Sri Lanka and the Czech Republic signed a landmark agreement on Mutual Cooperation aiming to formulate and implement a framework of economic engagement through the establishment of a joint committee to promote bilateral trade, investment and economic relations.
The Minister of Development Strategies & International Trade Malik Samarawickrama plans to formulate the action framework under this Agreement. The Ministry highlighted that special emphasis will be given to encourage investment cooperation in economic sectors through non-traditional financial instruments. This ministerial joint committee will be co-chaired by the Minister of International Trade, Sujeewa Senasinghe.
The Minister of Development Strategies & International Trade signed the Agreement between the Ministry of Development Strategies & International Trade of Sri Lanka and the Ministry of Industry and Trade of the Czech Republic on Mutual Cooperation on 7 February 2018. The Ambassador Extraordinary and Plenipotentiary of the Czech Republic in India, Accredited to Sri Lanka, Milan Hovorka, has been authorized to sign on behalf of the Minister of Industry and Trade of the Czech Republic.
Sri Lanka's exports to the Czech Republic amounted to around US$ 55 million with positive trade balance in 2017. There is a continuous growth in exports since the last decade from Sri Lanka to the Czech Republic. Sri Lanka's exports to the Czech Republic have been mainly confined to the sectors of rubber and rubber-based products, tea, coconut and coconut-based products and apparel.
Being a tea exporting country, Sri Lanka has potential to widen the exports of its value-added tea to the Czech Republic. Since the Czech Republic has a developed automobile industry, Sri Lanka can explore market opportunities in the Czech Republic for the rubber finished products like tyres and other automobile parts. Sri Lanka has the potential to export to the Czech Republic in other sectors like electronic and electrical, insulated wires, chemical products, essential oil, processed foods, edible fruits and vegetables, tobacco, ceramic products and seafood.
To strengthen cooperation in the economic sphere for mutual benefit, both parties welcomed the signing of the Agreement on Mutual Cooperation.
This Agreement will consist of areas including the enhancement of bilateral trade and economic relations; facilitating the growth of bilateral investment and the identification of economic and investment opportunities in both countries; the promotion of closer trade and industrial cooperation; and facilitate networking activities between entrepreneurial entities of both countries.
Mutual cooperation between the two countries will enhance bilateral trade and economic cooperation, as well as create opportunities for investment flows through exchange of information on the laws and regulations governing foreign investments.
Both countries have agreed to expand friendly relations, ranging from investment to deeper bilateral exchanges and cooperation on a platform that allows both countries to gain new benefits from new forms of dynamisms. Recognizing the Czech Republic as a fast-growing economy in the European Union, its potential to become an important export destination, and the prospective benefits of an effective cooperation on investment towards our industrial development, as specifically highlighted by the observations of the President, the Cabinet approved the signing of this Agreement in 2017.
The Czech Republic, in Central Europe, is a country that is known as the knowledge and technological hub in the Europe, with a robust democratic tradition and a rich cultural heritage. It emerged from over 40 years of communist rule in 1990, and was the first former Eastern Bloc state to acquire the status of a developed economy. It joined the European Union in 2004.
The Czech economy continues to grow steadily. GDP growth is 4.3 in 2017, owing to buoyant investment and private consumption. The labour market is nearing full employment and inflation is projected to remain close to 2%.
The Czech Republic is one of the most stable economies in Central Europe, with a population of 10.6 million with Per Capita GDP of US$ 34,200 Purchasing Power Parity (PPP) in 2016. It has a very prosperous market economy in the region with a sound industry and manufacturing base accounting to around 38% of its GDP. The Czech Republic's economy is very open to the outside world, as evident by the fact that its trade accounted for 153% of GDP in 2016. The country is a trading partner with many leading economies in the world.
The rapid transformation undergone by the Czech Republic in terms of institutional and other policy areas increases the potential for Sri Lanka to benefit from mutual cooperation between Governments, businesses and institutions of the two countries.