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New Embassy in Spain to fast-track trade growth

10 Jan 2021

Sri Lanka has decided to establish a diplomatic mission in Spain to capitalise on the growing trade relationship between the two nations, with a particular focus on Sri Lanka’s exports to Spain. “There has been a steady growth of exports in recent years with potential for further expansion. Therefore, we have decided to open an embassy in Spain,” State Minister of Regional Co-operation Tharaka Balasuriya told The Morning yesterday (10). The total trade turnover between Sri Lanka and Spain was $ 163 million in 2019, with Sri Lanka’s exports amounting to $ 69 million, according to Foreign Ministry statistics. “There has been a steady growth in exports in recent years, as over 6,000 product categories from Sri Lanka can be exported duty-free to Spain under the EU (European Union) GSP+ Scheme,” Balasuriya said. Sri Lanka is currently awaiting the approval of the Government of Spain to open the diplomatic mission. Sri Lanka’s major exports currently include apparel, tobacco, cinnamon, and rubber products, and with a population of 47 million, the Ministry believes the Spanish market has huge potential as an export destination that is currently largely untapped. Spain is also the gateway from Europe to Africa, and the opening of a Sri Lankan mission is expected to open opportunities for trade in other Spanish-speaking countries as well. In terms of investment, Balasuriya stated that in the 2005-2019 period, the total foreign direct investment (FDI) from Spain amounted to $ 46.32 million, adding that there is “potential to attract more FDI”. Specific strategies would be formulated to attract tourists from Spanish-speaking countries, The Morning learnt. In 2018, 29,208 Spanish tourists arrived in Sri Lanka according to official tourism statistics. However, in 2019, as a result of the Easter Sunday attacks, there was a slight decrease, with 24,489 arrivals. Iberia Airlines had also previously expressed interest in commencing regular flights between Colombo and Madrid. In addition to tourism, there is potential co-operation in agro and heritage tourism as well. “There are approximately 1,000 Sri Lankan workers in Spain, mainly in the hospitality and tourism sector, and there are significant opportunities in other sectors to obtain more employment opportunities,” Balasuriya said. Commenting on the education sector, Balasuriya mentioned that there are also many Sri Lankan students studying in Spanish universities, with many universities offering academic courses in the English medium. It is becoming a popular destination due to the relatively lower living cost. “There are currently approximately 80 students,” he said. Over the years, Spain has extended development assistance to Sri Lanka through two channels, namely Official Development Assistance (ODA) and Export Credit Facility. In 2012, € 11 million was provided under the Export Credit Facility for the construction of the Veyangoda Railway Crossing Flyover project.  Furthermore, in 2014, € 21.9 million was provided under the Export Credit Facility for the Greater Ratnapura Water Supply Project Phase 1, and ODA assistance was provided for the construction of flyovers at Ganemulla and Polgahawela, where Sri Lanka can continue to benefit from Spanish development assistance as well. The Spanish economy is the world’s 14th-largest, with a GDP per capita of $ 29,614. It is a major industrial economy and the second-largest automobile manufacturer in Europe.  Spain also has a highly developed agricultural sector, and is the second-most visited country by tourists, according to the World Tourism Organisation, with 85 million tourists visiting last year.  Spanish companies, which previously invested mainly in South America, are now increasing their presence in Asia, in the renewable energy, transport, textile, and telecommunication sectors.

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