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Thursday February 29th, 2024

Sri Lanka Thailand FTA to unlock untapped trade and investment: President

ECONOMYNEXT – A free trade agreement with Thailand during the visit of Prime Minister Srettha Thavisin will allow the two countries to benefit from potential trade and investment that is untapped at the moment, President Ranil Wickremesinghe has said.

“There is considerable potential to develop tourism, trade and other areas of economic cooperation between Sri Lanka and Thailand,” President Wickremesinghe was quoted as saying in a statement after bilateral discussion the a delegation led by Prime Minster Thaivisin.

“We see great potential for enhanced investments from Thailand coming into Sri Lanka and we discussed possible areas for collaboration.”

“There is significant potential for the expansion of trade and investment ties between our two countries which have remain largely untapped.”

Sri Lanka has also signed an agreement to co-operate on gem and jewellery.

A new bilateral air services agreement was also signed. Thai air will begin daily flights to Sri Lanka from March 31.

The statement by President Ranil Wickremesinghe after concluding bilateral discussions is reproduced below:

I am extremely pleased to welcome Prime Minister Thavisin and accompanying high level delegation including the Deputy Prime Minister and Minister of Commerce and the Deputy Minister of Foreign Affairs to Sri Lanka. I want to thank Prime Minister Thavisin for accepting my invitation to be the Guest of Honour at the celebration of the 76th anniversary of Sri Lanka’s independence, which will be held tomorrow.

The main focus of this visit is accelerating economic cooperation between Sri Lanka and Thailand. There is significant potential for the expansion of trade and investment ties between our two countries which have remain largely untapped.

The Prime Minister and I witnessed the signing of the Sri Lanka-Thailand Free Trade Agreement (SLTFTA) a short while ago. This is the second FTA Sri Lanka is concluding with an ASEAN partner, the first being with Singapore. The two sides worked expeditiously to conclude this agreement highlighting the strong interest of both Governments on this important endeavour. This is a milestone in our economic partnership and operationalizing the FTA will be a priority. The FTA is expected to boost trade and investment ties between the two countries.

Additionally, we have renewed the Air-Services Agreement to enhance connectivity between the two countries and a MoU has been concluded between the Gems and Jewellery Research and Training Institute of Sri Lanka and the Gems and Jewellery Institute of Thailand. Both of these agreements will enhance economic, trade and tourism exchanges.

Today, we have also had a very productive discussion on elevating Sri Lanka –Thailand relations. During the bilateral discussion between our two delegations which concluded a little while ago, we covered a wide range of areas of cooperation. There is considerable potential to develop tourism, trade and other areas of economic cooperation between Sri Lanka and Thailand. We see great potential for enhanced investments from Thailand coming into Sri Lanka and we discussed possible areas for collaboration.

We have also had a detailed exchange on cooperation in the agriculture and fisheries sectors which both countries have a keen interest in pursuing.

In the area of Tourism we have spoken in particular on promoting the Buddhist tourism routes and marine tourism. In order to facilitate travel between the two countries, we have agreed to consider entering into an agreement for a visa free travel arrangement on

reciprocal basis. Our officials will work towards finalizing this arrangement early.
I thank the Prime Minister and the Government of Thailand for the assistance extended by the Thailand International Cooperation Agency (TICA) over the years for capacity building, sharing of expertise, and training provided to Government officials in Sri Lanka by the Thai side in areas including fisheries, SMEs, tourism, climate change, public health, and agriculture.

We have also had a very useful discussion on cooperation in the area of defence and intend to augment our defence sector cooperation in the future. In particular sharing information and intelligence between defence establishment of both countries to curb transnational organized crime including human trafficking, drug smuggling, money laundering and financing of terrorism is important.

We also discussed that Sri Lanka and Thailand have cooperated well in regional fora such as BIMSTEC, IORA, ACD and the ASEAN Regional Forum (ARF). I congratulated Thailand on the initiatives undertaken during their Chairmanship of BIMSTEC in particular the Bangkok Vision 2030 which aims to propel BIMSTEC towards a prosperous, resilient, and open region, fostering sustainable and balanced growth.

As partners in the Indian Ocean region, we look forward to collaborating with Thailand along with other IORA partners within IORA which Sri Lanka is chairing at present.

The two countries have also worked well at various multilateral fora. I highlighted to the Prime Minister that there is much that needs to be done by likeminded countries of the Global South such as Thailand and Sri Lanka to create an effective impact in shaping the evolving new world order.

As you are aware, Sri Lanka has made significant progress in economic stabilization since the economic crisis of 2022. One of my principle strategies of economic growth and prosperity is to enhance bilateral trade, particularly with proven future potential of the East Asian and ASEAN region including Thailand. We are ready to engage with external partners and our aim is to ensure prosperity for our people.

With the advent of the Asian century, we believe there is expanded scope for cooperation between our Sri Lanka and Thailand, building on the traditional friendship that we already share.
One of the foremost tenets of my government’s foreign policy is deepening economic integration with the Southeast Asia region.

