Sri Lanka: PM's visit signals it's open for business

The visit of Sri Lankan Prime Minister Ranil Wickremesinghe to New Zealand this weekend will reinforce the close connection between the two countries and promote further trade opportunities.

Prime Minister John Key visited Sri Lanka in February and has said that, under Mr Wickremesinghe’s leadership, the country has entered a new phase in post-civil war development – with “an increasing number of New Zealand businesses recognising the exciting opportunities it offers.”

The October 1-3 visit, the first bilateral visit by a Sri Lankan prime minister to New Zealand, will highlight those opportunities for forging further trade links for mutual economic benefit.

The itinerary for the delegation, which includes four senior ministers and a trade and media contingent, covers a range of official, business and community events.

As well as taking part in bilateral talks, Mr Wickremesinghe is meeting with business leaders, visiting a Fonterra plant and addressing Parliament on "Sri Lanka’s Place in the World" – an event hosted by the Asia New Zealand Foundation and the Consulate for Sri Lanka.

Aruna Abeygoonesekera, Sri Lanka’s Honorary Consul in New Zealand, says the message Mr Wickremesinghe will be sharing is that his country is “open for business.”

Trade favours New Zealand
The export balance between Sri Lanka and New Zealand is one to six, with tea and dairy the largest exports respectively. However, Mr Abeygoonesekera says the opportunities Sri Lanka can offer could even out that balance for the benefit of both economies.

“Due to past conflict, there have been some negative perceptions about doing business in Sri Lanka but the country is very settled now,” he says.

“Tourism is booming and the key really is to come and see for yourself. The general business environment is very good – Fonterra, for instance, has been in Sri Lanka for a very long time.”

Mr Wickremesinghe’s government, elected in 2015, has prioritised a platform of clean government, economic renewal and development, and community reconciliation. A new constitution is being drafted and Sri Lanka is looking to its international engagement.

Dairy exports to Sri Lanka, largely through Fonterra, are worth $300 million annually to New Zealand, with milk powder the major dairy nutrition for Sri Lanka’s 21 million population.

Fonterra also operates within Sri Lanka through its Milk Products Lanka arm, including a plant in Colombo, employing around 600 Sri Lankans and sourcing milk from thousands of Sri Lankan farms.

Potential for outsourcing
Mr Abeygoonesekera says the Sri Lankan workforce is one of the key opportunities.

“While 21 million might seem high compared to New Zealand, it’s a very sustainable population and there’s real potential for outsourcing. Sri Lanka could provide trained manpower, manufacturing to New Zealand standards, which industries from IT and data processing to the food industry could tap into.

"Sri Lanka has lots of textile manufacturers, Labour is still relatively cheap, we do not have sweat shops, and there is also a good opportunity for value-added and niche quality markets.”

And while Sri Lanka’s dairy industry is building steadily, the population size means there is sustainable demand for Kiwi products.

“There is a strong and loyal connection between our two countries and the large delegation is an indication of the mutual respect between Mr Key and our prime minister,” Mr Abeygoonesekera says.

“It demonstrates New Zealand can be confident of strong continuing economic, cultural and trade relationships with Sri Lanka. Equally, it shows New Zealand is committed to its loyal relationship with Sri Lanka.”

Air links could be better
Chula Rajapakse, spokesman for the United Sri Lanka Association (USLA) which supports and promotes Sri Lankan culture and traditions among Sri Lankans living in New Zealand, agrees the visit will be “very good for bilateral relations."

“Sri Lanka and New Zealand have much in common,” he says. “Both are small countries with larger neighbours, and our prime ministers know each other well as fellow stalwarts of the International Democratic Union [a grouping of centre-right parties].

“Sri Lanka has a 95% literacy rate and English literacy rate of around 70% – the potential of that educated workforce is limitless.”

Dr Rajapakse says a non-stop direct air route would support increased tourism and business activity between the two countries.

Travel to Sri Lanka requires going through Singapore, Malaysia or Hong Kong. But, as the crow flies, flights from Wellington or Auckland to Colombo would take only nine hours.