Vietnam, Sri Lanka: A lasting bond of friendship

Sri Lankan's ambassador to Vietnam, Aparekka Ratnapala, spoke to Vietnam News on the occasion of Sri Lanka's National Day.

Q: Could you give us some background information about Sri Lanka?

A: Sri Lanka is a free, independent and sovereign nation. Legislative power is exercised by a Parliament elected by the people on a proportionally representative basis.

The executive power of the people, including defence, is exercised by the President, who is also elected by the people.

The people of Sri Lanka are of diverse ethnicities and faiths. The country is an ancient centre of Buddhist religion and culture. The ethnic majority are the Sinhalese, who are mostly Buddhists, and minorities include Tamils, Moors and Burghers.

Sri Lanka has an export-oriented economy with a widely expanding service sector. Tea, rubber and coconut are important export agricultural crops, with tea being a major foreign exchange earner. Other crops of importance are cocoa and spices such as cinnamon, cardamom, pepper and cloves.

The Government encourages foreign investment in diverse areas, such as banking, finance, telecommunication, energy, information technology, electronics assembly, light engineering, automobile parts and accessories manufacturing, tourism, mining, agriculture and agro-processing, gems and jewellery, healthcare and pharmaceuticals, port-related services, and infrastructure projects.

The Constitution of Sri Lanka guarantees the protection of foreign investment. Sri Lanka continues its efforts to introduce maximum and effective devolution of power to the provinces to meet the aspirations of the minorities, including the Tamil speaking peoples, as well as other communities, especially those living in the North and East.

The Government has emphasised the fact that the task of finding a political solution to the conflict in the Northern and Eastern provinces requires a multi-party effort and inclusive approach.

This involved the formation of the All Party Representative Committee (APRC) and the appointment of a Panel of Experts in the hope of reaching a national consensus among political parties.

It is the firm conviction of the government of the President that the conflict in Northern and Eastern provinces cannot be solved through military means alone.

The Government is fully committed to finding a lasting negotiated political settlement to this conflict. The proposals for the political settlement have been submitted by the All Party Representative Committee (APRC).

Today, the Government has been compelled to take military action against the terrorism of the Liberation Tigers of Tamil Eelam (LTTE), and the current military approach towards finding a solution to the conflict is directed at protecting our civilians.

Q: How has the long-lasting conflict between the Sri Lankan Government and Tigers impacted Sri Lanka's socio - economic development?

A: The number of countries that have suffered from terrorism in recent times is very high. At a time when the world is witnessing unprecedented economic progress, some societies are held back by the cruelty of terrorism. Among these cases, Sri Lanka is no exception: the country has been a victim of the terrorism of the Tigers for over two decades.

Sri Lanka's economic growth rate reached around 6.7 per cent by the end of last year. Exports increased by 11 per cent. Foreign direct investment doubled. Unemployment reached an all time low and reserves expanded.

This performance would have reached more impressive figures still were it not for the negative perceptions of Sri Lanka's investment environment generated by the LTTE's terrorism.

Economic growth by the end of the last year was supported by all three sectors, with the industrial sector the main driving force in the economy.

Last year, cumulative export earnings reached US$6.877 billion, growing by 11 per cent. The cumulative expenditure on imports recorded an increase of around 8 per cent year-on-year in 2007 and amounted to $10.142 billion.

International oil prices, which hit a record above $95 a barrel in November, was a major contributor to higher imports.

Industrial exports grew, with exports of textiles and garments constituting 40 per cent of the total exports. Other industrial exports registering year-on-year increases included: machinery and equipment; rubber based products; food, beverages and tobacco; and diamonds and jewellery. Agricultural exports accounted for 22 per cent of the total exports.

Foreign investment in the country continued to increase, demonstrating the better performance of the Sri Lankan corporate sector in an environment of ever-higher economic growth.

Since national independence the Government has given the highest priority to education, providing free education to all children from kindergarten through university.

The Government also spends a huge sum of funds to provide equitable health facilities for all, securing free health services in all hospitals throughout the country irrespective of social class, economic condition, religion and ethnic origin.

Sri Lanka's tourism industry is a major foreign exchange earner for the island's economy. Despite the insurgency in the north, Sri Lanka attracts thousands of visitors each year from around the world.

Q: How would you describe the course of the relationship between Vietnam and Sri Lanka ? What areas should the two countries promote in the future ?

A: Sri Lanka-Vietnam relations have roots in the two countries' affinity to Buddhism and were nurtured by the solidarity of Sri Lanka during Vietnam's struggle against colonialism.

Sri Lanka has firmly favoured Vietnam during the Vietnamese struggle for freedom and also recognised the Revolutionary Government of the Republic of Southern Vietnam. Later, following re-unification, Sri Lanka was one of the first countries to establish relations with Vietnam.

Since the establishment of diplomatic ties in 1970, Sri Lanka and Vietnam have signed a number of agreements and MoUs in many fields for co-operation between the two countries and exchanged high-level visits. The two countries have supported and co-operated with one another at many a multilateral forum.

Vietnam has benefited from the South-South Technical Co-operation Programme of the Ministry of Foreign Affairs of Sri Lanka, introduced in 2001, and a considerable number of Vietnamese nationals continue to undergo training and skill development programmes in selected centres of educational excellence in Sri Lanka.

There are also a considerable number of Sri Lankans living and working in Vietnam, mostly professionals attached to multinational organisations, in the hospitality sector, etc. Several Sri Lankan companies have investments in industries ranging from garments and textiles to desiccated coconuts as well as facets of the service sector such as shipping.

Bilateral trade relations between Sri Lanka and Vietnam continue to register a steady growth, especially following the opening of the Vietnamese economy and the Vietnamese admission into the World Trade Organisation (WTO) in November 2006.

Potential for further expansion of trade, investments and tourism between the two countries is growing and the business communities of both countries should make use of these opportunities.

Sri Lanka's current exports to Vietnam include diamonds, dyed and crocheted fabrics, natural rubber and non-cellular rubber, tea, textile materials, knitted and crocheted synthetic fabrics, apparel and clothing accessories.

Imports from Vietnam include processed agricultural products, reception instruments for television, tractors and other agricultural machinery, cotton, marble, synthetic staple fibres, glazed ceramic flags, paving and wall tiles, acyclic hydrocarbons, active yeast, synthetic filaments, herbicides, anti-fungal products, and natural rubber. The two-way trade between Sri Lanka and Vietnam at present is $40 million and the potential for an increase remains untapped.

There are opportunities for Sri Lanka's business community in the promotion of intermediate goods for industries such as construction, hospitality, plantations and garments.

Sri Lanka could also offer consultancy/professional services in the fields of engineering, architecture, construction, hotel management and business management.

The export market for consumable products such as confectioneries, tea and other beverages including herbal drinks, cosmetics, rubber products, and gems and jewellery are also growing as a result of the rising purchasing power among the 83 million-strong Vietnamese population due to fast economic growth. Currently, Sri Lanka enjoys favourable import duties for Sri Lankan products as Vietnam extends MFN status to Sri Lanka.

These opportunities have to be explored by the business community of both countries.