigger asthma and allergies, and lead to poor semen quality, genital defects, premature breast development and skeletal defects. Children under three years are more likely to be exposed to phthalates because they tend to chew and suck on plastic toys – and since their metabolic, endocrine and reproductive systems are immature, they are more vulnerable as well.
The double-standards
The head of a popular brand of toy maker in Sri Lanka was quoted in the media as saying that there are no compulsory standards in the country for toys, however the company which does export to the EU market conferred that they must obtain certificates if they wish to export. An EN71 is not only compulsory but costly. It confirms that the product does not contain paints or inks which may contain lead or arsenic.
They are also specific about toy’s physical attributes citing that it should not have any sharp edges, small particles and much more. According to the Sri Lanka Export Development Board, many companies are venturing into the production of toys for the export market.
The current standard set by the Sri Lanka Standards Institution namely the SLS 608 only deals with the safety requirement for toys and simulated sporting equipment. It is however limited to the specific points of design and construction essential for safety.

Historic Lanka-Vietnam trade link established in Hanoi

Asian Tribune - 22/08/2014

Rishad Bathiudeen (Minister of Industry and Commerce–right) appreciates the souvenir gift from the Minister of Trade and Industry of the Vietnam Vu Huy Hoang (centre) at the Head Quarters of Ministry of Industry and Trade of Vietnam, in Hanoi.

The first ever Sri Lanka Vietnam official trade mechanism went live in Hanoi on 21 August. And the new mechanism, according to the Vietnamese side, is the practical way for bigger trade cooperation in the form of an Agreement.

“Today’s new beginning will open many new opportunities for both countries. I am fully convinced that setting up of a Joint Working Group (JWG) or Joint Trade Sub Committee, would lay a concrete foundation to enhance the existing bilateral trade and economic relations new heights. My Ministry would closely monitor the progress” said n Rishad Bathiudeen (Minister of Industry and Commerce of Sri Lanka) at the Head Quarters of Ministry of Industry and Trade of Vietnam, Hanoi on 21 August.

Minister Bathiudeen, who made an in-depth and lengthy submission, was addressing the opening session of the bilateral discussions to establish the first Joint Trade Sub Committee (JTSC) between the two countries, held at the Head Quarters of Ministry of Industry and Trade of Vietnam, Hoan Kiem District, Hanoi on 21 August.

A six member team led by Minister Bathiudeen is currently in Hanoi for the talks to setup this first official trade mechanism. Along with Minister Bathiudeen in the delegation are RDS Kumararatne (DG-Department of Commerce), and Bandula Egodage (Chairman & CEO-EDB). Also joining the Sri Lankan team is (HE) Ivan Amarasinghe (Sri Lanka’s Ambassador to Vietnam). The seven member Vietnamese official delegation is led by the powerful Minister of Trade and Industry of the Vietnam (HE) Vu Huy Hoang and joined by his top commanders-Nuuyen Phuc Nam (Head of Western Asia Markets), and Qui Hui Son (DG-Vietnam Trade Promotion) as well as Deputy Directors. RDS Kumararatne (DG-Department of Commerce) is leading the technical sessions of the first JTSC in Hanoi.

“We commend and highly appreciate Sri Lanka’s efforts on economic and social development strategies-in that povery alleviation and economic development in the short period after the end of war. We greatly appreciate Lanka’s improvements in Human Development Index rankings, poverty reduction and international economic development as well as policies and direction of Sri Lanka’s economic development strategy under Mahinda Chinthana development framework. Vietnam in fact wants to learn from Sri Lanka about the five hub strategy. These are good lessons for us to apply for the social development of our country as well. Vietnam economy too, similar to Sri Lanka has faced difficulties due to global recession. Despite this Vietnam too managed to reconrd strong GDP growth-in 2013 at 5.32% and in the first seven months of 2014 at 5.5%. Our inflation which was at 6.2% in 2013 fell to a very low 1.45% in the first seven months of 2014! Our total international trade which stood at $ 266 Bn in 2013, expected to rise to $300 Bn. We have managed to bring our poverty household rate to 9% by 2013. Both Sri Lanka and Vietnam have lots of unrealised potential in joint economic cooperation and investments-in that the current trade volumes are modest and not in par with the strong bilateral cooperation that exists between both countries-and there is vast potential for new heights and lets work together. I request Sri Lanka Ministry of Industry and Commerce under Minister Bathiudeen to establish the Joint Sub Committee on Sri Lanka side and work with us. We take note of Sri Lanka’s proposal and engage relevant agencies in Vietnam to for this effort-both sides will continue their exchanges in this regard. The most practical way after establishing the JTSC is to study the possibility of establishing the Preferential Trade Agreement between both countries.”

At the 3rd Meeting of the Joint Commission held in Hanoi in July 2012, an ambitious target was set at for the total value of bilateral trade to reach US$ 01 Billion in the long term, commensurate with the decision taken by the two leaders during the visit of H.E. the President Mahinda Rajapaksa’s to Vietnam in October 2011 to Colombo. At present Vietnam ranks as the 40th export destination and the 23rd supplier, accounting for 0.43% of our total exports and 1.06% of our total imports respectively. The total trade between both countries which stood at US dollars 119.5 Million in 2012 increased to US dollars 224.4 Million in 2013 registering a remarkable growth of 88%. Since 2011, Petrovietnam Oil Corporation (PVOil) has supplied to its Sri Lankan partner with petroleum products. In the field of industry, the two countries have concluded a number of important documents, creating a legal framework for further enhanced cooperation activities. Those documents include: the MOU on Machinery Manufacturing Cooperation between the Ministry of Industry and Trade of Viet Nam and the Ministry of Industry and Commerce of Sri Lanka; the MOU on Oil and Gas Cooperation between the Ministry of Industry and Trade of Viet Nam and Ministry of Industry and Prime Minister’s Secretary Office of Sri Lanka.

