Sri Lanka and the Republic of Korea, as two Asian countries, enjoy longstanding friendly relations. Historical Buddhist links between Sri Lanka and Korea go back to the 5th century AD. In modern times, since the establishment of diplomatic relations between Sri Lanka and Korea on 14th November 1977, there has been a steady expansion of bilateral relations in the political, economic and cultural spheres, and people-to-people contacts.
The year 2017 is of particular significance as the two countries celebrate the 40th anniversary of the establishment of diplomatic relations on 14 November 2017. A series of promotional events are organised by the Sri Lanka Embassy in Korea throughout 2017 to celebrate this 40th milestone in diplomatic relations.
Following the assumption of office of Sri Lanka’s national unity Government led by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe in 2015, there is greater focus on elevating the existing friendly relations with Korea, with particular emphasis on the political and economic spheres. The official visits of the Korean Foreign Minister Yun Byung-se to Sri Lanka on 15 March 2017, and of Sri Lanka’s Foreign Minister Managala Samaraweera to Korea on 11-12 March 2016 are significant.
Sri Lanka is a lower middle income country with a GDP per capita of USD 3,924 and a population of 21 million. Bilateral trade between Sri Lanka and Korea stands at approx. US$ 372 million (2016). The main export from Sri Lanka to Korea is apparel, accounting for 27 percent of Sri Lanka’s total export earnings from Korea (2015). There also exists potential to export ICT and BPO/BPM services, sea food and fisheries products, aquarium fish, fruit & vegetable, and floriculture products to Korea, in addition to rubber and rubber-based products, coconut-based products, Ceylon tea and spices. MOUs exist between the Ceylon Chamber of Commerce and the Korea Chamber of Commerce and Industry (KCCI) and the Busan Chamber of Commerce and Industry; the Sri Lanka Export Development Borad (ADB) and the Korea Importers’ Association (KOIMA); and Sri Lanka’s Board of Investment (BOI) and the Small and Medium Business Corporation (SBC) of Korea. Sri Lanka also has interest in entering into a Free Trade Agreement (FTA) with the Republic of Korea.
Korea is an important source of foreign direct investment (FDI) to Sri Lanka. Korean investment has over 70 companies based in Sri Lanka and has generated more than 8,000 job opportunities in the country. The possible target sectors for Korean investment in Sri Lanka include manufacturing of electronics/electronic components/electrical equipment, light engineering, logistics and warehousing, ship/boat building and repair, automotive parts manufacturing, solar panels and parts manufacturing, medical device manufacturing, development of industrial zones, agriculture and agro-based products, fish processing, rubber-based industries, textiles and textile accessories, tourism and leisure industry, infrastructure, and knowledge based industries including IT/BPM. The Government is preparing legislation to establish a single window for investment approval. The targeted outcome is to bring Sri Lanka within the top 70 nations of the Doing Business Index by 2020.
On 24 May 2016, an MOU was signed between the Korean Minister of Land, Infrastructure and Transport (MOLIT) Kang Hoin and Sri Lanka’s Minister of Megapolis & Western Development Patali Champika Ranawaka on collaboration between the two Ministries on Western Region Megapolis Planning Project. This includes cooperation on the Comprehensive Planning for the Science and Technology City and the Katunayake Aero City, which is ongoing.
Korean tourist arrivals in Sri Lanka which stood at 4,318 in 2010, has increased to 14,520 in 2016, registering a 236 per cent growth. There is much potential to attract more Korean tourists with the commencement of three direct flights a week by Korean Air between Seoul-Colombo from 2013, as well as the many daily connections offered by other airlines.
Development cooperation to Sri Lanka is offered via the Korea International Cooperation Agency (KOICA) and the Korea Exim Bank Economic Development Cooperation Fund (EDCF) on a wide spectrum including infrastructure, governance, education, industry, fisheries, energy, agriculture, human resource development and public administration. Sri Lanka today stands as the third highest recipient of Korean ODA in terms of cumulative disbursements (USD 430.4 Million), and is placed at number five in terms of commitments (US$ 652.5 Million), out of 52 developing countries. Since 1990, the Korean Government has provided concessional loans to Sri Lanka through the EDCF under which many important infrastructure projects have been completed, with several underway.
Labour relations forms an important dimension of bilateral relations with approximately 25,000 Sri Lankan contractual workers engaged in the manufacturing, construction and fishery sectors under the Employment Permit System (EPS) in Korea.
The unity Government of Sri Lanka is committed to strengthening the country’s democratic institutions, governance structure, the rule of law, and achieving reconciliation for all communities. The Republic of Korea continues to extend its support in these endeavours as does the international community.