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National Chamber of Commerce of Sri Lanka held the seminar "Bilateral Trade between Russia and Sri Lanka"

On October 19, 2011 the National Chamber of Commerce of Sri Lanka in collaboration with the Embassy of the Russian Federation in Sri Lanka organized the special seminar "Bilateral Trade between Russia and Sri Lanka".

In his speech to the audience Mr. Asoka Hettigoda, President of the National Chamber of Commerce of Sri Lanka, stressed the historically friendly character of bilateral relations between Sri Lanka and Russia and expressed hope for further strengthening of bilateral cooperation in various spheres in particular trade and economic spheres. He appealed to Sri Lankan businessmen to study more actively Russian market and establish ties with Russian partners.

H.E. Ambassador of the Russian Federation Mr. Vladimir P. Mikhaylov while addressing the audience said the following:

Text of the speech

First of all, I would like to thank the National Chamber of Commerce of Sri Lanka for organizing this special Seminar on trade and economic cooperation between Russia and Sri Lanka, as well as for inviting me to address you.

As you well know, in recent years the traditionally friendly relations between Russia and Sri Lanka have being developed especially actively. The first-ever visit of the Russian Minister of Foreign Affairs Hon. Sergey V. Lavrov to Colombo in 2009, the first-ever visit of H.E. President of Sri Lanka Mr. Mahinda Rajapaksa to Moscow in February 2010 and his participation in the St. Petersburg International Economic Forum in June this year give good evidence to this. The meeting between the Presidents of our two countries gave a new impetus to the development of the bilateral cooperation in all directions.

In political sphere the bilateral relations can be defined as excellent: Russia welcomed the victory of the people and the Government of Sri Lanka over terrorism and separatism, constantly renders support in their efforts to assure post- -conflict recovery and development as well as complete reconciliation without any interference and pressure from outside. As you probably know, this year the Parliamentary Friendship Association Sri Lanka – Russia was established. The Sri Lanka – Russia Friendship Society that is headed by Hon. Susil Premajayantha, Minister of Petroleum Industries of Sri Lanka, has consolidated notably. The exchange of delegations and representatives between our countries in various spheres became more active.

The legal basis of the bilateral relations is being consolidated: during the last 3 years several new agreements were signed, e.q. the Agreement on Suppress of Illicit Narcotics Trafficing, Agreement on cooperation between the Prosecutor General's Offices, Agreement between the Russian Broadcasting Corporation "Voice of Russia" and the Sri Lanka Broadcasting Corporation. The Agreements on Cooperation in the field of tourism and in the field of Mass Communications are ready for signing. A number of other bilateral documents are under consideration of the respective Ministries and authorities of the two countries.

Such an important event as the launch of direct air communication between Colombo and Moscow "Sri Lankan Airlines" must be also mentioned. According to our information, the Russian air company "Aeroflot" also intends to reopen its regular flights from Moscow to Colombo from November 2nd, this year.

All mentioned above establish favourable conditions for development of bilateral trade and mutually beneficial cooperation in economic sphere.

During the meeting with H.E. President of the Russian Federation Mr. Dmitry Medvedev in June, this year in Saint-Petersburg, H.E. President of Sri Lanka Mr. Mahinda Rajapaksa noted the sustainable growth of the Sri Lankan economy and proposed to the Russian Government and the Russian private sector to consider possibility to invest in Sri Lanka, especially into such infrastructure projects as construction of highways, railways, irrigation system as well as into other development spheres. His Excellency also emphasized that Russian  investments to Sri Lanka would consolidate the bilateral relations in general.

In reply H.E. President of the Russian Federation Mr. Dmitry Medvedev said that it was obvious that with the achievement of stability,  additional favourable conditions had been created for the speedy building-up of the Russian – Sri Lankan ties in many directions and in particular – in rehabilitation and modernization of the island's infrastructure.

