Pakistan to Extend $250mn Export Credit Line to Sri Lanka. Pakistan-Sri Lanka Trade to Reach $0.5bn in Five Years

30th November 2010, www.dailynews.lk, By Anjana Samarasinghe and Charumini de Silva

The Trade between Sri Lanka and Pakistan is to reach US $ 0.5 billion within the next five years. Pakistan President Asif Ali Zardari addressing the Sri Lanka - Pakistan Business Forum 2010 yesterday said the two countries have had a good relationship as good friends and partners in the region.

“With the restoration of peace; the sky is the limit for Sri Lanka. This is a unique situation for Sri Lanka to recover. Sri Lanka will recover gradually and Pakistan will sincerely assist Sri Lanka,” he said.

He also called for a barter trade with Sri Lanka rather than depending on dollar-denominated trade.

There should be incentives for foreign investors that make them keep their profits here in Sri Lanka rather than taking out from the country. President also proposed that there should be discussions with high level financial teams from both countries in formulating strategies to support each other. Sri Lanka needs to develop many parts of the country and Pakistan is ready to assist in improving infrastructure of the country. Pakistani companies should visit Sri Lanka to seek investment opportunities and invest, he said.

Industry and Commerce Minister, Rishad Bathiudeen said the bilateral trade between the two countries has improved remarkably.

The total turnover of bilateral trade between Sri Lanka and Pakistan in 2005 recorded US $ 150 million, which grew up to US $ 252 million in 2009. This is a great indication of the strong trade between the two countries.

“It is time that Sri Lanka and Pakistan should further strengthen our bilateral trade agreements while increasing the volumes of trade,” he said.

Sri Lanka recorded an eight percent growth during the first six months of this year, while becoming one of the best performing capital markets in the world. The macro economic fundamentals are stronger and stabilized. The industries, trade and commerce are taking place in a rapid growth; with the investor friendly business environment the country offers great access to the market as well.

The trade ties between the two countries should be enhanced and promoted to have a constant impetus. There are immense potential opportunities in tourism, textile, IT, agriculture, fisheries, telecommunication, leather products, infrastructure, and sports products for the Pakistan investors to venture into. Sri Lanka is one of the most preferred countries for investments especially in the areas of garments, packaging, IT, telecommunication and rubber.

Sri Lankan investors have many opportunities in the power, gas and mining in Pakistan and Pakistan will offer similar incentives to those Sri Lanka offers for these investors Pakistan State Minister and Board of Investment Chairman Saleem Mandviwala said at the Business Forum.

He said that Pakistan will also extend an US $ 250 million export credit line to Sri Lanka to facilitate trade between the two countries.

“We will also bring down more projects to Sri Lanka,” he said.

Air links between two countries will be further strengthened with direct flights and visa procedures will be relaxed to have more access to Pakistan and facilitate more trade and investment among two countries, he said.

“We invite the Sri Lankan business community to explore the business opportunities available in Pakistan,” he said.

Pakistan is the second largest trading partner of Sri Lanka in the South Asian region and the Pakistan, Sri Lanka FTA covers over 4,000 products.