With the long civil war now finally behind Sri Lanka, a trade delegation visited Seoul to make the case lifting trade and investment with the South Asian island nation.
Organized by the Sri Lankan Embassy here, trade officials pitched to a crowd of Korean businessmen reasons why now is the time to invest in Sri Lanka in a forum at the Korean Chamber of Commerce and Industry on Oct. 17.
Sri Lankan Ambassador to Korea Tissa Wijeratne said, ‘Like the old adage, ‘The happiest person is the one meeting friends on the road and entertaining friends at home,’ we should explore open new avenues of friendship between Korea and Sri Lanka.
In that vein, Korea and Sri Lanka recently signed an investment protection agreement. The two nations have also struck an investment promotion and double taxation avoidance agreement.
Shivan De Silva, director of the Sri Lanka Investment Board, said Sri Lanka is open for business, adding that total foreign ownership is permitted and no restrictions on the repatriation of earnings are in effect.
Deputy Minister of External Affair Neomal Perera said people-to-people ties between Korea and Sri Lanka are strong, as some 40,000 Sri Lankans can speak Korean because of their years-long work experience in Korea. Currently, 26,000 Sri Lankans are in Korea, most of them as laborers in factories and professionals at corporate offices.
Amid the trade pitch, Sri Lanka is on the path toward rapid recovery with 8 percent growth in 2010, a per capita income that has nearly doubled to $2,300 since 2005 and with inflation under control at 5 percent in 2010.
De Silva described the gambit of trade and investment opportunities now open to Korean businesses, including investment in the manufacture of rubber-based products, infrastructure projects like airport, port and highway construction, housing construction, auto parts manufacturing, mining for precious gems, investment in natural gas and oil exploration, and, of course, investment in tea and spices for which Ceylon Tea is the most well known.
De Silva said factor costs favor Sri Lanka in comparison with its South and Southeast Asian competitors. Sri Lankan shop floor workers make $100 month, as compared to $380 for their Chinese and $200 for their Indian counterparts.
But cheap labor is not the only incentive for businesses in Korea to seek investment opportunities abroad. Ease of doing business and South Asian regional market access are also factors in the investment calculus. Sri Lanka has an FTA with Pakistan and India, so Sri Lankan-based Korean manufacturers will enjoy 100 percent duty free access into both India and Pakistan.
Korea-Sri Lanka trade volume is currently about $300 million annually.
‘The current trade volume doesn’t reflect the full potential of bilateral commercial ties between Sri Lanka and Korea,’ Wijeratne said.
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