Thursday, September 27, 2012

Sri Lanka wakes up to massive APTA, China sunrise

Thu, 2012-09-27 14:46 — editor
Colombo, 27 September, (
As Sri Lanka’s exports under APTA grew more than three-fold by 2011’s end, the country is suddenly realizing the importance of the promising sunrise FMCG segment in the 2.5 Bn strong APTA markets led by APTA’s market giant, China.
And in the aftermath of Pure Ceylon Tea international brand initiative, Sri Lanka is now beginning to push Pure Ceylon Cinnamon and other exports to China using a rare opening given on 24 September by Chinese admin to its vast FMCG market, based on a Lankan Ministerial level request. “On behalf of our exporters, I thank China’s SAIC for giving us new openings. In the period of 2007-2011, our exports to APTA bloc grew by huge 360% to an estimated $99 Mn. This outsize growth rate is highly promising. And in 2007-2011, Lanka’s export’s to China under APTA alone grew by massive 700%” said Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 24 September.
Minister Bathiudeen announced this in the aftermath of a high level official courtesy call made on him by Ms Gan Lin, a Vice Minister of the powerful State registration and licensing authority of China, called as the State Administration for Industry and Commerce of China (SAIC). Gan Lin’s SAIC has more than 51 million business enterprises and individual businesses as well as 436,800 foreign firms registered under it and operating within China. SIAC is run by Minister Zhou Bohua, the direct appointee of none other than Wen Jiabao, the Chinese Premier. Among SAIC’s well-known functions are handling of international trademarks in China.
If Sri Lanka’s latest initiatives on China market become successful, Sri Lanka will be able to effectively draw on China’s promising Fast moving Consumer Goods (FMCG) segment, which is widely regarded as a sunrise industry. According to the global market research giant Kantar World panel, China’s sunrise “urban sector FMCG market” alone grew by 16.4% in Q1-2012 in comparison to Q1-2011. The hypermarkets, supermarkets and convenience stores (collectively called as ‘modern trade’) are still the most important trade in China, taking 40% of the value share in China’s FMCG market. Interestingly, both urban and rural households also reported income growth in 2012 and the income per household was higher than the inflation rate. Rural income growth stood at 17% (compared with Q1-2011), while urban incomes rose by 13.8%.
The APTA bloc members are China, India, South Korea, Sri Lanka, Bangladesh, and Laos. In 2010, Sri Lanka’s total exports to APTA bloc (Bangladesh, China, India, Laos, and South Korea) stood at $64.5 Mn which topped to $99Mn in 2011, according to the latest estimates provided by the Department of Commerce of Sri Lanka. “It is significant that under APTA, Sri Lanka receives export tariff concessions for 4795 export items from APTA bloc of which, 1858 product items are from China –the highest tariff concession giving country under APTA” Minister Bathiudeen informed Ms Ms Gan Lin (South Korea closely follows with 1673 items, and India, 1055).
“In 2007-2011, Lanka’s export’s to China under APTA grew by 719%, thereby China becoming the most promising destination when it comes to Sri Lanka-APTA trade” Minister Bathiudeen revealed to Ms Gan Lin. “We thank you for facilitating more and more Sri Lankan products to the Chinese market” Minister Bathiudeen added. “As we move further into APTA, our situation will be improved greatly by a level playing field. Therefore, as a start, we need support from SAIC for a level playing field for our products in China’s market” Minister Bathiudeen announced. Introducing Ceylon Cinnamon to Gan Lin, Minister Bathiudeen said: “We are also very keen to increase reception to Pure Ceylon Cinnamon in China’s market in the same way as Pure Ceylon Tea. Sri Lanka will be thankful for marketing and distribution support for our Cinnamon and other exports. We are looking to get Pure Ceylon Cinnamon trade mark in China and to this end, we need SAIC’s assistance” Minister Bathiudeen requested.
“We like your products which are of high quality and we are looking for more and more tea and rubber from Sri Lanka” said Ms Gan Lin apprising Minister Bathiudeen. “We at SAIC are focused on market development of our own Chinese products rather than foreign products. However, we see Sri Lanka as a small exporter and from our point of view Sri Lanka’s volumes are no threat to China market at all. Therefore we are looking at your official, Ministerial request favourably and would consider assisting Sri Lanka in China markets” announced Ms Gan Lin.
“Also my suggestion in this regard is that there is great potential for each other and joint efforts from both parties can successfully exploit this promise. We also invite Sri Lankan businesses to visit China more often and explore Chinese consumer needs closely so that Sri Lankan suppliers can get a better idea as to what they can move and what they cannot in the Chinese marketplace” Gan Lin stressed. Though Sri Lanka’s exports to Bangladesh under APTA also grew massively from 2007-2011, it is due to trading of a single product, namely copra.
However exports to China under APTA, are a much more diversified basket, and holds bigger potential. The third round of APTA talks in 2006 resulted in successful tariff concessions which were substantial under APTA (entered into force September 2006) and offered a maximum of 50% Margin of Preference on existing tariffs among the member countries, includes substantial tariff concessions and a wider coverage of products.
The Department of Commerce revealed that at the end of the Third Round, the APTA bloc had exchanged concessions on 4,270 products plus 587 products offered exclusively to Least Developed Countries (LDC), a marked increase from the 1,721 products plus 112 products prior to September 2006. Among Sri Lanka’s major exports to APTA are spices (pepper, nutmeg, mace) cashew, essential oils, natural graphite, activate carbon, rubber products (tyres, gloves, mats, rings) floor tiles, ceramic, tableware/kitchenware, glassware, semi-precious stones, gem and jewellery, stuffed toys, brooms and brushes, cut flowers, footwear, biscuits, chocolates, apparel, fresh fruits and juices, wooden furniture, mattress, electric lamps, ornamental fish, fresh/frozen fish and fishery products.
- Asian Tribune -