“Today’s new beginning will open many new opportunities for both countries” said Minister Bathiudeen, addressing the session, and added: “Sri Lanka being a founder member of the GATT 1994, as well as WTO has been fully committed to liberal and market oriented Economic policies which aimed at achieving greater integration into the world economy. Sri Lanka has been an active participant in the Doha Development Agenda, having tabled, together with other countries, proposals on: technical barriers to trade; geographical indications; labelling of textiles, clothing, footwear, and travel goods; preferences erosion; and trade facilitation. These initiatives and consistency in our economic policies under able leadership of His Excellency Mahinda Rajapaksa, the President of Sri Lanka with his vision for the future under “Mahinda Chinthana” have brought Sri Lanka much closer with the global partners and in particular, with the countries in Asia. “

Sri Lankan Minister said, “The trade objectives within "Mahinda Chintana" also focus on increasing integration of the Sri Lankan economy with global markets. The latest IMF assessment has given a glowing tribute to Sri Lanka’s economic performance. Its July 29th statement says: “Sri Lanka’s economic growth has been one of the fastest among Asia’s developing economies in recent years. After falling to 6.3 percent in 2012, real GDP growth accelerated to 7.3 percent in 2013”. The Free Trade Agreements that Sri Lanka entered into with India (year 2000) and with Pakistan (year 2005) have already become the gateways for the manufacturers and investors in Sri Lanka in accessing the sub-regional market with over 1.6 billion people. Sri Lanka is progressing towards becoming South Asia’s Economic nucleus, through developing 05 hubs namely Aviation, Commercial, Maritime, Energy and Knowledge. In the realm of bilateral relations, Sri Lanka and Vietnam have been enjoying warm and cordial relations over a long period of years and it has been steadily developed based on mutual respect and shared values. In this context, I am pleased to observe that the trade volume between Sri Lanka and Vietnam has been growing at a steady pace in recent years. “

He added, “The total trade between both countries which stood at US dollars 119.5 Million in 2012 increased to US dollars 224.4 Million in 2013 registering a remarkable growth of 88%. These facts signify that there is huge, unrealized trade potential between two countries that we jointly need to exploit. However, there is no mechanism in place between the two countries at the government level, at present, aimed at strengthening existing bilateral trade and commercial relations. I am glad to learn about growth in the Vietnam Economy and in particular the growth in the industrial and high tech sectors. I am also confident that both countries would find many business opportunities which may be complementary to each other. Ton Sinh Thanh, the Vietnamese Ambassador who just returned to your country after his term in Sri Lanka, has been instrumental in further strengthening relations between our two countries. He recently opened a Vietnam Trade Center in Colombo. He is also of the view that possible Free Trade Agreement between the two countries would help to further improve the trade and economic relations. In this context, I am fully convinced that setting up of a Joint Working Group (JWG) or Joint Trade Sub Committee, comprising senior officials from the two countries would lay a concrete foundation to enhance the existing bilateral trade and economic relations new heights. I have no doubts that the deliberations of our technocrats would finalize modalities of the Joint Working Group. My Ministry would closely monitor the progress towards enhanced trade, investment and economic cooperation between our two countries. I am therefore, confident that we may jointly be able to create a trade facilitating environment towards this objective.”

Sri Lanka to increase trade and investment with China

China.org.cn

Sri Lanka will focus on increasing trade and investment with China as well as broadening the scope of a proposed Free Trade Agreement (FTA), a top official said on Tuesday.

Sri Lankan Investment Promotion Minister Lakshman Yapa Abeywardene made the remarks during an interview with reporters.

He said relations between Sri Lanka and China have leapfrogged since 2008 with around 5 billion U.S. dollars in infrastructure loans being given to the Sri Lanka government by China for various massive projects including ports, airport, highways and railroads.

One of the biggest projects is a 1.2-billion-U.S. dollar coal power plant in the northwest of the island, also the first in the country.

But trade has remained low with exports accounting for about 1 percent of Sri Lanka's 1.3-billion-U.S. dollar sector.

Elaborating on the Sri Lanka-China Free Trade Agreement (FTA), Abeywardene noted that a target of 2 billion U.S. dollars in Foreign Direct Investment (FDI) has been set for 2014 with volumes increasing over the next few years.

He also stressed the need to make it as comprehensive as possible to encourage the increase of trade.

"We need to double our current targets to achieve above 8 percent growth as planned by the government. Greater trade and investment from China can be a significant part of this. Already Chinese tourists are increasing and this is just one of the many sectors for investment," he said.

Chinese arrivals in the first six months of 2014 jumped a significant 137.2 percent to 52,230 compared to the same period last year, according to the latest data from state-run Tourism Development Authority (SLTDA).

China remained the third largest market for tourists to Sri Lanka behind India and Britain, recording a 125.1 percent increase in June 2014 compared with the previous year.

The tropical island is aiming to attract 2.5 million arrivals by 2016, buoyed by fast increasing arrivals from China.

Sri Lanka's economy is expected to grow by 7.8 percent in 2014, according to the Central Bank.

‘A strong national budget will bring macro economic security’

Daily News - 20/08/2014

The following is the continuation of Treasure Secretary Dr. J. B. Jayasundera's address to the Defence Seminar.

This scale of economic growth depends on the level of investments, productivity, improvements in the policy environment and the institutional setup to do business efficiently, application of research, technology and innovation, macro economic stability, national security and law and order. It is a much more challenging task than the previous two five – year phases, similar to an airplane that takes off on a long-haul flight, where the year 2020 will only be a stop-over destination.

This long journey needs to be supported through a strong National Budget which will bring macro economic security. It will be possible when the Budget continues to channel an increased volume of resources in support of core public investments in physical infrastructure, with parallel private investments shifting towards 30 percent of GDP from the current level of 24 percent of GDP. Equally, the Budget needs to divert a large volume of funds for the development of human resources and research and technology in excess of 6 percent of GDP, towards creating a productive and demand driven human resource base. Complementing the trust of the social responsibility of the Government, public spending on social security needs to be protected with special emphasis on the elderly and vulnerable groups. Channeling enhanced public expenditure to rural centric development initiatives and agriculture, fisheries and livestock is the core of the all inclusive development strategy of ‘Mahinda Chintana:Vision for a new Sri Lanka’ to further strengthen food security. All these are viable only if the nation is capable of providing resources for national security, which is a primary responsibility of the Government. Our challenge in the years ahead while moving ahead in this journey towards success, is to engineer the national Budget in line with these considerations.

I would argue that these multifaceted considerations along with public investments in infrastructure done by the Government and state enterprises at a stable level of 6.9 percent of GDP, have helped to sustain increased private investments – including FDIs from 176 percent of GDP in 2009 to 24 percent of GDP in 2014, with considerable efficiency improvements as well. Te challenge here is to raise private investments to 30 percent by 2020, focusing areas in which Sri Lanka has an edge while raising public investments to 8 percent – and bring total investments to near 0 percent along with continued efficiency improvements by improving ‘Ease of Doing Business’, and through technology, research, skills and manpower resource development.

