‘Hub diplomacy’ with an FTA is a win-win situation for both Sri Lanka and Singapore

Singapore’s Foreign Affairs Minister Dr. Vivian Balakrishnan says the proposed Free Trade Agreement (FTA) between Singapore and Sri Lanka can serve as Sri Lanka’s gateway in Southeast Asia and Singapore’s gateway to Indian Ocean.

Singapore’s Foreign Minister says both countries are hubs for respective regions and connecting the two hubs in trade will be a win-win situation for both countries.

Minister Balakrishnan, who is on an official state visit to Colombo, addressing a media conference after a meeting with his Sri Lankan counterpart Minister Ravi Karunanayake today at the Foreign Ministry in Colombo said incumbent on both governments is the need to create a conducive climate for businesses.

“One component of this is the conclusion of our negotiations for a Free Trade Agreement between Sri Lanka and Singapore. We’re both committed to try to complete this before the end of the year. It will be a modern, comprehensive, high quality, ambitious Free Trade Agreement. It will demonstrate to the world that both of us are open for business and we encourage all investments,” Minister Balakrishnan said.

Speaking on the suggestion by Minister Karunanayake that Sri Lanka should pursue the bigger concept of the ‘hub diplomacy’ to open Sri Lanka to the rest of the world, the visiting Minister said Singapore “wholeheartedly” agrees with Sri Lanka.

“Sri Lanka is a hub for transhipment and economic ties across the Indian Ocean. Singapore is a hub in Southeast Asia. We are complementary. We are not competitive. The bigger the pipeline we build to connect these two hubs, the greater the opportunities will be for our respective regions. So we believe that with the Free Trade Agreement, Singapore can serve as your gateway in Southeast Asia. Sri Lanka will be our gateway in the Indian Ocean. And this will be an example of a win-win outcome for both sides,” he said.

Minister Balakrishnan said he is encouraged to see the rapid developments in Colombo and to see how the government is capitalising on this by pushing reforms and greater economic engagement with the rest of the world.

He pointed out that because of these developments, there is a surge of interest on the part of Singapore companies in Sri Lanka because they can see for themselves the growth potential in the island.

The Minister revealed that there are currently more than 350 Singapore companies in Sri Lanka engaged in activities across a wide range of sectors which include food and beverage, manufacturing, IT, cybersecurity and power and expressed hope to see more such business-to-business collaborations.

Minister Balakrishnan said Singapore is happy to play a modest role supporting the Sri Lankan government’s development and reform agenda.

“We’ve had a very good and frank discussion just now. I think it shows the level of trust, comfort and goodwill between the two governments. We’ve also shared some of your ideas on civil service training. I want to emphasise that this is an area which we want to encourage more of and not just to exchange our ideas on a technical level but to build and deepen relationships amongst our civil servants to build that reservoir of trust and goodwill, which we believe will put our respective civil services in very good stead to generate further ideas and create more opportunities for collaboration, which will benefit our citizens in the long run,” the visiting Minister said.

Minister Balakrishnan said he will be going to Jaffna on Wednesday to participate at the handover ceremony for books donated to the Jaffna Public Library and to launch an orthopedic development program in the University of Jaffna.

He said the event is of special significance to him since as a surgeon before his political life, he benefitted from the training, motivation and the inspiration of professors who originated from Sri Lanka.

“And for us now to have an opportunity to go there and make a token contribution is an echo of our gratitude and also a reminder of the deep and longstanding relationship between our two nations,” Minister Balakrishnan said.