By the instruction of H.E. Mr. Dmitry A. Medvedev the concerned Russian ministries had studied the issues which had been raised in the message of H.E. Mr. Mahinda Rajapaksa and discussed during the talks, in particular related to the Russian participation in realization of projects aimed at the developing of  road and transport infrastructure as well as of irrigation system, hotel business and tourism in Sri Lanka. H.E. President also noted that Russian organizations working in these areas had expressed their readiness to establish mutually beneficial cooperation and were interested in specific proposals.

I should note that despite the level of economic cooperation between our countries and the volume of the bilateral trade ranks below the level of their political relations, nevertheless, in my opinion, recently some progress can be visible in these spheres as well.

With the assistance of the Embassy of the Russian Federation in 2010 the Russian company “Gazprom” sent its specialists to Colombo to study  possibilities of carbon exploration in the offshore of the island. In August 2011  the high level delegation  headed by the Managing director of the “Gazprom International” V.Gulev visited Sri Lanka. At the moment the Russian company is attentively considering the materials received from the Sri Lankan side to define its further steps. As you understand, the beginning of work in this sphere means investment of hundreds of millions USD. So, naturally, studying will be detailed.

The Embassy also managed to draw attention of one of the Russian construction companies to participation in the program of the Sri Lankan Government on construction of low-cost houses. Appropriate MOU has been signed and at the moment the respective contract is under discussion.

Moreover, I would like to emphasize that in the development of bilateral trade and economic cooperation a lot depends on the Sri Lankan side, and not only n the Government, but also on private companies which could make concrete proposals  that should, undoubtedly, be of commercial interest to the Russian partners. There is no doubt that in Russia you could find modern technologies for competitive prices.

As for the bilateral trade, its volume is not too big. According to the statistics of the Russian Federal Customs Service, in 2009 the turnover was USD 290 mln. (in comparison with 2008 it reduced by 10.2%), with the Russian export to Sri Lanka amounted USD 21.1 mln. and import – USD 263,7 mln. Year 2010 showed significant growth of our bilateral trade (by 145.2%), that reached record figure of   USD 423 mln,: of which USD 308.5 mln. being the Sri Lankan export to Russia and USD 114.5 mln – Russian export to Sri Lanka. Although Russian export increased by 423.5%, the significant disbalance still remains. The stock-list of the Russian export, like it was before, mainly consists of chemical industry items, newsprint paper and cardboard. During 2008 – 2010 Russia was a leading importer of Ceylon tea: according to the data of the National Tea Board of Sri Lanka, in 2008 the volume of Sri Lankan tea export to Russia was 69.5 thousand tons, in 2009 – 42.4 thousand and in 2010 – 42.6. The share of Russia in the export of Ceylon tea in 2010 was 15.23%. I am sure that despite of global economy recession, trade between our countries could grow significantly especially by means of its diversification and increase of volume of Russian goods delivery, especially of high-technology items, to Sri Lanka. Good example here is a Russian intellectual product – anti-virus base “Kaspersky” that gained leading positions in the Sri Lankan market.

I should also mention about the significant growth of Russian tourists  visiting Sri Lanka: in 2010 their number was about 18 thousands, that is 3 times higher than in 2006. During the first 8 months of 2011 the number increased 28% in comparison with the same period of 2010. There is no doubt that this tendency will remain.

Moreover, I would like to mention the intensification of contacts between  businessmen of our two countries. More Russian businessmen now visit Colombo, including international trade fairs and exhibitions being held here (for instance, jewellery exhibition “Fascets-2011”). The number of Sri Lankan businessmen who visit trade and industry exhibitions and trade fairs in Russia also grows. The group of Sri Lankan businessmen including those who represent Sri Lanka – Russia business council recently visited Moscow onboard the first flight of the "Sri Lankan Airlines" and had meetings with Russian partners, including representatives of the Chamber of Commerce of the Russian Federation.

By the way, recently the Sri Lanka – Russia Business Council prepared a list of the Russian goods which are, on its opinion, have good perspectives in the Sri Lankan market. It is useful, but not enough: it is necessary to make concrete commercial proposals to the respective Russian companies.

In conclusion I would like to stress that despite the Russian Embassy in Sri Lanka does not have commercial section, we are ready to further promote the development of bilateral trade and economic cooperation.


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