– Korean Deputy Foreign Minister Lee Sang-Hwa
The ambassador and Deputy Minister of Public Diplomacy of the Republic of Korea Lee Sang-hwa paid an official visit to Sri Lanka from February 20 to the 22nd. Other officials of the delegation included Expert Economist Dr. Song Kyungjin, Director for the Regional Strategy Division Lee Jung ho, First Secretary Ms. Jung Su Young and Second Secretary Ms. Baek Su Jin.
On February 21, the Ministry of Foreign Affairs of the Republic of Korea successfully hosted an expert seminar under the theme of ‘Korea’s Indo-Pacific Strategy and Its Partnership with Sri Lanka’ at the Cinnamon Grand Hotel in Colombo. The Ministry of Foreign Affairs of Korea selected Sri Lanka as the first country to host the overseas seminar on its recently unveiled Indo-Pacific strategy. This meaningful event brought together more than 150 people including high-level officials of the Ministry of Foreign Affairs of ROK and the Sri Lankan government. Among the key representatives of the stakeholders, the officials of the Ministry of Education, the National Institute of Education, academic members of the Global Korea Scholarship Alumni Association, KOICA Fellows in Sri Lanka and Korean language teachers were present to gain insights into the Indo-Pacific strategy of Korea. Especially, many young students from the Kelaniya University also attended the seminar to understand the vision of Korea’s Indo-Pacific Strategy.
Among the high-level dignitaries present, the ambassador and Deputy Minister of Public Diplomacy of the Republic of Korea Lee Sang-hwa, Korean ambassador to Sri Lanka Santhush Woonjin Jeong, Secretary to the Ministry of Education Nihal Ranasinghe, Secretary of the Ministry of Buddhasasana, Religious and Cultural Affairs Somaratne Vidanapathirana, Director-General of the National Institute of Education Dr. Sunil Jayantha Nawaratne, Additional Secretary Educational Quality Development & Education Reforms H.U. Premathilake and Additional Secretary Cultural Promotion T.N. Hettiarachchi were noteworthy.
Delivering the opening remarks at the seminar on ‘Indo-Pacific Strategy and Its Partnership with Sri Lanka,’ the Deputy Minister Lee Sang-hwa stated that Korea has recently unveiled the Indo-Pacific Strategy which is Korea’s first comprehensive regional strategy, under the vision of a Free, Peaceful, and Prosperous Indo-Pacific. To realise this vision, the Korean government has formulated a policy and an implementation plan aligned with the Indo-Pacific strategy for each sub-region, including North Pacific, Southeast Asia & ASEAN, South Asia, Oceania, and the African Coast of the Indian Ocean. The principles of cooperation for the Indo-Pacific strategy are based on Inclusiveness, Trust, and Reciprocity. For this purpose, the Korean government would like to attempt to build a regional order based on norms and rules, strengthen non-proliferation and counter-terrorism efforts, engage in contributive diplomacy through tailored development cooperation, etc. Especially in the region of South Asia, ‘Sri Lanka is a country with great potential,’ the Deputy Minister stated. ‘Korea supports the endeavours of the Sri Lankan government and its people to emerge from the current challenges as a strong and resilient economy. In the framework of Indo-Pacific, the Korean government will pursue reliable and mutually beneficial economic partnerships with countries in South Asia through strengthened economic and development cooperation in such areas as trade, investment and development assistance. The government of Korea has increased the ODA budget by 14% this year and Sri Lanka is one of the key development assistance recipients.’
The seminar featured a presentation by the Director for the Regional Strategy Division Jungho LEE on the Indo-Pacific strategy of ROK and the substantial cooperation Korea hopes to share with Sri Lanka through increased economic and development cooperation. He emphasized that the “strategy focuses on maximizing effects of development cooperation in areas where our strengths and partners’ needs coincide.” The Director for the Regional Strategy Division further agreed on the need for tailored cooperation in the areas of trade, investment and development assistance and discussed the way forward to promote mutual understanding and exchanges under the Indo-Pacific Strategy of Korea.
