Pakistan mulls export credit line

Sanjeevi Jayasuriya

*Pakistan - Sri Lanka Investment Bank mooted

*Joint venture agreements during President’s visit

Sri Lanka and Pakistan have strong ties in trade and investment. The two countries have benefited from the close economic relationship and will be entering into a new phase in development, Pakistan State Minister and Board of Investment Chairman Saleem Mandviwala told Daily News Business.

Trade volumes between Sri Lanka and Pakistan have been growing continuously and this year trade reached around US $ 300 to 400 million in terms of value. However, the entire Free Trade Agreement (FTA) between Sri Lanka and Pakistan is not implemented, Mandviwala said.

“We expect that the FTA between the two countries will be promoted and approved with the Budget presented today. The ratification of the FTA will further increase trade volumes and this will be of mutual benefit”.

Pakistan is looking at cement plants, sugar, textile, banking and dairy as possible investment options in Sri Lanka. The investment value will be vary from sector to sector. However, investors still have not quantified the potential investment flow to the country,” he said.

There is the possibility of signing joint venture agreements with the scheduled visit of the Pakistan President Asif Ali Zardari later this month.

Pakistan is looking at the possibility of extending an export credit line to Sri Lanka to import the necessary plants. There has been a dialogue with the Board of Investment and more delegation and interaction is needed both from Sri Lanka and Pakistan, he said.

“We are keen to do business in Sri Lanka.We extend support in the country’s economic development and defence. This would be a win-win situation for both of us,” he said. We are also exploring opportunities to set up a Sri Lanka Pakistan Investment Bank. We will be reaching a comprehensive economic agreement in the near future, Mandviwala said.

The FTA between Sri Lanka and Pakistan was signed in 2002 and became operational in 2005. Pakistan held a single country exhibition in 2008 showcasing textile, leather products, surgical and hospital equipment, chemicals and cosmetics and the next exhibition will be conducted shortly.