We also wish to be a part of the RCEP (Regional Comprehensive Economic Partnership) which is the world’s largest free trade pact, encompassing 15 Asia-Pacific economies and covering about 30% of the world’s

gross domestic product and population. As Sri Lanka begins to stabilize its economy and regain international confidence towards recovery and growth, we are looking at Thailand’s support as Sri Lanka undertakes this very important journey of economic transformation and integration with Asia.

Our business communities will be meeting following this briefing at the Sri LankaThailand Business Forum. I am pleased to see that a high-level business delegation of 21 companies from Thailand are also in Sri Lanka representing inter alia food and food processing, healthcare, energy, hospitality, tourism, fisheries, agriculture and manufacturing sectors during this visit, demonstrating the keen interest on building synergies with the Sri Lankan business community.

This will be a very useful opportunity for our companies to hear from the Prime Minister and me directly and understand the potential for trade and business. We will be creating many more such opportunities for our companies to interact more regularly, in the future.

I want to thank you Prime Minister Thavisin and accompanying high level delegation for your visit to Sri Lanka which has further cemented our existing historical and religious connections as in the economic sphere and I look forward to working closely on the initiatives we have taken during this visit

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Sri Lanka’s RAMIS online tax collection system “not operatable”: IT Minister

ECONOMYNEXT – Sri Lanka’s online tax collection system RAMIS is “not operatable”, and the Ministry of Information Technology is ready to do for an independent audit to find the shortcomings, State IT Minister Kanaka Herath said.

The Revenue Administration Management Information System (RAMIS) was introduced to the Inland Revenue Department (IRD) when the island nation signed for its 16th International Monetary Fund (IMF) programme in 2016.

However, trade unions at the IRD protested the move, claiming that the system was malfunctioning despite billions being spent for it amid allegations that the new system was reducing the direct contacts between taxpayers and the IRD to reduce corruption.

The RAMIS had to be stopped after taxpayers faced massive penalties because of blunders made by heads of the IT division, computer operators and system errors at the IRD, government officials have said.

“The whole of Sri Lanka admits RAMIS is a failure. The annual fee is very high for that. This should be told in public,” Herath told reporters at a media briefing in Colombo on Thursday (29)

“In future, we want all the ministries to get the guidelines from our ministry when they go for ERP (Enterprise resource planning).”

President Ranil Wickremesinghe’s government said the RAMIS system will be operational from December last year.

However, the failure has delayed some tax collection which could have been paid via online.

“It is not under our ministry. It is under the finance ministry. We have no involvement with it, but still, it is not operatable,” Herath said.

“So, there are so many issues going on and I have no idea what the technical part of it. We can carry out an independent audit to find out the shortcomings of the software.”

Finance Ministry officials say IRD employees and trade unions had been resisting the RAMIS because it prevents direct interactions with taxpayers and possible bribes for defaulting or under paying taxes.

The crisis-hit island nation is struggling to boost its revenue in line with the target it has committed to the IMF in return for a 3 billion-dollar extended fund facility. (Colombo/Feb 29/2024) 

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Sri Lanka aims to boost SME with Sancharaka Udawa tourism expo

ECONOMYNEXT – Sri Lanka is hosting Sancharaka Udawa, a tourism industry exhibition which will bring together businesses ranging from hotels to travel agents and airlines, and will allow the small and medium sector build links with the rest of the industry, officials said.

There will be over 250 exhibitors, with the annual event held for the 11th time expected to draw around 10,000 visitors, the organizers said.

“SMEs play a big role, from homestays to under three-star categories,” Sri Lanka Tourism Promotion Bureau Chairman, Chalaka Gajabahu told reporters.

“It is very important that we develop those markets as well.”

The Sancharaka Udawa fair comes as the Indian Ocean island is experiencing a tourism revival.

Sri Lanka had welcomed 191,000 tourists up to February 25, compared to 107,639 in February 2023.

“We have been hitting back-to-back double centuries,” Gajabahu said. “January was over 200,000.”

The exhibition to be held on May 17-18, is organized by the Sri Lanka Association of Inbound Tour Operators.

It aims to establish a networking platform for small and medium sized service providers within the industry including the smallest sector.

“Homestays have been increasingly popular in areas such as Ella, Down South, Knuckles and Kandy,” SLAITO President, Nishad Wijethunga, said.

In the northern Jaffna peninsula, both domestic and international tourism was helping hotels.

A representative of the Northern Province Tourism Sector said that the Northern Province has 170 hotels, all of which have 60-70 percent occupancy.

Further, domestic airlines from Colombo to Palali and the inter-city train have been popular with local and international visitors, especially Indian tourists. (Colombo/Feb29/2024)

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Sri Lanka rupee closes at 309.50/70 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 309.50/70 to the US dollar Thursday, from 310.00/15 on Wednesday, dealers said.

Bond yields were slightly higher.

A bond maturing on 01.02.2026 closed at 10.50/70 percent down from 10.60/80 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.10 percent from 11.90/12.00 percent.

A bond maturing on 01.07.2028 closed at 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.30/45 percent up from 12.20/50 percent.

A bond maturing on 15.05.2030 closed at 12.35/50 percent up from 12.25/40 percent.

A bond maturing on 01.07.2032 closed at 12.55/13.00 percent up from 12.50/90 percent. (Colombo/Feb29/2024)

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