Economic Expert Dr. Song Kyungjin provided a comprehensive outline of the economic development experience of Korea. In 1962, the GDP per capita of Korea was just USD 106.2. In 2022, the GDP per capita has increased to USD 34,997. While the major export items in 1962 were limited to a few materials, such as, iron ore, tungsten, raw silk and squid, it has now diversified and expanded to export items such as semiconductors, automobiles, petrochemicals and shipbuilding. The transformation of the Korean economy was due to the structural and financial sector reforms, such as, effective regulation and supervision of financial institutions. Dr. Song further explained that the economy of ROK experienced major setbacks such as the Asian Financial Crisis in 1997-98. Significant structural and financial reforms such as the Financial Supervisory Service, the restructuring of large banks, capital account liberalization and the free-floating exchange system led to the recovery of the economy. As an outcome of such painful reforms, the Korean economy was better prepared to weather the 2008 Global Financial Crisis with strong economic fundamentals. She reiterated that the lessons from the two crises such as market-based exchange rate, public sector reform, fiscal consolidation, policy sequencing, political leadership and commitment can be used as references in the development of Sri Lanka. She emphasised that Korea is a bridge between developed and developing countries, and Korea hopes to strengthen more collaborations with Sri Lanka. Especially human resources development and management, education and training, skills development, infrastructure development and agricultural productivity, are prioritised as key areas of cooperation between Korea and Sri Lanka.
Korean ODA representatives, the Country Director of KOTRA Son Joo Hong and the Country Director of KOICA Ms. Kim Myung Jin also participated in the expert seminar to share first-hand experiences in the development of Sri Lanka.
The event also featured a traditional Kandyan dance performance and a dynamic Taekwondo performance that captured the attention of the audience. The seminar was conducive to building an informative dialogue on the Indo-pacific strategy of the Republic of Korea and the future-oriented cooperation between Korea and Sri Lanka. (Embassy of the Republic of Korea)
Sri Lanka’s foreign reserves up by USD 2billion over the past year – Acting Finance Minister
Acting Finance Minister Ranjith Siyambalapitiya during a press conference held today (21) at the Presidential Media Center, focusing on the theme of ‘Collective Path to a Stable Country’ said that over the past year, the government successfully increased the country’s foreign reserves from 1.8 billion dollars to 3.8 billion dollars.
He added that in August 2022, the exchange rate stood at Rs. 361 per dollar, but by August 2023, one dollar could be acquired for Rs. 321. This shift is not the result of artificial control but rather a reflection of the rupee’s value adjusting in response to supply and demand for the dollar, which holds significant economic importance.
The interest rate for deposits, previously at 14% in 2022, has been lowered to 11%, while the loan interest rate, previously at 15.5%, has been reduced to 12% this year. Notably, last year, the primary account deficit was Rs. -247 billion, but this year it has turned into a surplus of Rs. 27 billion. This marks the first surplus in the primary account balance in over 40 years.
Tourist arrivals, which numbered 496,430 in 2022, have surged to 904,318 during the first two quarters of this year. Equally impressive is the growth in tourism earnings, which rose from 832.6 million US dollars in 2022 to 1,304.5 million US dollars in the first two quarters of this year, reflecting a remarkable 56.7% increase compared to the previous year.
In the past year, the amount of money remitted by Sri Lankans living abroad to Sri Lanka has surged from 2,214.8 million US dollars to 3,862.7 million US dollars this year, marking a remarkable 74.4% increase according to data from the Ministry of Finance.
On August 1, 2022, the QR code system was introduced as a measure to manage petroleum demand due to foreign exchange shortages. This led to a significant disparity between normal demand and supply, resulting in a notable increase in diesel consumption by 28% and petrol consumption by 83% in June 2023, when the QR system was partially relaxed. However, as of September 1, the QR code system, which directly impacts economic growth, has been completely lifted.
Upon assuming office, President Ranil Wickremesinghe faced a daunting challenge of addressing a 14-hour power outage, which had a direct impact on the economy. Presently, the government ensures a continuous and stable electricity supply to the population.
