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Economic relations between Nepal and Sri Lanka

BY Swarna Perera

Sri Lanka and Nepal share longstanding bilateral relations since the establishment of diplomatic relations in 1957. Our two countries share a unique spiritual and cultural affinity in South Asia and our engagement and cooperation are testimony to excellent bilateral relations emphasized by abiding friendship, mutual respect and deep understanding. This longstanding relationship could be developed further for mutually beneficial economic cooperation in a competitive global environment to strengthen the economic ties in Trade, Investment and Tourism.
I believe it’s our responsibility to explore new avenues and find ways and means to expand trade and investment opportunities between our two countries. I need to be honest and frank in our trade statistics between Sri Lanka and Nepal. Our total trade remains at US $ 2.27 Mn as of July 2018 and US $ 1.78 Mn in 2017, which needs our close attention to increase it by many –folds perhaps not by 10 times, I believe, 100 times in the years to come.
Sri Lanka provides higher education opportunities to Nepal students. I would say Sri Lanka has become a paradise especially for South Asian countries for education. We are willing to open our doors for more Nepali students in emerging Private Institutions in the South Asian Region, like the Sri Lanka Institute of Information Technology (SLIIT), National School for Business Management (NSBM), Esoft etc. We invite Nepal to utilize education opportunities in Sri Lanka.
In terms of bilateral trade and investment between the two countries, the potentials for greater trade linkages are yet to be touched and can be further increased through the South Asian Association for Regional Cooperation (SAARC), South Asian Free Trade Area (SAFTA) and Asia Cooperation Dialogue (ACD) as Nepal and Sri Lanka being active members of those organizations.
Multi-disciplined economic strength, local competiveness, international trade and investment are our priorities. The ingredients to build economic prospects are peace, democratic freedom, equal opportunity for education, developed infrastructure, strong economic practices, and the ability to ensure mobility. Sri Lanka, enriched with these qualities, is looking forward to strengthen links with other South Asian countries.
Based on the religious and culture linkages and commonalities among the people we have a great opportunity to invigorate the tourism among the pilgrims. Although, annually, approx. 50,000 Sri Lankans visit Lumbini, Nepal for pilgrimage, number of tourists arrivals from Nepal to Sri Lanka in last few years remain at low, Tourist arrivals in 2018 – 2968 as of July and in 2017- 5944. Therefore, I wish to propose interactions between Nepal and Sri Lanka tour agents with facilitation of the two governments to look forward to link with existing tourist attraction with “Buddhist Trails” and “Ramayana Trail” and create new trails between our cultural and religious sites.
In addition, presently, Sri Lankan private medical services and related facilities are rapidly growing with cutting edge technology and we wish to promote Sri Lanka as a hub for medical tourism. I invite Nepal to accrue benefit of our modern medical services.
Direct air connectivity between the main commercial cities of the two countries is vital for our trade and economic cooperation. We need to consider re-start of direct flights between the two countries. In this regard, we need to consider all possible options at technical level. Presently, Sri Lankan Airlines operates flights to 105 destinations of 45 countries around the world. We invite Nepalese to use Sri Lanka as a transit point to be connected to rest of the world.
The Government of Sri Lanka accords high priority to build economic partnership with countries having business potential. This effort includes working with countries to improve business environment in order to enhance investment opportunities for Sri Lankan companies, which will in turn benefit the economic growth of Sri Lanka.
Sri Lanka remains open to international trade, offering an investor friendly atmosphere, and encouraging foreign direct investment aimed at achieving greater integration into the world economy. An economy identified with a relatively high growth among emerging market economies, Sri Lanka’s geo-strategic location, strong human development fundamentals, rule of law, good governance, transparent and stable policies and the quality of infrastructure are the ingredients to support economic growth.
I wish to highlight that we have one of the most business friendly environments in the South Asia region with a transparent regulatory framework. We attach high priority to improving the business climate by paying close attention to investment policies, the ease of doing business, trade policy and trade facilitation in order to promote trade and investment more aggressively. Given these features and experience, Sri Lankan companies are willing to join hands with Nepalese entrepreneurs for investments and joint ventures in Nepal.
Further, Sri Lanka has advantages in terms of market access through Free Trade Agreements. The Government of Sri Lanka has joined the South Asia Free Trade Agreement (SAFTA) and we consider the Free Trade Agreement as a springboard to enter the Nepalese market.
There are several Sri Lankan companies from the sectors of Education, Power generation/electricity, Banking, Hospitality and Health intending to pursue investment opportunities in Nepal. For your kind information, I would like to indicate that over 50 Sri Lankan companies in the sectors of Manufacturing, Apparel industry, Service, Agriculture have invested in several South Asian countries. We would like to invite those Sri Lankan investors and potential investors from Sri Lanka to explore opportunities available in Nepal.
Sri Lanka is moving towards to become an export driven economic hub in the region, with effective connectivity with the region and the world via a highly developed network of ports and airports.
We need to explore new avenues to add fresh impetus to trade and commercial relations. We believe that the Air Services Agreement signed in 2009 would be helpful to strengthen bilateral trade and tourism between the two countries. I believe regular interactions including Bilateral Consultation and visits of dignitaries would be helpful for us to build a strong and long-standing trade and economic relations between the two countries.
I wish to reiterate Sri Lanka’s readiness to expand economic ties with Nepal for mutual benefit of our peoples. I look forward to a constructive dialogue and greater interaction to further strengthen trade relations and closer engagement for the mutual benefit of the two countries with renewed optimism and vigor.
I reiterate Sri Lanka’s readiness to expand our economic ties with Nepal to the mutual benefit of our people.
(Excerpts of the address by Sri Lankan ambassador Swarna Perera at a programme on “Promotion of Economic relations between Sri Lanka and Nepal” held in Kathmandu recently.)

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