In commemoration of Independence Day of Sri Lanka and 45th anniversary of Korea-Sri Lanka diplomatic ties, the "Seoul City" magazine interviewed Ms. Nilanthi Pelawaththage Charge d' Affairs, Sri Lanka for the prospects of bilateral trade and investment expansion as follows.
Q. Please introduce the significance of your Independence Day, February 4th for our readers.
Sri Lanka marks the 74 years of independence on 4th February 2022. On 4th February 1948, Sri Lanka gained the internal political independence from the British rule. Since the independence, even in the midst ofnumber of challenges, the system of representative democracy based on universal suffrage has survived in the country as a nation with pride, in line with the freedom, sovereignty and territorial integrity of the country whilst strengthening the economic and political rights of all the citizens.
Sri Lanka is a multi-ethnic, multi-religious and multi-cultural country with a rich, cosmopolitan heritage where different communities have peacefully co-existed over centuries. There is no civil unrest in the country. Sri Lanka has a long democratic tradition with strong institutions, and a vibrant civil society. Freedom of association and assembly are safeguarded with peaceful demonstrations occurring in Sri Lanka as in any other country where liberal democratic norms and traditions prevail.
As a result of free education and the health care system that Sri Lankans enjoy in the country since the independence, Sri Lanka indicates higher health and literacy indices compared to the countries in the region. The national day which is a public holiday in Sri Lanka is celebrated by the all Sri Lankans who are in Sri Lanka and around the world by hoisting the national flag in addition to dances, performances and parades.
Sri Lanka celebrates the 74th year of independence with a great hope of recovering from the current COVID-19 pandemic and move forward with theNational Policy Framework, of “Vistas of Prosperity and Splendourto achieve the target of doubling the current GDP of Sri Lanka during this decade.
Sri Lanka has successfully overcome the immediate challenges posed by the COVID-19 pandemic, and is now in a state of normalcy with all public service, corporate and business, and education activities functioning normally without interruption, in accordance with COVID-19 health and safety guidelines. The nationwide inoculation programme has been commended by the World Health Organization (WHO) and almost 90% of the eligible population has received both doses of the COVID-19 vaccine. A campaign has been launched to provide the booster dose to the population above 20 years of age. It is important to note that even though Sri Lanka's economy has been affected by the COVID-19 pandemic, the country is making every endeavor to reinvigorate its economy this year, through the implementation of prudent recovery policies.
Q. Please explain investment environment of Sri Lanka for Korean potential investors and any special favors to foreign investors.
Sri Lanka’s investment climate has undergone tremendous improvements in the recent past. Sri Lanka is looking forward to unleash a decade of growth, focusing on transformation into a global business hub, through a number of targeted industry sectors. As outlined in the National Policy Framework of “Vistas of Prosperity and Splendour, the foundation to double the GDP during this decade is being laid, taking advantage of strong fundamentals and growth opportunities.
Sri Lanka was rranked as no.1 in South Asia for Human Capital Skills, with the global recognition for its highly trainable & flexible workforce. Positioned as 2nd in the region for starting a business (Doing Business Index 2020), the country is the best in South Asia for Quality of Life (Quality of Life Index - 2019). Sri Lanka which is strategically located in the Indian oceanis the epicenter for transshipment in the region with easy access to a USD 1.56 billion market value with its FTAs with India and Pakistan. These strong economic and social fundamentals will be critical factors in creating a compelling investment climate in Sri Lanka.
Sri Lanka has devised economic policies conducive to foreign investors with concessionary tax rates, tax holidays, duty free benefits, etc. FDI in Sri Lanka has largely been concentrated in tourism, real estate, mixed development projects, ports, and telecommunications in recent years. Sri Lanka has ambitious growth plans with a particular focus on the Pharmaceutical, Textile, Electronics, Rubber and Auto parts sectors. Sri Lanka also offers a suite of services and concessions available for investors considering upcoming economic zones, exclusively designed for pharmaceutical manufacturing in the Southern part of the country and fabric and textile manufacturing in the North-East part of the country. In addition, there are opportunities to invest in a number of projects in the renewable energy sector, which include investments in wind and solar power plants. The Board of Investment is the primary governing body which is overlooking the FDI in Sri Lanka. The Republic of Korea is one of priority countries within the FDI targeting strategy of the Board of Investment (BOI)of Sri Lanka.
Q. What would be the most attractive industrial sectors for Korean companies to invest in Sri Lanka?
The pharmaceutical sector is one of the most attractive sectors to invest in Sri Lanka with the experience of a significant growth over the last 5years, in terms of export performance. The current domestic market is over USD600 million, which is expected to reach a value of USD 750 millionover the next two years. The local manufacturers only cater to 15% of this demand. As such, the Government of Sri Lanka is introducing a 400-acrepharmaceutical zone in Hambanthota with attractive incentives for the foreign investors including the investors from the Republic of Korea.
