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Sri Lanka’s global trade outreach breaks new ground in a key Caspian strategic gateway market which is projected to be the fastest developing economy in 2030. And Sri Lanka is also paving the way for the world’s first oil country to join the APTA (formerly the Bangkok Agreement) trade bloc.
“Azerbaijan is almost a new and a promising market for Sri Lanka. We are now planning to send a trade and business delegation to Baku as part of the bilateral trade renewal,” stated Minister of Industry and Commerce Bathiudeen on 08 May.
Minister Bathiudeen was addressing the Minister of Foreign Affairs of the Republic of Azerbaijan Elmar Maharram Oglu Mammadyarov at the Ministry of Industry and Commerce on 09 May. Elmar was in Colombo, leading a six member delegation and this is the first time in recent history that an official Azeri delegation is directly exploring trade and business opportunities in Colombo.
Azerbaijan, the one-time Russian Federation economy and also where the world’s first oil-well was dug in 1847 reported strong 11% GDP growth (non-oil) in 2012 and is also projected to lead the list of fastest growing developing countries by 2030. It is rated by Standard & Poor at BBB.
“Sri Lanka’s GDP growth rate and stability are encouraging factors for Azerbaijani investors” said Mammadyarov and added: “We are also looking to start talks with Sri Lanka on a double taxation avoidance agreement. There is a need for better air-links between both countries too.”
According to the BOI, currently Sri Lanka has agreements with 38 countries on Double Taxation Avoidance. The BOI also added that there are no significant Azeri investments in Sri Lanka at present. Mammadyarov also stated: “We are a tea drinking country and we love Pure Ceylon Tea.”
98% of Sri Lanka’s exports to Azerbaijan consist of Pure Ceylon Tea shipments and the rest (2%) is claimed by tyre, coir etc.
Mammadyarov thereafter offered: “We invite Sri Lanka to make use of our SOCAR trading refinery in Singapore. It can process up to 50000 barrels per day and it’s a win-win for both countries.”
SOCAR Trading is the international marketing and development arm of SOCAR, the State Oil Company of Azerbaijan. It has many offices worldwide, including Singapore. Azerbaijan’s world reputed oil industry was kick-started in modern times by no less than Alfred Nobel (the Nobel Prize creator) in 1901. Presently, Azerbaijani-made Azeri BTC (Sulphur at 14%) and Azeri Light (Sulphur at 14%) are well known premium ‘low sulphur crude oils’ in high demand around the world.
Its historic oil legacy has given the country an ever developing domestic FMCG market, which in turn, holds strong export promise for Sri Lanka. Azerbaijan is also considered to be a strategic geographic market linking Asia and Europe. According to the Department of Commerce, bilateral trade between Sri Lanka and Azerbaijan has been growing substantially since 2007.
The total trade turnover between the two countries, which stood at US$ 5.88 million in 2007, reached a peak level of US$ 46.23 million in 2012 recording an impressive growth of 686%. The balance of trade has continuously been in favour of Sri Lanka for the last few years.
Minister Bathiudeen, addressing Mammadyarov, said: “Despite notable growth in rate of trade, we believe that the overall bilateral trade value is still low and therefore there appears to be unrealised potential to expand from both sides.”
He also added: “Azerbaijan is an almost a new and a promising market for Sri Lanka. We are planning to send a strong trade and business delegation soon to Baku as part of the latest bilateral trade renewal. More importantly, I am pleased to inform your Excellency that our government is taking the initiative to propose Azerbaijan as a new member for APTA trade bloc. Sri Lanka is an original member of APTA.”
The Asia Pacific Trade Agreement (APTA-formerly the Bangkok Agreement) of which Sri Lanka is an original member since 1975, consists of Bangladesh, China, India, Republic of Korea, Laotian People’s Democratic Republic and Sri Lanka and captures a promising global market of 40% of the world’s population. Mongolia is currently in talks for accession to APTA.
“We are most honoured by your excellent initiative on APTA” said Mammadyarov adding: “We shall be sending a delegation for the forthcoming Commonwealth Forum. It will include members from the Azerbaijani Ministry of Economic Development as well.”
