Free Trade Agreement between Sri Lanka & Indonesia.
On the 8th of March, Indonesian President Joko Widodo extended a warm welcome to the President of Sri Lanka; Maithripala Sirisena whilst he was on a state visit, by expressing Indonesia’s willingness to support Sri Lanka through the exchange of experiences and capacity building. The two heads of state discussed multiple sectors for potential cooperation such as Agriculture and Fisheries and publicly announced their mutual efforts to sign a free trade agreement between the two countries.
With a thriving population of nearly 260 million people, Indonesia is the fourth most populous nation in the world and is poised to be another feather in the cap for Sri Lanka’s efforts to establish itself as the trade hub of the region.
Sri Lanka is a small island nation with a population of approximately 21 million people, located on the Southern tip of India. For most, Sri Lanka’s status on the world stage has been one clouded by a debilitating war which spanned for 3 decades against arguably the most brutal terrorist organization in the world.
The ending of this conflict in 2009 heralded an era of peace and redevelopment and re-instated Sri Lanka to its rightful place glowing with an aura of Serendipity, an isle fabled and paralleled in history to Paradise.
The efficient management of the peace that now reigns within the country has fueled much Global interest in Sri Lanka’s development story, and has attracted widespread attention to its’ strategic and central location along the myriad of Sea and Air routes connecting the East and the West. Regional giants quickly rushed in to foster and cement Free Trade Agreements with a country which after decades of conflict was now seen as a beacon of peace and an indirect doorway for trade between nations with strained diplomatic relationships.
Sri Lanka has now harnessed FTA’s with countries such as India, Pakistan, Iran and Japan as well as several Regional agreements for trade cooperation. Agreements are also currently being negotiated and drafted with power house economies such as USA, Japan and China.
OSL Take:
With this latest potential to Sri Lanka’s portfolio of existing and pending Free Trade Agreements, it is clear that Global investors looking to hedge their investments on the potential upside of any commercial enterprise which requires a substantial market should look no further than exploring the opportunity presented by Sri Lanka.
Indonesia, whilst being rich in natural resources such as crude oil, natural gas, tin and copper etc, relies on imports for the sustenance of its sizeable domestic market consumption. Machinery, Electronic Equipment and Vehicles form the mainstay of Indonesian imports and the fact that Sri Lanka is tirelessly canvassing Foreign Direct Investments (FDI) in its’ efforts to launch its development plans and eventual economic success, augers well for the astute global investor. With a raft of attractive incentives available for manufacturing and other investments which deliver value, the proposed Free Trade agreement is a key to unlock the true potential Sri Lanka offers to investors wishing to access large, demand filled markets brimming with consumers seeking their products.
| Article Code : | VBS/AT/27032017/Z-1 |