Benchmarking success stories in development is important as much as making investment for growth, to keep pushing the growth momentum. Sri Lankan tea, which remained a primary export commodity for many years with a less than IUS$ 600 million export income has gained momentum in recent years and is gaining grounds through many homegrown brands and an expanded domestic value chain, having entered high-end markets covering advanced and emerging economies, international hotel chains and airlines, capable of surpassing USD 2.5 billion export earnings. This journey to achieve higher export earnings backed by a strong plantation economy and to retain its global recognition is being supported through recent Budget initiatives. Apparel is another great success story that has concentrated on international branded clothing manufacturing, while maintaining high quality, being sensitive to timely delivery, adopting best business practices, ethics and respect for decent labour practic3es in good working environments and above all having looked at emerging markets such as China, Brazil, Japan and Russia.

Government supported IT/BPO business

Like our success stories of the apparel and tea industries, the Government also pushed certain other areas to take a further lead in terms of country’s growth strategy. The Government supported IT/BPO business, which was around US$ 200 million in 2007, and is moving towards surpassing over US$ 1 billion export earnings and creating around 100,000 well paid employment opportunities by 2015 in the newly created policy and infrastructure environment supported by emerging skills in the labour force. This industry now projects US$ 5 billion net export earnings by 2022. Along with the skills development drive, the remittance income from Sri Lankans employed overseas is expected to cross the benchmark figure of US$ 10 billion by 2016.

Free trade agreements with India and Pakistan

In 2013, the Government created a legal framework to develop free ports and bonding facilities to build a Logistic Services Economy. New investments realized in logistic services, prospects of relocation of global business headquarters and generation of new activities having combined many inputs mobilized to free port areas have paved way for Sri Lanka to capitalize on its strategic location supported by newly built infrastructure at Magam Ruhunupura and greater Colombo city. The logistic industry and provision of services have just begun to attract Sri Lanka as a destination in which Headquarters of economic operations could be set up. New aspirations of a Marine Economy is emerging with prospects created having rationalized charges imposed on importers and exporters, the creation of the Shipping Corporation, the proposed setting up of a Marine Industry Regulatory Authority, coupled with the low tax regime for professionals.

Manufacture of electrical products, machinery and spare parts has also gained momentum. Energy sector related activities that are expanding, include the manufacture of high quality electrical equipment, electrical wires and cables. Shipbuilding and boat manufacturing have set the tone on the potential of high-tech industrial development. Local enterprises have entered the manufacture of multiday fishery boats, agricultural machinery such as combined harvesters etc.

The jewellery industry has also recorded a notable expansion in exports as well as in domestic trade. Manufacture of construction material, ceramics, tiles and sanitary wear, office and household furniture, home décor etc., provide new scales of investment opportunities to meet middle income aspirations. In promoting trade towards a greater volume of exports and import substitution, the trade and tariff strategy has been suitably directed in recent years. Free Trade Agreements with India and Pakistan as well as the proposed Free Trade Agreement with China to be launched shortly, are being approached to secure a greater volume of trade with these large emerging markets. Our Government shares the view of the newly elected Prime Minister of India – Narendra Modi, who said ‘sell anywhere, but manufacture locally.

Tourism industry booming

Tourism is becoming a lead industry, both in terms of foreign and local tourism and it is expected to record a turnover of US$ 2 billion by way of foreign earnings in 2014, which is expected to be US$ 5 billion by 2020. This has opened by array of opportunities, benefitting those engaged in extending home stays and boutique type hotel facilities, indigenous medical treatment combined with country’s matured western health system, hair and beauty care services, high quality herbal hair and body care product development, gift and souvenir manufacturing, furniture manufacturing, transportation and local agriculture and as also pushed the expansion of the construction industry. These are some of the visible changes in the emerging economic structure of Sri Lanka and these new activities should create the next wave of growth. Almost all of them are in the hands of the corporate private sector and SMEs. Tea, rubber, spices, herbs, fruits, vegetable, poultry and apparel products and even high quality bottled water have entered a longer value chain process from simple labour usage to skills, technology and quality while becoming brand driven businesses to be able to secure high prices and attract up-end emerging markets.

Supporting these emerging scenarios, while consolidating the new tax policy and fiscal policy strategies, a revenue administration management system and an integrated treasury management system are being lined up to be fully operationalised by 2015.

Concerted efforts are being made to simplify overlapping regulations, taxes and levies that have crept into the system due to the building up of layers of operational institutions, to reduce transaction costs and make doing business easier, particularly to SMEs. The automation of Sri Lanka Customs’ import export documentation process, is being operationalized. Work is in progress to provide 24x7 Centralized Cargo Processing facilities for cargo exports, to further facilitate exports.

In the process of advancing towards an upper middle income per capita, the Government has recognized the importance of legal and financial sector reforms as announced in the 2014 Budget. In the legal sphere – reducing laws delays, setting up dedicated courts to handle commercial disputes to ensure the early dispensation of such cases, could be heightened as dire needs. It is encouraging to note that introducing of technology to Court Houses, promoting Court assisted mediation and revision of Superior Court rules are in progress to reduce delays, among other reform initiatives that are being implemented.

Financial sector must be repositioned

The financial sector should be repositioned to meet the needs of an emerging economy, crossing its traditional boundaries through new and diverse economic activities, while also gaining ground in the region.

The operation of a large number of small financial institutions with a low capital base is a constraint to satisfy regulatory standards, particularly, in the backdrop of financial instruments getting diversified. It is in this background that the 2014 Budget proposed a medium term consolidation process to strengthen financial institutions, which is in progress. IT is a priority area in policy and institutional development. Here again, an inclusive policy strategy is being implemented in recent times bringing IT into both education and work places. These are steps taken to strengthen best practices in our governance structure.

Ladies and Gentlemen, let me stress that in the process towards graduating as a high middle income economy, the remaining facets of poverty will have to be addressed, while taking safeguards to protect vulnerable groups, uplift livelihood avenues and provide gainful employment opportunities to low income households, while also conserving Sri Lanka's bio diversity and the environment. Achieving a high income economy will make sense only if it moves parallel to addressing problems encountered in distant areas still vulnerable to adverse weather conditions such as droughts.