Apex court warns it can stop Kudankulam operation for public safety

Fri, 2012-09-28 01:36 — editor
From R. Vasudevan—Reporting from New Delhi
New Delhi, 28 September ( :
The Supreme Court on Thursday made it clear that it can stop commissioning of the Kudankulam Nuclear Power Plant if it finds that the mandatory safety requirements for it have not been in place.
A bench of justices K.S. Radhakrishanan and Deepak Misra said the safety of plant and the people living in its vicinity is its prime concern and issued notices to the Centre and the Tamil Nadu Pollution Control Board on a plea challenging the environmental clearance given to the controversial project.
“We will not hesitate to stop the plant if we find that the mandatory safety requirements have not been taken care of at the site,” said the bench while posting the case for further hearing on October 4, 2012.
The court earlier had refused to stay loading of the fuel in the plant but had agreed to examine the risk associated with the project.
The court was hearing an appeal by social activist G. Sundarrajan against the Madras High Court’s decision refusing to impose any restraint against the plant.
The petitioner contended that after last year’s nuclear disaster in Fukushima in Japan, the Atomic Energy Regulation Board (AERB) had recommended 17 safety measures for the plant which have not been put in place. It said till now only six safety measures have been adopted and the government will take two years to implement the rest of the recommendations.
- Asian Tribune -