The next industrial sector is the electronic and electrical sector that the RoK has made a name for it. A range of products varying from complex high precision sensors to basic components such as switches and panel boards, with other sub sectors in between are being manufactured in Sri Lanka, currently.However, there are lot of space and opportunities for Korean investments in this sector in Sri Lanka with the high-level experience and expertise in the field.
Moreover, the apparel industry is one of Sri Lanka’s primary manufacturing industries. The industry has evolved to reach international heights as an ethically responsible, sustainable, ‘Guilt free’ apparel sourcing destination for international fashion brands during the four decades journey of the industry. Speaking of the new additions, Smart apparel and Protective apparel is an area where there are new and emerging opportunities for Korean investors to capitalize in.
With the strategic location of Sri Lanka in the Indian Ocean, the country has a number of inbuilt strengths such as access to all subcontinental ports and global connectivity through South Asia’s only deep-water terminal. The cargo handling capacity of Sri Lanka is 8Mn TEU, with the capacity to grow up to 20Mn TEU with a quick turnaround time. Therefore, the logistics sector is one of the potential sectors that Korean companies could consider for their next investment choice of Sri Lanka.
Q. Please introduce some outstanding Korean companies' activities in Sri Lanka.
Currently, there are nearly 50 projects with Korean collaboration, operating under the purview of the Board of Investment of Sri Lanka. The total value of Korean foreign direct investments in Sri Lanka is over USD 66 Million. Out of Total FDI received from the RoK, the highest amount of FDI has been received for the Rubber related Manufacturing Sector followed by Property Development, Wearing apparel, Garment Accessories Manufacturing, construction etc. These enterprises have generated more than 3,700 job opportunities to the Sri Lankans. Number of reputed Korean companies such as Kolon Global, Keangnam, Hyosung, Kunyoung and the E-Land Group are already having successful business operations in Sri Lanka.
Q. Please introduce tourist attractions of Sri Lanka for Korean tourists abroad.
Despite the pandemic, Sri Lanka has received several international accolades in the tourism industry including CNN’s “Where to Travel in 2022”; the Global Wellness Institute; Conde Nast Traveler 2021 Reader's Choice Awards as well as other endorsements received previously in 2019 by Lonely Planet and the National Geographic Travel.
With 12 National Parks and 52 Sanctuaries thataccount for 12% of Sri Lanka’s land area, Sri Lanka istruly a startling multiplicity of physical features andwildlife. Each Park around the country is famous for varioustypes of wildlife. Yala National Park, the second largestin Sri Lanka, is believed to have the world’s highestconcentration of leopards. When you feel like you want to see the majesticelephants, Udawalawe National Park and MinneriyaNational Park are the places to be, with the latterboasting of the famed ‘gathering’ by the water duringthe dry season.
SriLanka is considered as one of the best places for whaleand dolphin watching. Blue whales, sperm whales,killer whales, pilot whales and dolphins, are oftenspotted in Mirissa on the South Coast, Kalpitiya on theNorth West Coast and Trincomalee on the East Coast.The gentleswell of the Indian Ocean providesexcellentopportunities for surfing, diving, jet skiing, sailingand numerous other water sports. Arugam Bay onthe East Coast is a popular surf destination bringingin many pro-surfers from all parts of the world.For the underwater explorer, Sri Lanka isalso proud bearers of wide coral reef and vibrantaquamarine life, for a rewarding glimpse of theother side of life. Diving and snorkeling are mostpopular in many Southern Coastal areas, withPigeon Island in Nilaveli (on the East Coast)offering some of the best aquatic sights to bediscovered.
The most tourist-oriented festival is theKandy Esala Perehera (parade)lasting over 10 daysand climaxing on Esala Poya (late July toearly August). As with the other parades,this too has the full entourage ofentertainment with a majestic tusker carryingthe sacred tooth relic of the Buddha for thepeople to venerate.A traveler can explore the vast greens of the Victoria Golf Course andthe rugged wilderness of Knuckles Mountain Range,both excellent views to take in after being in thebustling city of Kandy. A short trip furtherup-country to the cool climes of the quaint city ofNuwara Eliya and its tea country, is where the tea bushescover every hill and mountain surrounding the villagesof people so humble and polite.