Incentive structures and institutional setups should be geared towards promoting advanced water management technologies and drought resistant cultivation practices among farmers to address climate related risks, including having in place stand-by funding support to mitigate extreme risks.

Considering the importance of the rural agrarian economy, the SMEs and food security and environment priorities, the continuity of the present rural centric approach towards development is likely to provide greater prospects to become a high per capita nation that is free from poverty, with an acceptable level of equity with regard to household and regional income distribution. In this process, given the high standards that are already achieved, it is equally important to target zero maternal and child mortality, while also addressing emerging challenges of non-communicable diseases among the population to improve quality of life, productivity of the workforce and maintain a healthy population whose life expectancy on average would be 80 to 85 years during the next 10 years. Hence, surpassing a higher per capita growth process has been made inclusive.

This brings together the synergy of the underlying five hubs namely, shipping, aviation, energy, trade and commerce and tourism, forming the foundation to drive the economy as a strategic global destination.

You would see that it is structurally different from the legacy up to 2005 that I explained.

It need to be doubled through a well-integrated effort by the tri service, the civil service and the private sector, while working on this common national vision.

Country to reach US$ 7,500 per capita

Country has strong prospects of reaching US$ 7,500 per capita by 2020

In Sri Lanka, the post 2005 development journey and the post conflict take - off are both vision driven, by the extraordinary leadership of President Mahinda Rajapaksa who helped the country to reach calm waters having sailed in rough seas, while placing the economy on an inclusive development strategy.

The country now has strong prospects of reaching US$ 7,500 per capita by 2020 and entering a transitional phase to become an advanced economy by 2035.

Succeeding this challenging transformation demands further strengthening of the ongoing rural centric development strategies to facilitate livelihood development and food security, a social security system for the vulnerable, a preserved natural environment with bio diversity, infrastructure development, uncompromising national security and peace, law and order and maintaining continuity from a policy perspective and to boost business confidence to advance the country steadily.

Hence, we need to place trust in the nation building strategy of the Mahinda Chinthana: National Vision, to make 20/35 development goals, a reality.

Sri Lanka an emerging nation

Sri Lanka as an emerging nation, which is increasingly integrating with the global economy, needs to be attentive to developments that are taking place around the world. Advanced G7 nations as shown in the recent Economist magazine, are performing below the potential growth in their countries owing to productivity lags, ageing population as well as ageing infrastructure. All these nations are heavily indebted and run high fiscal deficits, requiring difficult reforms with strong political commitments. The recent financial crises along with the slowdown witnessed by these economies, have raised many structural problems connected with labour markets and immigration policies.

Newly emerged BRICS nations too have slowed down and are faced with constraints to sustained high growth rates similar to those of past 20-30 years due to compressed demands from advanced economies as well as strong exchange rates, high labour and material costs, environmental issues and social safeguard concerns.

Initiatives are underway to form a new multilateral bank of BRICS nations, a bank of SARRC nations and an Asian Infrastructure Investment Bank led by China, to address capital needs of emerging and developing countries and also to address repeatedly, unheard concerns over the years of developing countries, by existing multilateral financial institutions, such as the World Bank and IMF.

The use of trade sanctions has undermined the thrust of global trade and investment arrangements under WTO. Similarly, the stand taken by the newly elected Government of India recently to oppose WTO led trade reforms in respect of agriculture in the interest of food security, reflects the Voice of Asia on this matter.

The lead taken by the Asia Pacific region in the global economy, signals of a new economic order. The operation of NGOs in non-regulated environments, had become a threat to financial management, inclusive development and law and order itself.

Widespread terrorism has threatened shipping, aviation and financial transactions that risk trade, tourism and investment. Computer crimes, drug trafficking and smuggling are also risks associated with the global economy.

Adjusting to be able to manage these risks and to de-risk economy suitably, are also challenges that we need to be mindful of, without being complaisant with the many good achievements made so far.

Lanka export acceleration push begins

Daily FT - 20/08/2014

• Be passionate about your exports!: ITC Geneva
• Leverage Lanka’s global brand ranking for exports: Rishad
• Strategy making for 2015-2020 acceleration begins
• EDB in WTO benchmark: Rishad
• Happy about ITC support: EDB’s Egodage

Exports, the lifeline of Sri Lankan economy, are a national priority. The urgency of the exports accelerating strategy is such that it could kick-start even before its full design cycle is over. Meanwhile, brand Sri Lanka packs hidden potentials that could be leveraged for national export growth.

“At the end of the day the buck lands at somebody’s desk. Who is ultimately responsible? We can start implementing the export acceleration strategy while it is being designed and before it’s totally finalised. We may not need to wait until it is fully endorsed,” said ITC Chief of Export Strategy Anton Said on 13 August in Colombo, addressing the launch of the EDB’s National Export Strategising Initiative.

The Export Development Board (EDB), the national trade promotion organisation specially vested with the responsibility for promotion and development of exports, is embarking on formulating the 2015-2020 National Export Strategy (NES) to achieve the $ 20 b export target by 2020 as set out in the ‘Mahinda Chinthana’.

The formulation of the 2015-2020 NES is being carried out with technical assistance from International Trade Centre (ITC) Geneva and in consultation with the public and private sector stakeholders. NES formulation is also a statutory requirement under the Export Development Act No. 40 of 1979.
Geneva’s ITC is a subsidiary of the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD), providing trade-related specialised technical assistance to exports of various economies, especially transition economies. ITC is no stranger to Sri Lanka; in 2010, ITC implemented a business survey in Sri Lanka in collaboration with Lanka Market Research Bureau Ltd. (LMRB).

Also taking part in the National Export Strategy formulation session at EDB were representatives from the export community, various chambers, EDB officials and top Government officials from many line agencies connected to exports.

Addressing the session, Minister of Industry and Commerce Rishad Bathiudeen said the export strategy effort is being carried out with valuable technical assistance from ITC and in consultation with the public and private sector stakeholders.

“As global markets are increasingly separating to groups of mature markets and emerging markets as well as consumer markets become more demanding, we need to change our export strategies as well. In fact I have been given to understand that in International Trade Centre’s global assessment on Trade Promotional Organisations, the ITC recently indicated our EDB is on par with some of the export agencies of highly-developed economies. ITC revealed that EDB is now an ITC benchmark for the first time. This is encouraging news in our efforts to achieve $ 20 b exports by 2020 under the committed vision of President Mahinda Rajapaksa. Thanks to our committed exporters and the vision of the President, today we are able to see a five-year high in first half exports for 2014 at $ 5.4 b. This is a huge increase of 45.9% from 2010’s first half exports of $ 3.7 b.”

