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Getting To Know The Sri Lankan Trader

Getting To Know The Sri Lankan Trader
August 13
15:31 2014

As Seychelles and Sri Lanka, two cozy island neighbors put heads together to discuss trade cooperation for mutual benefit, it would be interesting to research their relative merits as business partners. Study of the past political and historical, not forgetting religious and colonial, beginnings would enable a definitive understanding of mutual concerns. The winds blow hard across the oceans as they have done for thousands of years. What stories do the winds and the waves tell?

Did you know about the once upon a time Silk Route between China and Europe during which epic voyage the ships halted at Sri Lanka? Have you heard about the large number of shipwrecks found around the Sri Lankan coast that point to flourishing early trade?

The crucial date was May 19, 2009 when the 26 year civil war that shattered life in Sri Lanka came to a merciful end and things started looking up once again. Gone were the days when you lived in fear of the terrorist. Travel and tourism were curtailed and the media told horrific tales, at least whatever news was not censored. According to expert predictions, within 5 years after that crucial date the country was expected to reach a per capita income of USD 5000. That would make it similar to Malaysia and Sri Lanka would reach the status of a high end middle level income country. Have the dreams been realized after war almost undid every hope and dream?

Sri Lanka is agrarian too and agriculture accounts for 20% of GDP. Imported food is not subsidized in order to protect the local market. Road infrastructure construction came about through long term funds from World Bank, ADB, India, China etc.

Amidst the violence and the controversy on the international arena, one often tends to forget that Sri Lanka is a little island of 20 million people and can hardly be discussed alongside giants India and China, some of its closest neighbors. In spite of the advantages of being small and cute, little nations lack the economic might and military strength that the giants are capable of. Much of the world politics today is dependent upon saber rattling to intimidate would be foes whether on the battlefield or in multinational businesses. The war machinery business springs to mind where untold billions are spent on the killing fields.

What is the present scenario of Sri Lankan trade?

Sri Lanka obtained membership of several trade agreements in the region like General Agreement on Tariffs and Trade (GATT), South Asian Free Trade Area (SAFTA) and is a founding member of World Trade Organization (WTO).

India is a major trading partner after the two countries signed a free trade agreement. In 2006, the volume of trade had reached USD 2.6 billion.

Australia and Sri Lanka are major trading partners too and the trade between the two countries in 2008-09 reached $329 million.

The year 2009 witnessed exports of $7 billion. The estimated exports in 2011 amounted to $10.89 billion. The most important export partners were USA, UK, India, Belgium and Germany.

The record for imports stood at $14 billion in 2008 earlier but the import estimate for 2011 stands at around $20 billion. The chief import partners were India, China and Singapore.

Sri Lanka’s FDI balance in 2011 stood at USD 1 billion. Gross External Debt amounted to $19.45 billion according to the December 2009 estimate.

sri lankan

What items does Sri Lanka export?

Textiles and apparel form a bulk of exports especially to the affluent western countries because of the lower cost of labor here, somewhat similar to Bangladesh garment production.

Fish exports make up a large volume of trade. Tea and Spices figure high on the export list. Coconut and coconut products like oil find favor with many countries besides rubber products. Diamonds, emeralds and rubies belong to the much wanted list too.

Among the imports list are machinery and transport equipment, textile fabrics and mineral products, petroleum and foodstuffs. In 2009, Sri Lankan import partners were India, China, Iran, Singapore and South Korea.

The European Union has been a major trading partner and 36% of Sri Lanka’s exports, mainly clothing, is exported there. Jewelry, rubber based products and agricultural goods also form part of the exports.

As for the present, the Sri Lankan vibrant economy resounds with starry hotels for tourists, alternative energy projects, real estate projects and agricultural produce besides the manufacturing sector.

The impact of Buddhism upon the fabric of Sri Lanka has been immense with the peace mission strangely enough affected by several insurrections and the horrific civil war that lasted more than a quarter century. The country claims to have a history going back many thousands of years while Seychelles was discovered by the Arabs not too many centuries ago. Dissimilar countries, religions and traditions make up the world view that is only necessary to keep the wheel of life dramatically moving all the time. Time never stops and never will perhaps.

A strong and dedicated political leadership is a tremendous plus point to trading partners and FDI. The decision to allow foreign universities to set up local campuses in Sri Lanka also confirms that international investors have the confidence in the national leadership and political system. The strangest trade is in knowledge which is what the ten foreign universities would achieve through the campuses that would award degrees from the parent universities abroad with similar syllabuses and examinations.

India and Sri Lanka were born similarly when independence came in the 1940s from Britain. The two countries enjoy strong political friendships. In spite of India overshadowing the tiny Sri Lanka in terms of size and population, there has always existed a mutually amicable understanding regarding sensitive matters. China and India, both mighty neighbors and partners of Sri Lanka in trade, have been growing tremendously at 10% for the last 20 years. China has since transformed into the world’s third largest economy. BRIC (Brazil, Russia, India and China) has assumed international significance. Sri Lanka has made a mark in the South Asian region and perhaps looks up to Malaysia, Singapore and Hong Kong with envy. They are small countries but remarkably stable and getting rich. There exist significant strong reasons to hope in the dynamic future of Sri Lanka.

Getting To Know The Sri Lankan Trader - overview
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Articles on the Jadenforex blog written by "Jadenforex" include guest posts, and items written in collaboration with several authors.

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