Recently, Sri Lankan President Maithripala Sirisena visited Bangladesh to further strengthen the bilateral ties between the two nations which values at $142 mn and has potential to be boosted. For this purpose, there must be mutual understanding economically and politically between the two countries, in addition to the free trade agreement (FTA), for which two high commissioners had discussions a few months ago. Bangladesh exports apparel to the global market but has not been able to secure GSP Plus due to the labour rights issue, while Sri Lanka currently enjoys and hence, they are able to export apparel to the European market at cheaper rates than Bangladesh can.
However, the cheap labour in that country has been the main attraction for apparel investors to come to the country. It is labour in Sri Lanka that is no longer cheap and the apparel industry has been suffering from the lack of sufficient labour, which has to be considered a key factor for boosting apparel exports by tapping GSP Plus. According to the Asian Development Bank (ADB), Bangladesh’s gross domestic product (GDP) growth accelerated to 7.1 per cent in 2016 from 6.6 per cent in 2015, when Sri Lanka’s economic growth in 2016 was at 4.4 per cent, lower than 4.8 per cent in 2015.
Sri Lanka imports from Bangladesh apparel and clothing accessories, textile fibres, sacks and bags, pharmaceutical products, electrical machinery and equipment, edible vegetables and roots, iron and steel, chemicals, toilet and facialtissues, cellular phones and bicycle parts, when Sri Lanka exports to Bangladesh textiles and textile articles, enzymes, chemicals, minerals, plastics, rubber products, paper products and tea.
Even though the goods are traded at a significant level, the emphasis has to be given to increase the trade volume and further diversify the product range benefiting both countries. Under these circumstances is that for the past few years, the Sri Lankan blue chips have been keeping an eye on the market in Bangladesh and investing in banking, energy and apparel industries, the key areas of an economy. It is reported that the Bangladeshi businesses were also invited to invest in Sri Lanka during the President’s visit.
Two countries are also planning a trade deal and a special economic zone. Moreover, two nations signed 12 agreements which includes a deal on an apparel firm. These agreements signed during the visit will create good market opportunities in the future, which the business communities from both countries have to be prepared to harness. The two countries, Sri Lanka and Bangladesh continue their friendly relationship for a long time in the economic and political areas, especially as members of the South Asian Association for Regional Cooperation (SAARC) dedicated to South Asian cooperation.