Bathiudeen asserted there is no doubt that both ‘country branding’ and ‘export strategy’ always go hand in hand. “To this end also there is good news for Sri Lanka exports.  It is that Sri Lanka in its first effort entered at 67th rank in the Country Brand Index of Future Brands. Out of 118 countries surveyed Sri Lanka emerged at 67. Immediately above us is China at rank 66 while Vietnam ranked below us at 69 and Poland at 75. Despite the export successes of these countries, Sri Lanka still has a stronger ranking. What this shows is Sri Lanka’s hidden market potential and it is time we leverage it for our export development.  For us to leverage these international developments to our export growth, we need to take viable steps. What should be stressed is that today’s strategy effort enables our exports sector to draw in private and public sector partnerships. This is fundamental in our approach to national export strategy development, implementation and also the achievement of $ 20 b by 2020. Today’s National Export Strategy session is an important step in accelerating exports, and not just a mere fulfilment of the requirements stipulated in the Export Development Act No. 40 of 1979.”

ITC Chief of Export Strategy Said, addressing the session, said: “In 10 years the world has changed. Export acceleration strategy is the process and the realism needs to be apparent in the final product. ITC’s mission is to enable developing economies and transition economies’ export success in the global economy. In the last 12 years we have developed over 50 strategies in 40 countries, and therefore we have lots of experiences in this business. A national export document can provide a direction and a blueprint which if followed can lead to success.”

ITC’s approach to national strategy design and implementation is based on two fundamental objectives – to enhance international competiveness of enterprises and export orientation. Asserting that export enterprises do not exist in a vacuum, Said noted that export competitiveness is defined as cross cutting issues and constraints affecting multiple sectors – for example, quality.

“The growth momentum needs to be acceptable to all players winning their confidence, including development partners. All institutions and ministries that define export success are part of this initiative. Prioritisation is an important challenge. We need to ensure that the established systems, structures, mechanisms of the country are effective; they need to be functional at policy level as well as operational level so that export momentum is sustained and accelerated. This initiative has to work through existing organisations and many Lankan initiatives such as hub strategy and ‘Unstoppable Sri Lanka,’ etc. Therefore our point of departure is using existing national strategies and to build on them.”

“At the end of the day the buck lands at somebody’s desk. Who is ultimately responsible? We can start implementing the export acceleration strategy while it is being designed and before it’s totally finalised. We may not need to wait until it is fully endorsed,” said ITC Chief of Export Strategy Anton Said on 13 August in Colombo, addressing the launch of the EDB’s National Export Strategising Initiative.

The ITC Chief of Export Strategy emphasised that the success of exports depends on the aggregate institutional network: “We may not need to wait until the export acceleration strategy is fully endorsed since we may know what the targets are, parties are and priorities are. After this we can move on to a detailed design. At that stage the principle sectors identified by the strategy will have their own detailed sub strategies in relevant areas such as trade financing, branding, quality management, trade promotion, packaging, etc.

 The Consolidated National Export Strategy document will have an implementation management framework with measurements to track progress. ITC will partner in this acceleration effort, help you to make the transition, and we are available as much you need us. This is both a top down and bottom up approach. We want you to be passionate about your export strategy. Having a strategy is a huge milestone but not the end.”
EDB Chairman and CEO Bandula Egodage addressing the event said: “Our exports are growing rapidly thanks to you, our exporters. Export revenues are at 20% of our GDP and we are confident that we can achieve the $ 20 b goal by 2020. This is due to the clear framework of the ‘Mahinda Chinthana,’ the visionary leadership of President Mahinda Rajapaksa, the strategic economic controls of P.B. Jayasundera, the well-supported economic development of Economic Development Minister Basil Rajapaksa and the committed leadership and guidance of Minister of Industry and Commerce Rishad Bathiudeen, Deputy Minister of Industry and Commerce Lakshman Wasantha Perera and our Ministry Secretary Anura Siriwardene. The reason we need an export strategy is that with limited resources, we may have to prioritise to further develop and accelerate it. Also it’s a statutory requirement and we need to have a microscopic view. We are fortunate to have ITC supporting us.”

First hand Syrian account reveals Lanka a destination beyond Gulf

Asian Tribune - 18/08/2014

Rishad Bathiudeen (Minister of Industry and Commerce–left) discusses with Dr Mhd. Moussallam Al Droubi (CEO of Al Droubi Group and the Hon Consul of Sri Lanka in Damascus, Syria) in Colombo on 13 August.

For the first time, Syrian investors' view on trading and investing in Sri Lanka has been revealed in a first-hand account on 13 August in Colombo. And the cash rich Syrians want to set up active projects first, rather than sending a stream of hot funds.

“As countries, Gulf economies are richer than Syria but when it comes to individual countries’ private capital volumes, everyone knows that Syrians are way ahead and much more liquid than private capital in Gulf region. The main issue now is that the Syrian industrial community is on the lookout for an investment hub due to the current unrest in Syria. There are a few keen big investors who are studying Sri Lanka closely” said an upbeat Dr Mhd. Moussallam Al Droubi (CEO of Al Droubi Group and the Hon Consul of Sri Lanka in Damascus, Syria) on 13 August in Colombo.

Al Droubi CEO Dr Mhd. Moussallam was speaking to Rishad Bathiudeen (Minister of Industry and Commerce) on 13 August at the Ministry of Industry and Commerce, Colombo 3. Al Droubi CEO Dr Mhd. Moussallam was making a courtesy call on Minister Bathiudeen on the afternoon of 13 August.

“Once Syria recovers from the current problems, our bilateral cooperation could be resumed in better shape. The main issue now is that the Syrian industrial community is on the lookout for an investment hub due to the current unrest in Syria. I am looking forward to bring a Syrian business and investment delegation to Sri Lanka in the coming months to explore investment opportunities in Sri Lanka” said Al Droubi CEO Dr Mhd. Moussallam.