India-Sri Lanka Ties Hostage to Tamil parties

By Shastri Ramachandaran*
IDN-InDepth NewsAnalysis

NEW DELHI (IDN) – India's neighbours are not necessarily its friends. They can hardly be called India's allies. In regional and international forums, more often than not, they are ranged against one another. History, geography, religion, geopolitics, uneven development, competing ambitions and much else account for this state of affairs.
As a result, bilateral relations have their ups and downs and can be warm or chilly, euphoric or troubling. Even so, over the decades, the South Asian countries have learned to live and let live, regardless of the problems at home and across their respective borders.
The striving is to maintain friendly relations, a climate conducive for talks on matters of mutual interest and to prevent any situation from reaching breaking point. However, Tamil Nadu’s political parties, despite being an integral part of coalition governments at the Centre for long years now, do not seem to have grasped this elementary aspect of diplomacy.
The Kazhagams – Jayalalithaa's AIADMK, Karunanidhi's DMK and Vaiko's MDMK – do their best to vitiate India’s relations with Sri Lanka. The sideshows staged by these parties against India-Sri Lanka cooperation and against dignitaries (and ordinary citizens) from the island republic would be handy to illustrate a tract on "How to lose friends and alienate people".
It is bad enough that New Delhi is not good at making friends of India’s neighbours. It is worse when the DMK and AIADMK push their sectarian agenda in external affairs and foment hostility to cultivate ill will.
Sri Lanka President Mahinda Rajapaksa's visit September 19 to 22, 2012 was yet another occasion for the Kazhagams to put up their predictable 'tamasha' (spectacle) of protests – in the name of championing the rights of Tamils in Sri Lanka. The frontline performer this time was MDMK general secretary Vaiko.
President Rajapaksa, who laid the stone for a University of Buddhist and Indic Studies in Sanchi, held wide-ranging talks with Prime Minister Manmohan Singh in Delhi. Doubtless, devolution of powers to create conditions for Sri Lanka’s Tamils "to live with dignity and respect", elections in the Tamil-dominated Northern Province and the political plight of Tamils after the LTTE’s defeat in May 2009 were discussed between Singh and Rajapaksa.
A Comprehensive Economic Partnership Agreement (CEPA) and Indian fishermen being attacked by Sri Lankan navy were among the items on the agenda of the two leaders, who also met without their aides.
The significance of the meeting goes beyond the issues discussed because, one, it was the first meeting between the two heads of government after India voted against Sri Lanka at the UN Human Rights Council in March this year. Two, this was the first meeting to deal with a range of substantive issues after June 2010. Three, Sri Lanka’s human rights record comes up for review at the end of this year. Four, New Delhi is keen to address the unrest among Tamils by pressing for their political rights. (In contrast, the Kazhagams appear to be interested in whipping up sentiment solely for political mileage in Tamil Nadu).
New Delhi has to make amends for the blunder of voting with the US against Sri Lanka in the UNHRC. Whereas the DMK and AIADMK keep targeting Sri Lanka as part of their petty one-upmanship games against each other. Their posturing has provoked attacks on innocent Sri Lankan pilgrims visiting Tamil Nadu. AIADMK chief minister Jayalalithaa objected to Sri Lankan defence personnel being trained in military institutions in India. Karunanidhi sought to outdo Jayalalithaa by saying that Sri Lanka cannot be considered “friendly” – because it allows China to execute defence projects in Jaffna.
It may not occur to the DMK and AIADMK that their posturing may be driving Sri Lanka (away from India) into the arms of China. If these parties persist in their unfriendly campaign, Sri Lanka may be forced to not only hand over more projects to China, or even Pakistan, but even start sending their defence personnel to these countries for training. Then the fat would be truly in the fire.
Sri Lanka is in a zone of Indian influence and is of enormous strategic value. India is Sri Lanka’s preferred partner and the one country from which it would like all help. Instead of creating conditions that make Colombo approach Beijing or Islamabad, it is high time the national parties make the DMK and AIADMK see strategic sense
These two regional parties are not being just perverse. They are being irresponsible and hurting India’s strategic interests. One would have expected that with stints at the Centre, they would acquire an understanding of India’s larger national interest, strategic stakes and global role. Far from that, as their role and power expands at the Centre, the Kazhagams’ worldview seems to be shrinking into even narrower confines.
*The writer is an independent political and foreign affairs commentator. This article in DNA is being republished by arrangement with the writer. [IDN-InDepthNews – September 26, 2012]

Sri Lanka GDP growth forecast cut to 6.8% as exports fall

Country’s overseas sales of items from garments to tea fall for a fifth straight month in July
Bloomberg | Published: 15:20 September 27, 2012
Colombo: Sri Lanka lowered its forecast for economic expansion this year as higher interest rates curb spending at home and faltering global growth hurts exports.
Gross domestic product is set to rise 6.8 per cent in 2012, compared with an earlier estimate of 7.2 per cent, Central Bank of Sri Lanka Governor Ajith Nivard Cabraal said by telephone from Colombo on Thursday. A drought has affected farm output, contributing to the cut in the projection, he said.
Growth weakened to a more than two-year low of 6.4 per cent last quarter after officials raised borrowing costs and let the rupee slide to damp demand for imports and pare a trade deficit. Sri Lanka’s overseas sales of items from garments to tea fell for a fifth straight month in July, exacerbating the slowdown in the $59 billion (Dh216.5 billion) economy.
“We had expected the Sri Lankan economy’s growth to weaken in the second quarter, reflecting the impact of the administrative measures, but the magnitude of the slowdown took us by surprise,” Kaushik Das, an economist at Deutsche Bank AG in Mumbai, said in a note before the release. “We expect growth momentum to deteriorate further in the subsequent quarters.”
Borrowing costs
The rupee is down about 12 per cent against the dollar this year. The benchmark Colombo All-Share Index has fallen 2.2 per cent in the period.
The monetary authority left borrowing costs unchanged for a fifth month in September after raising rates in February and April. Cabraal is trying to damp an inflation rate currently at 9.5 per cent.
Sri Lankan exports plunged 17.4 per cent in July, the biggest slump in three years. A moderation in imports helped narrow the trade gap to a 17-month low of $534.6 million, according to the central bank.
The government revamped economic policy this year to tackle the trade deficit after it pressured currency reserves. Stronger domestic demand following the end of a 26-year civil war in 2009 stoked the shortfall.
The International Monetary Fund has loaned Sri Lanka $2.6 billion to help rebuild the reserves. Cabraal said in July that the island is seeking support from the Washington-based lender for at least the next two years.