Furthermore, travelers could explore the desolate plateau of Horton Plains and allits inhabitants while indulging in breath-taking viewsof Baker’s Falls and World’s End. Further inland travelers will need to stop by at the famousNine Arch Bridge at Ella which is currently a popular‘insta-worthy’ picture opportunity. Travelers also could take a hike throughthe mountain path to see the Ella Rock where theviews are just striking. The ancient secrets of theRavana Ella Falls, the sacred pilgrimage to Adam’sPeak, the historical rock fortress of Sigiriya-amysterious fortress that sheltered a King, from whichthe travelers could see the Mount Pidurangala and the densejungles of the Sinharaja Forest Reserve are allexceptional scenic views.
With an astonishing eight UNESCO World Heritage Siteswithin its compact shores, Sri Lanka is indeed a marvelof wonders packed in a little island.The city of Anuradhapura especially, passes as one ofthe grandest monastic cities in Asia established in the4th Century BC with the arrival of Buddhism wherethe infamous ‘Sri Maha Bodhi Tree’ exists, grownfrom the original tree under which the Buddhaattained enlightenment.The most popular World Heritage Site and ‘the eighthwonder of the world’ Sigiriya, is one of the mostremarkable archaeological sites of a stupendous rockfortress. It is covered with beautiful frescoes ofcelestial maidens earning it the description as theworld’s largest picture gallery.
Q. Please let us know your point of view on how to strengthen further the close economic ties between Sri Lanka and Korea.
Sri Lanka maintains most affable and genial bilateral relations, in all spheres with the RoK not since the establishment of diplomatic relations in 1977 but since many decades ago. This was hinged mostly on trade, popularly known as “Silk Route” since Sri Lanka is strategically located in the midst of Indian Ocean. On the same note, most of the vessels of the RoK, both cargo and petroleum, pass the Southern region of Sri Lanka, thus manifesting the significance and vitality of the location of Sri Lanka to the RoK. Sri Lanka is of strong and firm conviction that consistent, stable, predictable and congenial bilateral relations would always accrue tangible political and economic utility not only to Sri Lanka but to the RoK as well.
It is noteworthy to indicate that the Korean language has been adopted as a subject for the University entrance since 2021 and in 2023, the University entering students will be able to sit for the Korean language as a foreign language at the entrance of Sri Lankan Universities.
This initiative could be considered as a very strong step of deepening bilateral relations by enhancing the people-to-people contacts of both countries.
In January 2022, Foreign Minister of Sri Lanka undertook an official visit to the Republic of Korea as a major step of deepening bilateral relations between two countries. During the visit, Sri Lankan Foreign Minister paid courtesy calls on the high-level political figures in the Republic of Korea including the Prime Minister, Speaker of the National Assembly and the Minister of Foreign Affairs and had discussions on elevating bilateral relations in the economic, socio-cultural and political spheres in both countries. Moreover, the Speaker of the National Assembly of the Republic of Korea undertook an official visit to Sri Lanka in January 2022 under the invitation made by the Foreign Minister of Sri Lanka with the purpose of deepening the relations between two parliaments of the Republic of Korea and Sri Lanka.
Both Sri Lanka and the RoK need to work together to identify various ways and means to further strengthen and elevate the trade and investment cooperation between the two countries. It is pertinent to explore the avenues to address the tariff and non-tariff barriers that may exist in order to increase the trade volumes between the two countries which were strongly discussed during the recent visit of Sri Lankan Foreign Minister to the Republic of Korea including the revision of protocols of the double taxation agreement between two countries. Sri Lanka offers attractive incentives for the potential Korean investors. The Korean companies could utilize Sri Lanka’s strategic location to gain access to the most-populated South Asian market, emerging African markets as well as European Union market thorough the GSP Plus scheme. There is a vast potential to increase travel and tourism industry between the two countries considering the regular air connectivity and diverse travel experiences offered by both countries. Overseas Development Assistance to Sri Lanka comprises a very important aspect of the bilateral relationship between Sri Lanka and the RoK. RoK’s ODA programme has contributed towards Sri Lanka’s development process through loan assistance under the Economic Development Co-operation Fund (EDCF), and grant assistance via the Korea International Cooperation Agency (KOICA).
Moreover, Sri Lanka has become one of the countries among the 16 labor sending countries to the RoK which is greatly important to both countries when it comes to bilateral economic relations. Currently, RoK has been considered as one of the lucrative and popular employment destination of Sri Lankan youth where more than 20,000 Sri Lankans are being employed. The average contribution or the remittances from the migrant workers of Sri Lanka in the RoK is around 7.75% of the total foreign remittances or equivalent to 0.62% of the total GDP of Sri Lanka.
This year is also important for both countries as it marks the 45th anniversary of establishment of bilateral relations between two countries.