There's a significant increase in tourists traveling to both countries


Jan 03 - 09, 2005



Implementation of WTO rules with effect from January 1, 2005 is likely to promote tremendous cooperation among the regional countries especially in the textile trade which is the mainstay of Pakistan's economy.

Since Pakistan is a major producer and supplier of cotton textile especially grey cloth and cotton yarn to the neighboring countries especially Bangladesh and Sri Lanka. The removal tariff and quota barriers with the implementation of WTO rules these trade ties in the textile sector are likely to further grow not only with Bangladesh and Sri Lanka but the trade circle is going to widen with India, Malaysia and Indonesia as well. However the immediate beneficiary of the trade cooperation seems to be Sri Lanka as the Free Trade Agreement has almost reached to its final stage and probably it will be signed in the first month of 2005. There are indications that besides promotion of trade ties and increase in two way trade volume between Sri Lanka and Pakistan, there is ample scope for joint ventures in the textile sector between the two countries.

Pakistan has offered to help Sri Lanka's garment industry to improve its backward integration efforts by supplying yarn, as it gets ready to face the challenges posed by the phasing out of the textile quota system at the end of this year.

"We will certainly want to support Sri Lanka by way of promoting garment industry joint ventures between Sri Lankan industrialists and Pakistani yarn producers which would enable the two countries to continue together as industry leaders," said Pakistan High Commissioner in Sri Lanka, Bashir Wali Mohammed.

Sri Lanka has facilities to manufacture fine-finished products, but the garment industry imports many of its raw materials while Pakistan has a large raw material industry.

According to reports coming from Sri Lanka, the Pakistan High Commissioner has said "If the two countries put their strengths together Sri Lanka's experience and our backward integration facilities in a giant joint venture, the two countries together can remain as one of the major garment exporters in the world".


"I strongly recommend a giant joint venture in this industry and we need to make a concerted effort to realize this project. We are quite happy to help Sri Lanka in anyway," said Bashir Wali Mohammad.

Pakistan is one of the leading yarn producers in the world and it is also one of the major cotton producers in this part of the world along with China and India. At present it exports yarn to countries such as Japan, Korea and the US. High Commissioner said that their raw material is available in the market more than the finished garments.

The two countries, which are enjoying excellent diplomatic relations are set to launch a Free Trade Agreement (FTA) early next year and are hoping to further strengthen their trade relations. An agreement had already been signed to have a FTA between the two countries during the Pakistan President Pervez Musharraf's visit to Colombo two years ago.

"Within the SAARC region, Sri Lanka stands out as a close friend of Pakistan," he said. Referring to Pakistan Prime Minister Shaukat Aziz's recent visit to Sri Lanka, he said it was a very successful visit and he held fruitful talks with many officials in Sri Lanka.




Pakistan holds the current Chairmanship of SAARC. The Chairmanship will be passed to Bangladesh during the next SAARC Summit to be held in Dhaka in February 2005.

Prime Minister Shaukat Aziz recently visited Sri Lanka as it is customary for the current Chairman to visit the SAARC countries prior to the main summit and to extend an invitation for next summit.

Though the Prime Minister visited Sri Lanka as the Chairman of SAARC, there were several other issues which were discussed with Sri Lankan leaders and Government officials at the highest level.

One of the major areas for discussion was the agreement to exchange convicted prisoners between the two countries a treaty was signed in this regard soon after the PM's visit. Currently, there are 40 Pakistanis in Sri Lankan jails and two Sri Lankan in Pakistani jails.

"We have looked into the human rights of the prisoners and decided to exchange them into the jails in their own countries so that at least, their families could visit them.

According to the treaty, only the convicted prisoners would be exchanged and their jail terms would be served in their respective countries. Those who are under trial will stay on till the legal procedure is completed," he said.

"Pakistan suggested this to the Sri Lankan Government on humane grounds. Sri Lanka already had such an agreement with the UK while Pakistan also has such agreements with many countries including the US and UK," the High Commissioner added.

Pakistan has tough laws and severe punishments to fight drug trafficking. "We don't want to pardon any drug traffickers if there are any among the offenders. We have a very strong and effective unit headed by a General serving in the Army to handle drug traffickers.