He added: “Sri Lanka’s wonderful investment environment is an invitation to them. Most of large scale Syrian industrialists and investors are not necessarily and specially looking at Sri Lanka but they are looking at Asia as a whole. But there are a few keen big investors who are studying Sri Lanka closely. They are some diversified conglomerates including my Al Droubi group as well as investors in such sectors as tourism / hoteliers, chemicals, multi cycle power projects, cables and textiles. My Aldroubi Group itself in turn is representing such multinationals as Saudi Cable, South Korean conglomerate Hyosung Corp, India’s Jindal, the Greece metal firm METKA, China’s global power transmission giant Zhejian HOLLEY, and also Italy’s Gruppo Aturia. We, the Al Groubi, have the biggest cable factory in Syria and other international projects in UK, China, Greece and Korea. About 70% of high end Syrian industries have shifted their investments out of Syria due to the current conflict-though small businesses and sectors still continue there. These shifting industrialists and investors are not mere safe haven seekers busily fleeing Damascus and Aleppo-in fact they are high end investors with critical knowhow in their heavy industry sectors that will benefit the Sri Lankan Industry base! “

Al Droubi CEO Dr Mhd. Moussallam also said, “What many do not know is that Syrian investors have more cash and funds than Gulf region investors. As countries, Gulf economies are richer than Syria but when it comes to individual countries’ private capital volumes, everyone knows that Syrians are way ahead and much more liquid than private capital in Gulf Region (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates). But remember-when investing overseas, Syrian private capital’s priority is to bring the manufacturing project setup and knowhow rather than immediate cash at first. In fact, Syrian investors already have checked out the Gulf countries and even Egypt. They rarely venture out of Gulf region. This is the first time that they are looking at outside the region, and at Sri Lanka specifically. In Lebanese banks alone funds of Syrian business origin to the tune of $14 Bn are ready and waiting at this moment to flow to the correct investment opportunity in any international market-including Sri Lanka. Many high rise buildings in Lebanon’s Beirut Central District are occupied and rented by none-other than Syrian businesses. A building construction boom in Lebanese real estate sector is partly fuelled by Syrian investments. These funds may not be directly injected here immediately but would come as BOO (Build Own Operate) projects. Since they come as total BOOs, the specialized infrastructure would be totally shipped in and that free flow of specialized knowhow is Sri Lanka’s key gain. "

"The money would follow after this initial infrastructure transfer as and when needed. Syrian businesses and investors are successful professional investors with a track record and they have long standing investments spanning Gulf, even Egypt and Morocco. For centuries Syrians have been known to be good traders, and creative industrialists. For example 55 pharmaceutical factories in Syria are exporting to 85 countries- among them are demanding markets such as Saudi Arabia. Pharma is not an easy industry and not easy to export-its very complicated specially in quality.”

He further added, “ But Syrian pharma is very active and thriving facing all these challenges! And our textile industry is historically reputed with parts of British Queen’s and Princess Diana’s wardrobe material always originating from Syria. Due to the on-going war, the Syrians are looking for new destinations to continue to produce these renowned Syrian brands elsewhere and this is a good opportunity for Sri Lanka to be a part of the supply chain of such historic Syrian industries and draw in their investments. If suitable projects are found for them here and they are satisfied of the incentives, then they would be entering. My goal is to bring many successful Syrian global investors-not only my Group. If Syrian investments are coming here, then you could expect the bulk originating from Lebanon as I just said-these are clean investor monies with clear and direct legal sources of origin. More importantly, if my Al Droubi or any Syrian investors come here it will be the first time that Syrian investors would positively go beyond the Gulf region! But you need to show good reason as to why they should be entering here in addition to 100% investment ownership and total profit repatriation benefits offered by Sri Lanka. The Damascus investors looking at Sri Lanka told me that they need to be clearly informed as to what they will specifically be entitled to if they invest here.”

Minister Bathiudeen said: “Our government and all people of Sri Lanka too wish that the issues in Syria would be peacefully resolved. We welcome Syrian investors to Sri Lanka and thanks to HE the President Mahinda Rajapaksa’s committed vision we expect a GDP growth of 7.8% which is positively taken by global investors. And global investors can avail themselves of such benefits as not only the freedom of total investment ownership, but even profit repatriation and constitutional protection for their investments. Syrian BOO projects can strengthen our industrial base considerably. Our industries would specially welcome transfer of global experience and knowhow to them.”

Discussing bilateral trade cooperation Al Droubi CEO Dr Mhd. Moussallam said: “To quickly restore bilateral trade beyond the current $ 97 Mn, we need to refresh the regular Ceylon Tea import quantities to Syria again. Also promotion of other Lankan value added exports to Syria is an important step in this. Once Syria recovers from the current problems, our trade could resume.” According to the Department of Commerce of Sri Lanka, bilateral trade with Syria stood at $97.23 Mn, of which almost the total was claimed by Lanka’s exports to Syria while imports were only $0.54 Mn. In 2013, Ceylon Tea exports to Syria stood at $ 94 Mn-taking 97% of exports revenue.

Finished rubber goods export up

Sunday Observer - 17/08/2014

In 2013, Sri Lanka's natural rubber sheet exports stood at US $71.6 million, while the export of finished rubber goods stood at US $ 887 million, compared to US $ 856 million in 2012, an increase of 4%, said Industry and Commerce Minister Rishard Bathiudeen at the inauguration of the second edition of Sri Lanka PLAST and the first edition of RUBEXPO at the BMICH last week.

“Our plastic exports stand at US $60.11 million compared to US $ 57 million in 2012, an increase of 5%. We encourage value addition for rubber exports. These two sectors have been identified as thrust industries and are expected to contribute significantly to national economic growth and help meet our planned 7.8% GDP target this year,” he said.“Our company exports rubber products and slippers to India in fairly large quantities.

I ship at least one full container load (FCL) per month to India,” said Managing Director, Samson Group, Kulathunga Rajapaksa, the reputed footwear maker.

“This event is an effort to promote local products, even to India which is a huge market. The cost of transporting goods from Delhi to Chennai is more than the cost of shipping goods from Colombo to Chennai, giving Lankan exporters an advantage,” he said.

“There are also some non-tariff barriers at that end and a fair amount has been ironed out helping Lankan exporters. There is room for further improvement. Our exporters need to vigorously go for the Indian market just as Indian exporters do here,” Rajapaksa said.

In 2013, India was ranked 10th among importers of Lankan finished rubber goods valued at US $ 19 million.“India is the world’s tenth largest economy. When it comes to global trade parities, India’s most balanced trade is with Sri Lanka,” said Indian High Commissioner in Sri Lanka, Y.K. Sinha.

