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Sunday, 8 April 2012

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Sri Lanka has potential to be another Singapore - Vietnam envoy

"Sri Lanka is a major economy and it has the potential to be another Singapore", said Vietnam Ambassador to Sri Lanka Ton Sinh Thanh. He was addressing a seminar on 'Exploring the Potential for Sri Lanka-Vietnam Economic Cooperation' organised by the Institute of Policy Studies (IPS).

Thanh said that there is enormous potential for trade and investment between Sri Lanka and Vietnam and added that close ties will help boost the economies of both countries.

He said both countries occupy excellent geographic locations at the most crowded international sea routes.

Vietnam will not ignore the potential of Sri Lanka which has a GDP of nearly $60 b and a per capita income of $ 2,830 which is twice that of India and Vietnam. Sri Lanka will become a $ 100 b economy in a few years considering the current economic growth rate which is at around seven percent", Thanh said.

Sri Lanka-Vietnam relations were strengthened with the opening of the Vietnam Embassy in Sri Lanka in April 2011 followed President Mahinda Rajapaksa's visit in October the same year.

The Vietnam-Sri Lanka Business Council was formed in 2010 as the 20th business council of the Ceylon Chamber of Commerce.

Thanh said that despite great economic potential economic data reveal that bilateral relations remain limited. The increase of trade volume last year from $ 93 m to $ 113 m was good news but it is only 0.056 percent of the total of Vietnam's trade with the world and 0.34 of Sri Lankan trade with the world.

Sri Lankan exports to Vietnam are around $ 30 m with a few product lines. Sri Lankan FDIs in Vietnam had been low being around $ 13 m while not a single Vietnamese FDI project has been registered in Sri Lanka.

Thanh said that Vietnam and Sri Lanka signed MoUs for cooperation in agriculture but implementation is extremely slow. Tourism growth between the two countries was not satisfactory as only around 2,000 Sri Lankans visit Vietnam annually. This is a small fraction considering the six million tourists who visited Vietnam in 2011.

Sri Lanka and Vietnam have signed 25 agreements, of which 17 are for economic cooperation in trade, investment, tourism, aquaculture, oil, and gas, machinery and education.

Vietnam signed a contract of $ 500 m to export oil products to Sri Lanka during the Vietnam delegation visit to the Sri Lanka Expo 2012. "The complicated tax system, lack of promotional activities and connectivity are the main reasons for low economic cooperation between Vietnam and Sri Lanka", the Ambassador said.

Executive Director IPS, Dr. Saman Kelegama said that the time has come for Sri Lanka to explore new export markets in Asia which is growing faster than the US and EU.

He said Vietnam investments could be attracted in the manufacture of machinery for agro industries, food processing, fisheries and oil exploration.

Sri Lanka and Vietnam companies can explore joint ventures in IT, garments, tourism, port services, gems, tea, rubber, fisheries and infrastructure development.

 

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