Change in political landscape will boost trade - Swiss envoy

by Lalin Fernandopulle

The change in the political landscape in Sri Lanka this year is a good opportunity to strengthen trade and bilateral relations between Sri Lanka and Switzerland, Swiss Ambassador Heinz Walker Nederkoorn told a seminar on 'Bilateral Trade between Sri Lanka and Switzerland' organised by the National Chamber of Commerce last week.

He said despite healthy relations, trade between the two countries has been low due to the protracted conflict and the past political instability in Sri Lanka. The democratic revolution which took place this year will help boost economic growth. Trade between Sri Lanka and Switzerland has been around US$ 300 million.

Sri Lanka's exports to Switzerland was around US$ 130 million and imports amounted to around US$ 130 million last year. Bilateral trade between Sri Lanka and Switzerland surpassed the US$325 million mark in 2012 while Sri Lanka's exports to Switzerland recorded the highest level of US$ 91.75 million. Many Swiss companies are present in Sri Lanka with around 5,000 Swiss employees.

Swiss foreign direct investment in Sri Lanka is around US$ 550 million across 25 companies. Sri Lanka and Switzerland signed an agreement in 1981 to promote the protection of investments and an agreement to avoid double taxation in 1983.

Sri Lanka imports electrical machines, chemicals and pharmaceuticals, watches, clocks and jewellery, textiles and garments, base metal, leather, plastics and agricultural produce from Switzerland and exports precious stones, textiles and garments, agricultural and animal produce, machinery and chemicals.

Nederkoorn said there is enormous potential for growth in trade and investment between Sri Lanka and Switzerland. However, Sri Lanka needs to focus on introducing economic reforms to attract foreign investors. Swiss companies did not come to Sri Lanka due to the conflict but today they would be keen to explore opportunities due to the peaceful situation and the focus on strengthening democracy. The distance was a barrier to boost trade in the past. However, it is not a primary reason today. Switzerland does most of its trade with its European neighbours. The EU is the largest trading partner of Switzerland which recorded a GDP of US$ 651 billion in 2014.

The per capita GDP of Switzerland is among the highest in the world. With a highly developed service sector, infrastructure and efficient capital market, Switzerland is a peaceful and prosperous country. Sri Lanka is a beneficiary of GSP plus concessions from Switzerland.

Around 50,000 Sri Lankans residing in Switzerland are a major asset to boost bilateral relations between Sri Lanka and Switzerland. Sri Lankans are well integrated and they are the highest non-European foreign residents in Switzerland, the Swiss Ambassador said. Switzerland is a confederation with decentralization of power and solves problems at the lowest level.

Nederkoorn said the word confederation has a negative sense in Sri Lanka.

The Head of the Federal Department of Foreign Affairs of Switzerland, Didier Burkhalter who met President Maithripala Sirisena early this year, said Switzerland is willing to open a new chapter in bilateral relations with Sri Lanka and extends its full support for national reconciliation. He said the Swiss government is happy with the measures taken by the Sri Lankan government to promote reconciliation and strengthen democracy.