05th February 2012, english.nuqudy.com
The Dikkowita fishery in Sri Lanka has recently announced that a Saudi Arabian company will be investing around $300 million into the Ceylon Fisheries Corporation (CFC), which is organizing a project to streamline the fish market on behalf of the Sri Lankan Department of Fisheries.
The Saudi Arabian investment will make it possible for the CFC to buy fish from fishermen and sell them directly, eliminating the need for a middleman. According to Dr. Rajitha Senaratne, Minister of Fisheries and Aquatic Resources Development, the investment means the CFC could “. . . directly intervene in the market. We will be able to set up a good network to increase production and sales throughout the country. We can spread our wings through the CFC and the Cooperative City. These facilities will enable us to decide the price of fish.”
While a memorandum of understanding has not yet been signed, a company spokesperson will be visiting Sri Lanka this week to finalize the investment arrangements.
Saudi Arabian investors have a history of involving themselves in fishing operations. For example in 2008, the Saudi-based National Prawn Company invested $300 million in beginning large-scale fish production in the Gulf. Additionally, Saudi Arabia, with around 7,570 km of coastline, is in a prime geographical location to be involved in the fishing industry.
Saudi Arabia has produced approximately 40,000 tons of fish annually since 1985 through a combination of fish farming and artisanal, or low-tech, fishing. Although production remains fairly constant, the location has fluctuated between the Red Sea and the Arab Gulf. The number of fishing vessels and fishermen in Saudi Arabia has grown nearly five-fold in the past 20 years.
Sri Lanka’s economy has flourished in recent years and has been hailed as the most liberalized economy in South Asia. The GDP grew 8.3% in 2011 according to the Central Bank of Sri Lanka, and the IMF estimates that the economy is worth over $56 billion. Transparent investment laws have attracted an increase in foreign direct investment. Human capital is also an asset, as Sri Lanka has a 94.2% literacy rate, and the workforce is highly trained in high tech production and services.
As for the fishing industry, the government expects 9.8% growth in 2012 due to auspicious weather conditions and an enhancement in marketing and infrastructure facilities. Fishing is an important part of Sri Lanka’s economy, particularly exports, and tensions have been rising between Sri Lankan and Indian fisherman encroaching on each other’s waters.