Japan urges Sri Lanka to seize reform opportunity and boost bilateral ties
Daily FT: As economic uncertainty looms globally, Sri Lanka should pursue strategic reforms, diversify exports, strengthen foreign investment and defend the global free trade system, said Japanese Ambassador Akio Isomata while pledging continued bilateral cooperation to support these efforts.
This discussion took place at an interactive members’ evening with the Japanese Ambassador on the topic of ‘Aligning Sri Lanka’s economic revival with opportunities in Japan’. The event was organised by the Sri Lanka Japan Business Council and Expo 2025 where, delivering a speech, Ambassador Isomata emphasised the gravity of the current global situation, urging for collaborative reform, innovation and resilience.
He stated that in the face of the economic turbulence created by the “US typhoon” (referring to the trade tensions and policy shifts that were seen and affecting the global markets), diplomacy, trade policy, and domestic reform were three key fronts where Sri Lanka, Japan, and other countries must focus on and act together. “I think this difficult situation is a good opportunity for all of us here to proceed with real reform and true innovation.”
On the diplomatic front, while bilateral negotiations with the US were a priority, he also underlined the importance of the preservation of the global free trade system. “We have to emphasise the importance of the free trade system. We cannot just do away with 80 years of history of the Bretton Woods system, the free trade system we have built up from the experience of World War II. We have to emphasise the importance of this here, there and everywhere.”
In terms of trade policy, he urged the country to diversify export goods, export destinations, and supply chains under strategic trade policies, suggesting that new or strengthened Free Trade Agreements (FTAs) could act as a buffer against external shocks from the current global economic environment.
It was also important to enhance productivity and competitiveness to survive this “very serious situation”. Looking at the domestic economic system, he emphasised the need for structural reform, and a mid-term and long-term industrial development policy that would improve productivity and competitiveness within industries.
Ambassador Isomata also highlighted strengthened foreign investment ties as essential. “In order for us to be able to invite more foreign investment into our countries to energise or rejuvenate our economy, we have to concentrate and constantly improve investment and our business environment for that purpose. We all have to listen to the views of foreign investors.”
Turning to Sri Lanka, he also reaffirmed Japan’s commitment to the country’s economic recovery, and welcomed the country’s recent economic gains under the IMF framework, including a recently finalised debt restructuring agreement as a significant milestone.
“As we all know, Sri Lanka is now back on the right track for economic recovery, staying within the IMF framework. We have just finished the finalisation of this debt restructuring between the two countries. Of course, earlier last year there was a signing of MoU between the Sri Lankan Government and major creditor countries led by Japan, France and India.”
The Ambassador also said that it was necessary to further the economic collaborations between Japan and Sri Lanka, explaining ongoing efforts to boost investment and foster deeper business ties between the two countries. A key focus was also on youth and labour mobility, he said, highlighting two Japanese programs; the Technical Intern Training Program (TITP) and the Specified Skilled Worker (SSW) scheme, that would allow young Sri Lankan labourers gain industry experience for up to 10 years.
“Here in Japan, we will continue to be a committed partner of Sri Lanka for its development and prosperity. We are ready to extend any assistance that is required and within our power. What I want to do is continue to have good discussions with the business sector of Sri Lanka and all the segments of Sri Lankan society,” added the Ambassador.
OSL take:
Sri Lanka and Japan enjoy strong bilateral and trade ties with renewed interest on both sides to further strengthen and expand the existing ties between the natons. Japan has also been a key development partner of Sri Lanka extending much support in the development of infrastructure and supplementary infrastructure facilities required to meet the growing demands. With Sri Lanka undertaking a reforms programme covering all sectors and revamping trade ties while focusing on diversifying the country’s export product portfolio, the expanding economy and the business/investment opportunities in all key economic sectors, Japanese businesses/investors could explore the many opportunities presented by Sri Lanka. The growth and profits recorded by Japanese businesses already operating in the country could further encourage more Japanese businesses/investors to explore opportunities in Sri Lanka. Also, Sri Lanka’s strategic positioning in the Indian Ocean, the string trade ties with many foreign countries and the target of becoming a regional hub all indicate the increasing business potential in the country. Japanese businesses/investors could also look at expanding operations through local collaborations in Sri Lanka while also exploring business/investment opportunities in the country. The words of the Japanese Ambassador to Sri Lanka could also be looked at by other foreign businesses/investors to understand the increasing business potential in Sri Lanka and explore the emerging business/investment opportunities.
| Article Code : | VBS/AT/20250418/Z_6 |