Promoting Malaysian ties in Kandy

The opening of Sri Lanka’s first regional council in Kandy last month to promote trade, investment and business between two countries – Sri Lanka and Malaysia – may be the forerunner to similar initiatives in other urban cities in the country.

Kandy business leaders said the formation of the Sri Lanka-Malaysia Regional Business Council in Kandy is an important milestone for the city and comes at a time when preparations are underway for the construction of a Colombo- Kandy superhighway which – if realized – would take a mere 55 minutes to reach either place, almost the same time spent if one is to travel from Nugegoda (on the southern outskirts of Colombo) to Fort!

At a grand launch at the Earl’s Regency Hotel in Kandy, Malaysian High Commissioner Nazirah Hussain told an audience of business leaders from the region and Colombo that Malaysia is also a developing country and for a developing country to be the largest investor in Sri Lanka is a great achievement.

For three years running – 2004/2005/2006 – Malaysia has been Sri Lanka’s biggest investor, primarily because of the massive investment by Dialog Telekom through Telekom Malaysia, Malaysia’s biggest telecom firm.

She made some interesting suggestions on how both countries could benefit in promoting investments in the two regions that Malaysia and Sri Lanka are located.

Hussain said Sri Lanka could make use of Malaysia as a gateway to the 500-million population of ASEAN (Association of South East Asian Nations) and in the same spirit, Sri Lanka could act as a conduit to South Asia and its huge market of over one billion people.

“This would be excellent south-south cooperation and we need not look to the United States or the West for much needed investment. It can happen within our regions and raise the development process,” she added.

While complimenting the launch of the Kandy regional business council, she said there was a need to sustain this momentum and suggested that it was worthwhile considering opening a Malaysian Consulate in Kandy.

She said a Malaysian company has signed a MoU with Sri Lanka for a consultancy study on the Colombo-Kandy highway which would create enormous economic growth in the region once completed.

Daya Weeraratne, chairman of the new Kandy council, said the three main business organizations or chambers in Kandy were keen to work together to take this process forward.

“We have heard and learnt from the media how the Malaysian government encourages the expansion of the private sector activities within and outside their country.”

Malaysia is Sri Lanka’s biggest foreign investor in Sri Lanka and according to Sri Lankan government statistics in 2005 Malaysian investments totaled US$ 99.56 million, far ahead of the second placed Singapore with US$ 30.63 while other countries were lagging behind. From the figures available so far up to September 2006, Malaysia again topped the list with US$ 86.12 million worth of investments and may exceed US$ 100 million in 2006. “This is a massive investment but I personally feel that much has not filtered through to our region.”

He said currently the Western Province alone produces close to 50 percent of the country’s gross domestic product (GDP). All other provinces produce the balance 50 percent or slightly more – which means less that eight percent per district outside Colombo.

Weeraratne, a veteran business leader in Kandy, said this is a sad state of affairs and was one of the reasons that led to the formation of a Regional Business Council under the name of Sri Lanka Malaysia Regional Business Council to be established in Kandy.

“We hope this will attract foreign direct investment to our region and increase it to at least 20% of the GDP.”

Weeraratne said an enthusiastic band of businessmen representing all communities from the region have come together in this initiative in dealing directly with Malaysia and attracting investments to this region.

“This will help not only the exports from our region but also provide huge employment to our unemployed youth in this region as well as exposure to the world our arts and crafts unique to our region,” he said, emphasizing on the arts and crafts in Kandy that the region is known the world over particularly among tourists.

He said they were also working towards cultural and educational exchanges between Sri Lanka and Malaysia on an intra country basis and to find ways and means to establish joint ventures with interested parties of Sri Lanka and Malaysia.

Weeraratne singled out one Kandy business leader who was instrumental in the formation of this new business council.

He said it was M. H. Saleemdeen, past president of the YMMA Conference who on July 1, 2006 not only planted the “seeds (of this organization) but continuously watered it to see the organization getting off the ground.”

Dr Rohitha Silva, President of the Sri Lanka-Malaysia Business Council, said this council was formed in 1994 at the initiative of the late Lakshman Kadirgamar, Foreign Minister. The council which comes under the aegis of the Ceylon Chamber of Commerce (CCC), started with 30 members is now the strongest council in the CCC.

He said the awards scheme organized by the Colombo-based council is very popular where the companies that have topped the list of doing business with Malaysia are recognized.

He said the Kandy council could also get involved in the annual programme. Dr Silva said with Malaysia and other countries in the region like India for instance (being the biggest inbound tourist market) being some of the biggest investors in Sri Lanka, Sri Lanka should focus on attracting investment from the region instead of concentration from Europe and the US.