January 22, 2019

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    Strategic method essential to reach Mekong sub region market

    September 08, 2016

    Sixty per cent of the world´s people live in Asia, but, economically, our people deliver only thirty per cent of the world´s gross domestic product. This imbalance is slowly tilting in Asia´s favour with countries like China, India, Japan, South Korea, Thailand, Indonesia, Malaysia, and Vietnam aggressively pursuing and winning the global markets. Global manufacturers and primary producers are also moving to Asia in large numbers, consolidating the economic gains being made by the vibrant nations of Asia.


    Minister of Primary Industries Daya Gamage addressing the Sri Lanka-Greater Mekong Sub Region (GMS) Business Council said that out of this large landmass and new economic powerhouse, the Greater Mekong Sub region (GMS) covers 2.6 million square kilometres and boasts of a combined population of around 326 million.


    I believe that in 1992, with assistance from ADB, six countries, Cambodia, the People's Republic of China (PRC, specifically Yunnan Province and Guangxi Zhuang Autonomous Region), Lao People's Democratic Republic (Lao PDR), Myanmar, Thailand, and Viet Nam, entered into a program of sub regional economic cooperation.


    He said that the GMS business council does not include the People´s Republic of China in their list of GMS member countries, so I have also not included China when looking at the trade data between Sri Lanka and the GMS.


    Last year, we imported a combined total of US$ 764 million from Thailand, Vietnam, Laos, Myanmar, and Cambodia while exporting US$121 million to these GMS countries. While this amounts to only four per cent of our total global imports and one percept of our total exports to the world, the trade balance is very badly skewed in favour of the GMS countries.


    Let’s take Thailand as an example. Thailand is Sri Lanka’s second largest export destination in the GMS region, with Vietnam taking the top place. Although cumulative trade between Sri Lanka and Thailand was around USD 534 million, exports from Sri Lanka to Thailand were valued at only USD 37 million in 2015, a significant drop from the US$57 million of exports to Thailand in 2014. This is not a healthy balance.


    This imbalance is also reflected in the tourism sector – a sector that is now being increasingly recognised as a “service” export. From January to July last year, only 5,538 tourists arrived from Thailand to Sri Lanka. On the other hand, over 27,600 Sri Lankans visited Thailand during the same period.


    Moreover, the amount of Sri Lankans visiting Thailand is growing. There was an increase of 13% Sri Lankan tourists to Thailand in that first six months, compared to the same period in 2014. However, the arrivals from Thailand to Sri Lanka grew by only 3% during the same period.


    Although there has been a steady increase in the bilateral trade between Sri Lanka and Thailand since the late nineties, that trend has declined last year.


    Thailand’s main exports to Sri Lanka include used cars, sugar, textiles, dry fish, cement, chemical products and automobile parts, while Sri Lankan exports include gems and jewelleries, tea, spices, fibre and metal products.


    Sri Lanka’s exports to Thailand declined because the value of our largest export to Thailand, gems and jewellery, declined significantly in 2014 and continues to decline.


    Overall, while we are importing more from GMS countries every year, we are exporting less every year too, said the minister.

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