As of August 23, 2023, there were 1467 imported goods banned due to foreign exchange shortages. Currently, the ban applies to only 279 items. Furthermore, the import of vehicles, which had been halted in 2020, now includes buses and trucks for public transport.
In April 2022, the country faced difficulties in meeting its debt obligations. However, the government has since secured the first installment under the International Monetary Fund’s Extended Credit Scheme, contributing to stabilizing the country’s economy compared to the previous year.
David Cameron to address Port City Colombo UAE Roadshow
Port City Colombo is set to launch a Roadshow in the UAE showcasing investment opportunities and incentives for global investors. This significant event marks the initiation of a key global marketing drive, inviting investors from across the world to explore the diverse investment prospects available at PCC.
Former UK Prime Minister David Cameron will address an exclusive, closed-door forum on the strengthening ties between the UAE, Indo-Pacific region and the role of Sri Lanka in this new trend gaining increased momentum. The discussion will showcase the UAE’s role as an international player that can concurrently engage with multiple partners, including in the Indo-Pacific region. Expected to represent more than 50 percent of the global Gross Domestic Product (GDP) by 2040, Asia is increasingly becoming the new economic global power centre of the 21st century. In this context, the UAE aims to strengthen its connections with the Indo-Pacific region and Sri Lanka will play a crucial role in this partnership with its trade and investment offerings particularly through the up-coming multi-billion dollar Port City Colombo development project.
Port City Colombo is a visionary FDI-funded mixed development project that aims to redefine Sri Lanka’s economic and social landscape. Built on reclaimed land, adjacent to the heart of Sri Lanka’s capital, Colombo, PCC will offer a cosmopolitan lifestyle, world-class infrastructure, and sustainable living. As a Special Economic Zone (SEZ), it also provides a range of incentives and benefits for businesses, making it an ideal destination for international businesses, hotel owners and operators to establish their presence in Sri Lanka. The SEZ’s independent governance framework, by way of the Colombo Port City Economic Commission (CPCEC), is also setting the stage for PCC to become one of the easiest places to do business in the region, further cementing its prospects as the Gateway to South Asia.
The Port City Colombo UAE Roadshow arrives on the heels of a significant milestone achieved by the Colombo Port City Economic Commission (CPCEC) recently gaining Cabinet approval for its Businesses of Strategic Importance (BSI) Guidelines, a move that underscores its commitment to transforming Port City Colombo into a globally competitive special economic zone.
Under the approved guidelines, primary and secondary businesses of strategic importance will receive a range of incentives, including exemptions from relevant enactments, favourable corporate tax rates, and enhanced capital allowances. These incentives aim to create a conducive environment for businesses to thrive within PCC, further enhancing its appeal to investors. Among these incentives are tax breaks and regulatory mechanisms, aimed at facilitating seamless business operations and ensuring a favourable investment environment for both local and international entrepreneurs.
The CPCEC has worked closely with international advisory firms to benchmark its efforts, ensuring that Port City Colombo’s regulatory framework aligns with global standards. The result is a transparent and business-friendly environment that caters to the unique needs of primary and secondary businesses of strategic importance.
Accordingly, Port City Colombo presents a diverse range of business and investment opportunities that cater to various interests and sectors. Prospective investors can enter into sectors such as real estate development, regional trading and hub operations, luxurious residential and retail spaces, and more. This broad spectrum ensures that investors of all backgrounds can find their niche within PCC, fostering a thriving and diverse economic ecosystem.
Despite love and hate, National Carrier is a must-have for its economy: SriLankan CEO
By Sanath Nanayakkare
National airlines are usually the most loved and the most criticised operation in many countries and Sri Lanka is a clear example for this, Richard Nuttall, the Chief Executive Officer at Sri Lankan Airlines said at the Aviation College in Katunayake recently.
He said so while delivering the keynote speech at a workshop held for a group of media personnel who write, broadcast and telecast aviation news for their respective media organisations.
The two-day media workshop no doubt helped create more understanding of the aviation industry and why it’s important, and even more so how the National Carrier best serves its passengers and contributes to the economy despite having to deal with ill-considered and uninformed comments made in the main stream media and social media platforms.