During the last two years, the two countries had been trying to finalize their lists of items for the proposed FTA. The main reason for the delay in launching the agreement was the desire by both countries to protect their agricultural products.

There were issues with certain products such as tea, potato and onions. Sri Lanka wanted a substantial quota for tea. At present Pakistan, which is one of the major tea consuming countries in the world, imports most of its tea from Kenya.

"We used to get tea from Sri Lanka. But for some reason it didn't continue. However, I am convinced that Sri Lankan/Ceylon tea is much better in taste. We have had many discussions over the tea issue and now I am positive that FTA will offer a major concession for Ceylon tea imports," he said.

As far as Pakistan's list is concerned, the problems occurred with the rice, potatoes and onions.

"Sri Lankan consumers mostly use Samba, but Pakistan does not produce that rice at all. We can send IRRI-6, the rice which was sent to Sri Lanka recently to make up for a shortage of rice in the local market.

Pakistan sent 2,000 tonnes of rice on a request by the Trade Minister," he said. Pakistani officials took prompt action to send the rice within 10 days.

According to High Commissioner, IRRI-6 is a better version and may be better than Samba. Yet it is cheaper in price.

"So we have asked Sri Lanka to allow us to export IRRI-6, under the FTA. As far as Basmati is concerned it is a very negligible number of people who can afford to purchase it.

There are other varieties of rice similar to Basmati in the local market. Our view is that Sri Lanka should allow us to compete with them. It is nothing to do with your agricultural products. Sri Lanka does not produce Basmati so it won't be a problem for your farmers," he said.

The next issue is with onion and potato imports under the FTA. "We have good quality onion and potato which we can export during the off season in Sri Lanka, as we know Sri Lanka is not self-sufficient in onions and potatoes.

You import them from other countries. Our entry into the market will ensure a better price for the consumer. However, when your crop is available in abundance, you can impose taxes on these items," he said.

Other major items in the list include pharmaceutical, industrial products, textiles and yarn. Referring to surgical items imported by Sri Lanka at present, he said: "Sri Lanka imports them from Germany although they are being manufactured in Pakistan. When Sri Lanka has the opportunity to directly import the same product from Pakistan at a lower price, they get it from Germany at a higher price."

However, the final decision on these items will be worked out after another session of meetings due to be held in Colombo on December 21 and 22 and is expected to finalize the lists before January as the two countries are planning to make an announcement on the launch of the FTA in January in Pakistan during President Chandrika Bandaranaike Kumaratunga's visit to that country.


Pakistan has also increased the number of scholarships given to Sri Lankan students in Pakistani universities. "We have increased the number of scholarships to 16 from 8.

In addition, students who could find their own funds will be considered for placements in Pakistan's universities. They have the opportunity to study any subject of their choice including medicine, IT and engineering.

There are plans to exchange delegations in arts and culture in the near future in order to strengthen the cultural ties between the two countries. Pakistani Tourism Minister and the Culture Minister are due in Sri Lanka early next year.


With regard to tourism between the two countries, the numbers have increased over the last year, owing to continuous promotions and the resumption of direct flights between the two countries.

There's a significant increase in tourists traveling to both countries. This is a positive sign to say that we have begun a new journey in our tourism relationships.

At the same time many Pakistani business, IT, educational and trade delegations visiting Sri Lanka in the recent past which is an indicator of the increasing trade links.

Both our countries have wonderful climates and many beautiful sites to visit and every traveler would have something of their own to enjoy in both countries. Currently both national airlines Sri Lankan Airlines and Pakistan International Airlines fly between the two countries several times a week.

The open heart support extended by Pakistan in the hour of the need when the tsunami had played havoc around the coastal belt of Sri Lanka killing thousands of Sri Lankans just in one day in the aftermath of the tsunami. The friendly gesture on the part of Pakistan has won the heart of the people in that country, reports said. In fact, the joint venture between Sri Lanka and Pakistan can be of mutual benefits of the two countries especially for joint efforts in marketing of the products of the countries.