Press Releases

Address of His Excellency Mr. Alexander Karchava, Ambassador of the Russian Federation to Sri Lanka, November 7, 2013

Esteemed Mr. Chairman,

Dear ladies and gentlemen,

Members of the National Chamber of Commerce of Sri Lanka,

Allow me to greet you all and express my gratitude for organizing a special Seminar on trade and economic cooperation between Russia and Sri Lanka as well as for the kind invitation to be present here today and address to you.

Russian market has always attracted attention of foreign companies and its investment attractiveness is increasing significantly. The main reason, I think, is that present-time Russia mighty nation with stable political, economic and social structure made a great progress in its development over the past years. Essential restructuring of the economy, the launch of new industries and regaining leadership in traditional industrial sectors as well as the development of small and medium-sized businesses are key economic objectives of the Russian Government.

Ranking ninth in the list of the worlds biggest economies, Russia accumulated a GDP of 1.953 billion USD in 2012, boosted mainly by gas and exports, making it the worlds eighth largest exporter.

The year 2012 showed the growth of the main economic indicators of our country: GDP growth 3.4% (USD 2.510 trillion), GDP per capita appr. USD 14 000, unemployment rate 5.3%. Russia has managed to fend off much of the financial fallout caused by the European financial crisis, and its economy of forecast to jump 3.7% in 2013.

I am sure that immense resources of my country, its huge skilled workforce and other factors vital for economic growth are all in place and it is only natural that Russia is actively looking for new foreign partners.

I am happy to note that relations between Russia and Sri Lanka give an excellent example of sincere friendship and mutual understanding that can exist between two countries and nations. We do appreciate the fact that Russia and Sri Lanka share similar approaches to the key international issues such as fighting terrorism, building democratic, fair and equitable world order, ensuring central role of the UN and its Security Council in international relations, settlement of regional and local conflicts.

But in the same time I have to admit that the political interaction between our two countries is much far ahead economic cooperation. Nevertheless, in my opinion, some slow but still dynamic progress in strengthening of economic relations is visible.

The volume of the bilateral trade is not too big yet: according to the Russian statistics, the general trade turnover between Russia and Sri Lanka in the year 2012 reached almost USD500 million mark. But Im pleased to note that within the period of January-August, 2013, the trade turnover reached significant mark of almost 521 mln. USD (60% percent growth in comparison with the same period of 2012). The major part was secured by the delivery of the Russian hardware including multipurpose helicopters to Sri Lanka (appr. 190 mln. USD). The other export goods from Russia to Sri Lanka are building materials, transport equipment, chemicals, wheat and sugar.

The bulk of the Sri Lankan export to Russia is formed by tea (62%), purchase amount of which makes Russia the leader among other Sri Lankan partners. In this connection I would like to mention that Russia now being a member of the World Trade Organization, is now fulfilling its promise to lower import tariffs for Sri Lanka, including duties for packed tea.

Other export items from Sri Lanka to Russia are gems and jewellery, spices, ceramic ware, rubber and rubber products, wooden products and handicrafts.

I would like to note that more and more Russian tourists visit Sri Lanka, the Pearl of the Indian Ocean. In 2012 appr. 28.500 Russian tourists visited the island (in comparison with the year 2011 the number of tourists increased by almost 30%). I think Sri Lanka is one of the best tourist destinations and has a great potential in this sphere. It has practically everything for tourists: warm weather, beautiful beaches, cultural heritages, natural parks and gardens, Buddhist relics, etc. The main competition for Sri Lanka, as I see, is coming from the Asian region, particularly from such traditionally popular tourist destinations as Thailand and Indonesia. In this regard I would like to pay your kind attention by making a small friendly remark that, unfortunately, very often high hotel rates meet rather low level of service as well as in general the prices in the Sri Lankan tourism sector are much higher than in other Asian countries, so popular among tourists.

I would like to list here some of the recent developments in the economic sphere of our bilateral relations. Last year the company Sri Lanka Gateway Industries informed us that the Special Zone for the Heavy Industrial Zone (Free Zone) in Trincomalee was approved by the Cabinet of Ministers, and proposed Russian companies to take this opportunity and participate in the respective joint ventures.

Russian company REDA under the Builders Association of Russia is preparing feasibility study for the project of construction a float glass factory since construction in Sri Lanka is in full swing nowadays and float glass is in great demand.

At the moment, Russian and Sri Lankan sides are considering the possibility of establishing an intergovernmental commission on trade and economic, technological and humanitarian cooperation. Under the responsible guidance of Ministers or Deputy Ministers such a commission could facilitate the development of bilateral ties through joint meetings, shared experience and develop strategies of strengthening mutually beneficial cooperation in economic, political, social and other spheres.

On a regular basis since 2010 the Russian company Gazprom sends its specialists to Colombo to study possibilities of carbon exploration in the offshore of the island and discuss it with the respective Sri Lankan officials.

Moreover, I would like to mention the intensification of contacts between businessmen of our two countries. Russian company Beyond Lanka Ltd. is working on the project to build the whole chain of eight 4 stars hotels in Sri Lanka (total investment more than 100 mln USD). Discussions with the relevant Sri Lankan authorities are in process. What they need now land for construction sites, i.e. in the Northern part of Eastern coast; in the Southern part of Eastern coast; near the Yala National Park; in the South coast; in Colombo region; in the Mountain region; in the Cultural Capital of Sri Lanka; in the heart of the Cultural Triangle.

In conclusion let me say that during 1 year of my stay in Colombo I became reassured that our two countries do have a good potential for expanding trade and economic cooperation. Besides the traditional spheres, I can see great potential for strengthening cooperation in such fields as education, space research, oil and gas exploration, power and energy industries, infrastructure, cement and glass industries, supply of potash fertilizer.

Dear Mr. Chairman,

Esteemed guests,

Ladies and gentlemen,

Im absolutely confident that with your invaluable and widely recognized expertise on the matter and with kind assistance of the Sri Lanka Russia Business Council under the guidance of its President Mr. Hiran Karunaratne, we will be able to further expand our bilateral trade and economic cooperation to the mutual benefit of two our nations.

Let me also wish all of you every success in your business endeavours,

Thank you for your kind attention.


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