“If you do a survey, you will find that the most favorite airline is the most hated airline at the same time, which is true for Sri Lanka too. Sri Lankans are in a state of having two opposing feelings at the same about the National Carrier, or are uncertain about how they should feel about it,” he said.
Further speaking SriLankan CEO said,” Most often what is get reported is about ‘I had to wait an hour at the airport, or a flight turned back due to technical fault, but the reality is we are carrying 5 million passengers a year, and when you have 5 million passengers a year, it means 1,500 passengers through 15 desks in an hour. Such trivial things happen everywhere in the world and there are lot worse places in terms of such occurrences. Everywhere you would see a flight turning back or something happens on a flight and the airline says,” we don’t continue and we need to go back to base’. If you Google and search, you will find that it happens to any carrier in the world. So, what we want is to let the conversation move beyond instead of talking about small things; how we handle 5 million passengers a year on thousands of flights to many destinations. For example, if a Hajj pilgrim at the end of his life unfortunately passes away on a flight, it is not news. It is a general incident. This is why we want to lift the conversation and the understanding to a different level and see whether we could get the people who are really interested in aviation to see how the industry works so that we can have more informed views about the big picture of the industry. Aviation is a very complex business and it requires a lot of commitment and many, many skills. Sri Lankan Airlines has many personnel with a huge amount of training. For example, it takes years of hard work to become a pilot. It takes years to become an engineer. Like everybody else, we have IT experts, accounting professionals etc. We have about 100 IT systems integrated into our operational system. We have personnel who do revenue management, who set prices and plan where the aircrafts go. In addition, we have Catering, Ground Services and we provide maintenance for other carriers. Some of them stay with SriLankan for longer periods and others choose to work for other airlines. So, this is a huge, complex industry and SriLankan Airlines is a big company. We are highly regulated and we need to get permission from various governments where we arrive. And we need to operate in compliance with the safety protocols of not only the Civil Aviation Authority in Sri Lanka but also of civil aviation authorities from across the world. Everything we do in flying and on the ground is regulated and if we don’t follow these procedures, we might not be allowed to fly to Europe tomorrow. So it is more important to have an understanding of how SriLankan Airlines maintain these highest standards rather than anything else.”
“Aviation is probably worth about 5-6% of GDP for most countries and if we didn’t have aviation, that contribution wouldn’t be there. We employ 6,000 people. Around the ecosystem, there are many other people employed in civil aviation, in airports, as travel agents, as cargo agents etc. Hotels and tourism industry which directly and indirectly supports 10% of the population wouldn’t be able to operate if we didn’t engage in connectivity. If you look around the world at strongest economies, they all have a strong airline. What’s the hub in the Middle East? It’s Dubai and it grew on the back of Emirates. Etihad, Qatar, Saudi Arabia flights go there and their economy is driven hand in hand with Emirates. The financial centres of the world such as London, Frankfurt, Singapore, Hong Kong, and New York, all have major airlines based there with flights going in all directions. All regional airline offices in Africa are based in Nairobi. Kenya Airways is based in Nairobi. So aviation and airlines are really, really critical to any given country’s economy, businesses and tourism. This is why countries need to have strong airlines and all the reasons for having a strong national carrier for those important networks to work seamlessly. Today SriLankan flies to 35 destinations and as a ‘oneworld member’, we connect to hundreds of destinations across the world. How many people in this country have connections with Australia? If we don’t have an airline based here, nobody would fly nonstop to Australia. The reason for that is those flights are filled with 40% of the passengers coming from India. If we didn’t fly to Australia and didn’t fly to South East Asia maybe 50% of the flights that we fly on Indian routes won’t be there. There are so many people who say that if SriLankan is not there, somebody else will carry that route. That’s not correct. If you get somebody else to fly on maybe 30% of the routes, you just have to go via somewhere else and you will end up paying a lot more airfare. So if you want to build an aviation hub here, grow your tourism, scale up your industries, you have to have a strong national carrier.”
Sri Lanka’s foreign reserves up by USD 2billion over the past year – Acting Finance Minister
President Wickremesinghe meets US President Joe Biden in New York
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