UAE in clarion call for Sri Lanka Investment Pact as FDI and trade hit historic high

Thursday, 5 July 2018 00:27 - - {{hitsCtrl.values.hits}}

Industry and Commerce Minister Rishad Bathiudeen meets United Arab Emirates’ Ambassador Extraordinary and Plenipotentiary to Sri Lanka Ahmad Ali Al Mualla in Colombo on 4 July

As its bilateral trade and investments with Sri Lanka increased to unprecedented levels, the second largest Arabian economy in the Gulf issued a clarion call for an Investment Protection Agreement (IPA) with Sri Lanka on 4 July.

“We are an open country. We receive anyone,” said United Arab Emirates’ Ambassador Extraordinary and Plenipotentiary to Sri Lanka, Ahmad Ali Al Mualla, on 4 July. UAE Ambassador Al Mualla was on his maiden courtesy call on Industry and Commerce Minister Rishad Bathiudeen on 4 July in Colombo.

According to the Department of Commerce, Sri Lanka–UAE bilateral trade surged to a historic and unprecedented $1.83 billion in 2017. This is a huge YoY increase in trade from previous year – a 37% surge from 2016’s $1.34 billion.

“Sri Lanka-UAE relations are cordial and historic. Trade and investments are key pillars of these ongoing relations. I am pleased to observe that our bilateral trade levels are now at a historic high,” said Ambassador Al Mualla, adding: “Still, we wish to call for more exports from Sri Lanka. We are keen to further develop our relations. We are a leading Arabian investor in Sri Lanka. We would like to partner with Sri Lanka in trade and in investment projects in tourism sectors. We are very keen on the completion of Investment Protection Agreement (IPA) with Sri Lanka at the earliest if possible. We are an open country. We receive anyone.”

In recent years, leading UAE investors have been increasingly eyeing Sri Lanka, and as a result UAE has become the largest investor in Sri Lanka from the Gulf Cooperation Council (GCC) countries, with projects in Sri Lanka exceeding $405 million (2012-2017 totals). Among the multitude of UAE FDIs, well-known projects in Sri Lanka include: Galadari (hotels), Emirates Group (travel), Al Futtaim (automotive, with AMW), Etisalat (mobile telecom), LULU Group (food processing) and Al Ghurair (milling).

Minister Bathiudeen welcomed Ambassador Al Mualla’s interest towards enhanced investment and trade relations with Sri Lanka. “At present, both Governments are exchanging notes on signing the Promotion and Protection of Investment Agreement, and we are likely to sign once both parties agree on final terms at an advanced negotiation stage,” apprised Minister Bathiudeen, continuing: “I am also pleased by the strong growth in trade between both countries. We thank the businesses at both ends for this development. UAE imports to Sri Lanka are 82% of our trade, but only 18% of our exports are going to UAE. Therefore we would like to expand our exports basket. I am pleased that you express interest to buy more products from Sri Lanka.”

82% of 2017’s total trade were imports from UAE to Sri Lanka at $1.5 billion. Among the major imports to Sri Lanka were petroleum products (70% of total imports) - petroleum oils, fuel oil, petrol, kerosene jet fuels, bitumen - and gold (16% of total). Sri Lanka’s leading exports to UAE in 2017 were tea (28% of total exports), apparel (18%), fuel oil (15.4%) and beverages such as vinegar. The UAE is the second biggest economy in the Arab world after Saudi Arabia, with a GDP of $377 billion.