“Both sides are involved in continuing discussions to take economic engagement to the next level,” he said.

Economic Development Minister Basil Rajapaksa, Industry and Commerce Ministry Secretary Anura Siriwardene, Chairman and CEO, Export Development Board (EDB), Bandula Egodage and Director General, EDB, Sujatha Weerakoone were also present.

The three-day exposition, a B2B event, brought over 160 exhibitors from 15 countries including India, Saudi Arabia, Sri Lanka, Singapore, China, Taiwan, Japan, Italy, Philippines and Malaysia, showcases rubber and polymer technology used by participants.

India has the most balanced trade with Sri Lanka: Sinha

Daily FT - 15/08/2014

When it comes to global trade parities of the world’s 10th largest economy, the most balanced trade it conducts is with Sri Lanka, India claimed yesterday.

“India has the most balanced trade with Sri Lanka among its major trade partners. Both sides are involved in continuing discussions to take economic engagement to the next level,” said Indian High Commi-ssioner in Sri Lanka Y.K. Sinha yesterday.

Sinha was addressing the singular inauguration event of two expos on 14 August – the second edition of Sri Lanka Plast and the first edition of RUBEXPO at the BMICH. Also taking part were Minister of Economic Development Basil Rajapaksa, Minister of Industry and Commerce Rishad Bathiudeen, Ministry of Industry and Commerce Secretary Anura Siriwardene, EDB CEO Bandula Egodage and EDB DG Sujatha Weerakoone.

The three day BMICH exposition – a B2B and networking event – brings over 160 exhibitors from 15 countries including India, Saudi Arabia, Sri Lanka, Singapore, China, Taiwan, Japan, Italy, Philippines and Malaysia and showcases rubber and polymer technology used by participants.

The event is supported by the Ministry of Industry and Commerce and the Export Development Board (EDB), along with Industrial Development Board (IDB), Rubber Research Institute of Sri Lanka (RRISL) and India’s Central Institute of Plastics and Engineering Technology.

“The participation of more than 100 companies in this event is a manifestation of the re-emergence and diversification of the Sri Lankan economy,” said Sinha. “India and Sri Lanka enjoy robust economic and commercial relations exemplified by the 14-year Free Trade Agreement. India is not only the largest source of imports for Sri Lanka but also Sri Lanka’s third largest export destination after the USA and the UK.”
Sinha asserted that bilateral investments with Sri Lanka have also witnessed a substantial increase in recent times. “Based on the national synergies and complementarities between both countries, both sides are involved in continuing discussions to take economic engagement to the next level. I am certain that Sri Lanka Plast 2014 will contribute to further consolidation of economic engagement between India and Sri Lanka,” he added.

According to the Department of Sri Lanka, India was the biggest supplier to Sri Lanka in 2013, followed by China. Imports from India to Sri Lanka was at $ 3.09 b in 2013 while total Indo-Lanka trade stood at $ 3.636 b. Total trade under ISFTA was reported at $ 748.2 m, rising by a strong 40% in 2013 from 2012’s $ 536 m. In 2013, 65% of Lanka’s total exports to India were exports under ISFTA.

India is a well-known member of BRICS as well as a major economy within the G20 grouping. Indian investment flows to Sri Lanka in 2012 stood at $ 158.20 m. According to the EDB, Sri Lanka’s top three exports to India in 2013 were boats, animal feed and pepper.

Bathiudeen, addressing the event, said: “Plastics and rubbers are two sectors that play a huge role in our everyday lives as well as in our GDP. In 2013, our natural rubber exports stood at $ 71.6 million. Rubber product exports alone in 2013 stood at strong $ 887 million, rising by 4% from 2012’s $ 856 million. Our plastic exports only have stood at $ 60.11 m, increasing by 5% from $ 57 million in 2012. I should stress that we are strongly encouraging value addition for our rubber exports. I should also stress that these two sectors have been rightly identified as thrust industries, which are expected to contribute significantly to national economic growth to meet our planned 7.8% GDP target this year under the vision of President Mahinda Rajapaksa.”

On behalf of the organisers, Enterprising Fairs India Managing Director B. Swaminathan said: “We are happy to bring in the second edition of Sri Lanka Plast and the debut editions of the RUBEXPO and SIMEX. These exhibitions will no doubt create B2B opportunities, enhance collaboration and grant more access to the local export market, enabling a stronger economy aligned with the Sri Lanka 2020 vision.”
There will also be a guidance booth for young and aspiring entrepreneurs who can get direction on how to start a business in the plastics and rubber industry. This expo is set to attract over 20,000 visitors over the three days, according to the organisers.

The Ministry of Industry and Commerce (MOIC), Export Development Board (EDB), Industrial Development Board (IDB), Rubber Research Institute of Sri Lanka (RRISL) and Central Institute of Plastics and Engineering Technology (CIPET), a Government body of India, have also extended their support to these B2B exhibitions.

Lankan rubber and plastic exporters visiting the inauguration event praised the effort.
“Our company is exporting rubber products and slippers to India in fairly large quantities. I ship at least one full container load (FCL) per month to India,” said DSI Samson Group MD Kulathunga Rajapaksa.
The reputed Lankan branded footwear maker who was attending the inauguration added: “This event is a good effort to promote our products, even to India, which is a huge market. The cost of transferring products from Delhi to Chennai is more than cost of shipping from Colombo to Chennai, giving Lankan exporters an advantage. There are also some non-tariff barriers at that end and a fair amount of that has been ironed out, helping us Lankan exporters. We can further improve and there is space for it. Our exporters need to vigorously go for the Indian market just as Indian exporters do here.”

In 2013, India ranked at 10th among importers of Lankan rubber finished products, importing $ 19 m of rubber products from Sri Lanka.

Lanka in first mutual recognition agreement trade call with biggest global supplier

Daily FT - 13/08/2014

• ‘Important development!: Exporters
• 'MRA can help boost FTA biz’: Rishad
• 'Agreed!’: Deputy Indian HC Bagchi
• Trade under ISFTA jumps by 40%!
• Indo-Lanka overall bilateral trade at $ 3.63 b

As bilateral free trade leaped by a huge 40%, Sri Lanka’s biggest supplier in the world nodded in agreement on 7 August that a wider and consistent trade harmonisation push could remove existing barriers in one go -and amplify bilateral business.

