Economic & Market Bulletin
[December 12, 2005]

	Today's Stories
	FEATURE: Economic & Market Bulletin

A weekly publication of the Economic Affairs Division of the Ministry of Foreign Affairs
Volume 2:Issue 39 
9^th December, 2005 

Tourist arrivals to Sri Lanka increased 

•     Tourist arrivals to Sri Lanka increased in the last ten months and the highest arrivals were from the South Asian region. The total arrivals up to October 30 were 449,680. That was an increase of 14,612 in contrast to the corresponding period last year. 

•     The South Asian arrivals stood at 125,02 while in the previous year it was 103,520, which a 21.2% increase. Indian arrivals in 2004 were 81,964 and in 2005 increased to 92,163 an increase of 12.4%.  The Maldivian tourists, which rose from 11,077 to 20,162, which is an increase of 82%. 

•      Western European arrivals were low with a total 184,983 tourists, which is contrasts to 222,136 arrivals in the first 9 months of 2004. Eastern Europe arrivals in 2004 were 10,154 as against 7,134 up to last month, which is a decrease of 29.7%. 

Trade volumes to China to reach US$ 1 billion

•     The Sri Lanka China Business Cooperation Council (SLCBCC) reports that, Trade and Economic relations between Sri Lanka and China has grown up by over 45% in the first 9 months in 2005. The total volume of bilateral trade was 720 million US $.

•      From January to September 2005,Chinas GDP achieved 1,370 billion US$, with an average annual growth rate of 9.4%. The total volume of China’s foreign trade from January to October 2005 was 1,147 billion US$ which is a 24% increase over the same period last year.

•      China’s export and import were 614 billion US dollar and 534 billion US dollars respectively.

•      According to the SLEBCC officials, participation of Sri Lankans in trade fairs such as the Canton Fair has helped to increase trade while the direct Air links between Colombo and Beijing also would enable more businessmen from the two countries to meet up.

New trade relations between India & Sri Lanka

•      Sri Lanka and India is currently exploring the possibilities of broadening the two-way trade and commercial ties between the two countries by reviewing the bilateral protection agreement and setting up a Joint Investment Promotion Committee (JIPC).

•      According to the Board of Investment (BOI) officials, both countries discussed to expand the list of goods being traded with confessional tariff under proposed CEPA (Comprehensive Economic Partnership Agreement). The review of the negative lists and ROO (Rules of Origin) under FTA (Free Trade Agreement), talks were centred on enlarged customs cooperation, liberalization of service sector, Mutual Recognition Agreements (MRAs) on product standards, professional associations and a framework agreement on financial services.

•     The Indo Lanka FTA has worked to the advantage of both the countries with both parties having identified 5,224 merchandise items for preferential market access between them. While 4,233 items from Sri Lanka had access to India with nil customs duty, India could export 1,255 items with zero tariffs from the importer.

A vast potential for Ceylon Tea and Gems & Jewellery in Philippines

•      Embassy of Sri Lanka in Manila reports that, there is a vast potential exist in the Philippines for Ceylon Tea and Gems & Jewellery. This was obvious at an International Bazaar held in last month at the World Trade Centre in Pasay City, Manila. 

•     The Embassy together with the leading Gem and Jewellery producers of Sri Lanka participated at the event, which was organized by International Bazaar Foundation with the patronage of the Department of Foreign Affairs, Manila.

•     The Sri Lankan entrepreneurs have hold discussions with their counterparts in the Philippines to harness the business potential between two countries, at the end of the Bazaar.  

The development of Small and Medium Enterprises in Egypt 

•     The development of Small and Medium Enterprises (SMEs) in Egypt is considered to be one of the agendas for Egypt. Since Sri Lanka is keenly promoting SMEs, The Embassy of Sri Lanka in Egypt reports, some of the actions taken by the Egyptian Government. 

•      According to the Egyptian Finance Ministry sources, one of the major targets of the agenda is to transform the informal sector to become formal and that requires a more generic approach that deals with the constraints hindering enterprises to being formal.  Small and Medium Enterprises from 99% from all enterprises and the majority of the informal sector, targeting those enterprises and creating an enabling environment for their survival is one of the Ministry’s goal.

•      To reach this goal, the Ministry has an SME development unit associated with the Minister’s Office, and the project that was done with the Canadian International Development Agency (CIDA) to assist the GOE in setting a policy process that would ensure formulation of policies targeting the SME constraints. 

•      Potentially, the most important constraint facing SME is marketing.  Government and Governmental procurement can constitute an important market for SMEs.  In most EU countries, for example public procurement constitutes 10 % - 15% of the GDP.  20% of Latin America’s GDP is spent on procurement. 

•      However, SMEs are generally under performing when it comes to exporting.  The vast majority of SMEs did not even attempt to export.  There was a consensus on what constitute the main obstacles hindering exporting.  Those were:

* Inaccessibility of export channels

* Lack of awareness

* High Input Prices

* Scarcity and difficulty of finance 

     To enhance the involvement of SMEs, Egypt currently has undertaken so many national conferences, regional workshops and study tours.