Japan is keen to increase its trade and investments with Sri Lanka and strengthen the good relations that was built several decades ago, Japanese Ambassador to Sri Lanka, Kenichi Suganuma told a seminar on ‘Bilateral Trade Between Sri Lanka and Japan’ last week.
It was organized by the National Chamber of Commerce of Sri Lanka.
The ambassador said there are many Japanese companies that are interested in setting up operations and forming joint ventures with Sri Lankan companies. “Many Japanese companies have shown interest in coming to Sri Lanka.
Japan is looking at developing countries to promote bilateral trade and investment,” Suganuma said.
However, the Japanese delegation said the unstable policy direction in Sri Lanka towards trade and investment is discouraging Japanese investors to explore opportunities in Sri Lanka.
“Probably many companies are keen to invest in Sri Lanka but they see the policy direction in Sri Lanka is not very stable. Therefore many investors are taking a ‘wait and see’ approach to investing in Sri Lanka,” the ambassador said. According to statistics, around 60 Japanese enterprises operate in Sri Lanka under the BOI providing over 12,000 employment opportunities.
Besides a large number of small-scale Japanese enterprises are engaged in restaurants, apparel, tourism and travel sectors in Sri Lanka.
Noritake, a Japanese enterprise, produces ceramics for the local and overseas markets However, trade and investments between the two countries have been growing at a slow pace. Sri Lanka exported goods to the tune of USD 217,317,510 to Japan in 2015 while importing goods valued at USD 1,387,668,279 the same year. Sri Lanka exports tea, fish, rubber products, apparel and textiles and ceramics to Japan and imports motor vehicles, machinery, electronic goods, and audio/camera equipment, self-propelled bulldozers, iron or steel parts, and accessories of motor vehicles.
The Japanese ambassador also said the unfair duty structure for importation of vehicles from Japan to Sri Lanka is not conducive to boost bilateral trade.
“The same duty structure should apply to all exporting countries. Japanese car exports to Sri Lanka will increase depending on the trade policy,” the ambassador said. He said Japanese companies are facing difficulties due to cheap good produced by some countries in the region. The question is whether Sri Lanka could offer what Japan expects for goods.
“Sri Lanka should take advantage of the low labour cost compared to certain countries to enhance trade,” the ambassador said.
Gem and jewellery, tea, apparel, cosmetics, gloves of rubber , activated rubber, vegetable fats processed food , healthy foods. Manufacturing of electronic and electrical equipment., manufacturing of automobile spare parts/rubber based products, assembling plants for LED and energy saving lamps are some of the potential areas for trade and investment between the two countries . The lack of awareness between the two countries of the potential for trade and the tates of both countries have affected trade and investment growth between Japan and Sri Lanka.
“There is very little opportunity to learn about the Sri Lankan business environment in Japan.
There has been little Japanese investments in Sri Lanka since 2009,” Japan External Trade Organisation (JETRO) Resident Representative Kazuhiko Obama said.
“We need to increase the awareness of among both countries to develop trade. Websites news paper intervies and business seminars are conducted by JETRO to widen the knowledge about Sri Lanka among Japanese traders and investors,” Obama said. JETRO has been working on an IT development project in Sri Lanka with the support of Export Development Board since 2014 and it orgainsed a mission of Sri Lankan IT firms to participate in an exhibition in Japan last year. A delegation from the Japan Information Services Association visited Sri Lanka in 2015 and signed an MoU with Sri Lanka Association of Software and Service Companies .
Japan International Cooperation Agency JICA has been supporting Sri Lanka with technical cooperation since 1964. The Colombo Port expansion, parts of the Mahaweli Development project, Samanalaweva, Colombo Airport Aerobridges and Japanese aid institutional building projects such as the Sri Jayawardenapura Hospital, Peradeniya Teaching Hospital, Medical Research Institute, Institute of Computer Technology at the University of Colombo, and Rupavahini Corporation are some of the Japanese funded projects in Sri Lanka.