“Sri Lankan businesses that invested in India have done very well. I agree with you that a wider Mutual Recognition Agreement will be useful to increase bilateral trade. I also agree that the lack of unified market standards across various states in India could be an issue for Lankan exporters,” said a keen Arindam Bagchi (Deputy High Commissioner of India to Sri Lanka) on 7 August in Colombo.
Deputy High Commissioner Bagchi was addressing Minister of Industry and Commerce of Sri Lanka Rishad Bathiudeen on 7 August during the first courtesy call he made on Minister Bathiudeen. Deputy High Commissioner Bagchi previously served in such stations as Beirut, New York, Spain and was finally functioning as the Director of Indian Prime Minister’s Office (PMO) before he arrived in Colombo. Joining Minister Bathiudeen on 7 August were Department of Commerce of Sri Lanka DG R.D.S. Kumararatne and EDB Chairman/CEO Bandula Egodage.



“India’s new government led by Prime Minister Narendra Modi has a special focus on SAARC region. On that note, let’s build on the long standing special relationship between Sri Lanka and India,” said Deputy High Commissioner Bagchi, and added: “As for India’s export problems, they are more or less similar to Sri Lanka’s – if EU market drops, similar to Sri Lanka exports, we too fall. And so is when it comes to exports market diversification. As for the Indo-Sri Lanka Free Trade Agreement (ISFTA), it helped both countries. I also think we can find alternative ways to expand Indo-Lanka trade in addition to the current ISFTA. In fact, now what is important is to expand ISFTA to other trade aspects. When it comes to Indo Lanka trade, the name of the agreement is not important but what is important is how to expand the benefits to other areas of (trade) cooperation. More importantly, Sri Lankan businesses that invested in India have done very well. In fact, we are very happy of their steady progress.”

According to the Department of Sri Lanka, India is the biggest supplier to Sri Lanka in 2013, followed by China. In 2013, total Indo-Lanka trade stood at $ 3.636 billion with imports from India reporting no less than $ 3.09 billion. Total trade ‘under ISFTA’ stood at $ 748.2 million and it jumped by a strong 40% in 2013 from 2012’s $ 536 million. Also in Y2013, 65% of Lanka’s total exports to India were exports ‘under ISFTA’.

Sri Lankan investment volumes in India too saw an uptick especially after both countries signed the Bilateral Investment Protection Agreement (BIPA) in January 1997 which came into force in February 1998. Among top Lankan investments currently in operation in India are Brandix, MAS Holdings, Damro, Dankotuwa, Carson Cumberbatch, Aitken Spence, John Keels, Colombo Dockyards, DRH Logistics and Freight Links International. Sri Lanka also aims at bringing more Indian investments to widen its exports base and enable integration in to regional supply chains in automobile parts, light engineering and pharmaceuticals.
Indian investments flow to Sri Lanka (in 2012 alone) stood at $ 158.20 million. Such Indian giants as Bharati Airtel (mobile telecom) Britannia (confectionary) Lanka IOC (fuel), TATA (heavy steel), Taj Hotels, Ultratech Cements, Ambuja Cement, CEAT (rubber), Piramal Glass and Ashok Leyland (vehicles) are operating in Sri Lanka and often find significant share of their group annual volumes originating from Sri Lanka.

Responding to Deputy High Commissioner Bagchi, Minister Bathiudeen said: “We extend you a warm welcome to Sri Lanka. It has been a pleasure for me and my Ministry to closely work with the Indian High Commission and relevant Indian Ministries to develop our bilateral trade. It is time for both sides to implement decisions of the Joint Task Force made in Colombo to develop bilateral trade so that mutual benefits are gained. As R.D.S. Kumararatne, my DG of Department of Commerce here informs me that what is now required to speed up Indo-Lanka trade to next levels is a wider and a proper Mutual Recognition Agreement (MRA) on standards. “Lack of such a wider and proper MRA has led to many of Lankan exporters facing issues in India-in that interpretation of trade issues differently at different times, thereby slowing trade progress. For example one day we come across certain accepted measures not acceptable to the other side suddenly. Even if MRA is a long process, if we start it now, one day we will be there! In fact, the biggest barrier we have in terms of process related trade issues is the lack of an MRA. To get the maximum of FTA, we need to develop the confidence of business communities on both sides. A proper MRA, rather than a mere harmonisation agreement, could give us the much needed consistency and resolve current trade issues to a great extent in one go. Therefore I strongly believe it is time to enter to a proper, wider MRA with India.”

Under the ISFTA, Sri Lanka has been able to promote a diverse range of new exports such as furniture, MDF boards, insulated copper wiring sets and cables, bottle coolers, cocoa products, polished marbles, apparel, glass bottles, rubber gloves, copper wires, new pneumatic rubber tyres, machinery & electrical equipment parts, processed meat products, ceramic tableware & tiles, food preparations, spices, strawberries, and even cosmetics. Reportedly, current harmonisation agreement between India and Sri Lanka focuses only on narrow harmonisation.  A fresh, proper MRA could open the door for wider engagement and further boost Indo Lanka trade that stood at $ 3.636 billion in 2013.

Deputy High Commissioner Bagchi responding to Minister Bathiudeen said: “I agree with you that wider Mutual Recognition Agreement will be useful to increase bilateral trade. I also agree that the lack of unified market standards across various states in India could be an issue for keen Lankan exporters to India and needs to be looked into. For example the Indian government’s General Sales Tax (GST), an important domestic tax, has issues in its progress due to it needing the concurrence of all the states where it will be implemented.”

Top Lankan exporters and trade researchers praised Minister Bathiudeen’s 7 August initiative.
“This is a very important development and we welcome it,” said Spice Council of Sri Lanka Founder Chairman Sarada de Silva and added: “This is the kind of thing we too are pushing for, which is even important for value added exports. For instance, when we talk of our spice exports, more than 70% of our cloves, pepper and nutmeg are headed to India. As a start therefore, we welcome a mutual MRA between Indian Standard Institute and Sri Lanka’s Standards Institute (SLS) instead of unilateral agreement at present, which could help our exporters greatly.” Verite Research Head of Economic Research Subhashini Abeysinghe said: “In our experience, an MRA which mutually accepts testing, certification and standard compliance report would be of great benefit to Lankan exporters.”

Both Deputy High Commissioner Bagchi and Minister Bathiudeen also discussed of Indian development assistance to Sri Lanka and other forms of bilateral cooperation between both countries on 7 August.