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Afghanistan to open air corridor to Sri Lanka to revive trade, economic ties

Buoyed by its unprecedented rise in latest global Doing Business ranks, Afghanistan seeking to revive trade with Sri Lanka and strengthen economic ties between the two countries will open a direct air corridor for trade later this month.

Furthermore, Kabul is also keen on an Investment Protection and Promotion (IPP) pact with Colombo to revive lagging bilateral economic ties, Minister of Industry and Commerce RishadBathiudeen said.

Meeting with Minister Bathiudeen at the Ministry, Afghanistan’s Ambassador to Sri Lanka M. Ashraf Haidari said the Afghan government would like to extend the Air Corridor launched two years ago to take domestic goods to countries in the neighborhood and beyond the region to Sri Lanka as well.

He said as a result of the air corridor, country exported US$ 1 billion worth products.

“We would like to extend this corridor to Sri Lanka, via a new corridor through South, all the way to Colombo,” Haidari said at the meeting with Minister Bathiudeen. Ambassador Haidari was joined by Afghanistan Embassy’s First Secretary to Sri Lanka, MunirGhiasy.

The Afghan envoy said the proposed corridor is a direct air-link to Colombo but since there is no direct Kabul-Colombo connectivity at present, the air link will have to be operated through Mumbai or New Delhi until a direct connection Colombo is established.

Ambassador Haidari encouraged Sri Lanka’s national carrier, SriLankan Airlines to consider a direct flight to Afghanistan.

“As far as an air service agreement is considered, we are ready to extend special lower tariff, landing rights depending on value, exemptions to Lankan businesses, easy business registration for Lankan businesses coming there as well as Afghani cargo coming to Colombo-even easy visas to Lankan travelers coming there,” Haidari said.

He noted that Kabul based airlines such as Ariana Afghan Airlines and Kam Air that are ready to come to Colombo.

“We need to exchange business delegations between both countries, as a start. We are proposing an Investment Protection and Promotion Agreement to kick start bilateral investment and trade. We are also proposing an Afghanistan-Sri Lanka Business Council, which will facilitate these bilateral B2B processes at business level-since ground level businesses know which products move both ways. The bilateral trade need not be limited to Air Corridor only but if necessary can be conducted through marine cargo as well-depending on product-wise cost effectiveness” Ambassador Haidari said.

“We look forward to see Minister Bathiudeen signing the Investment Protection and Promotion Agreement representing Sri Lanka side. We already have such pacts with India, Iran, Pakistan and some other countries in the region. As for air-corridors we already have such with India, Central Asia, and China. Even Turkey and Finland are interested. It is time Sri Lanka joins us. By the way the air-corridor we propose towards Colombo is not an extension of our corridor with India but a dedicated link to Colombo.”

In its Doing Business 2019 report, the World Bank said Afghanistan to be one of the top 10 improvers in doing business alongside China, and India. Afghanistan climbed 16 positions in rankings from previous 2018 Report, to a new rank of 167.

Responding to Ambassador Hairdari, Minister Bathiudeen said that he is pleased that his initial discussions in Colombo in August 2018 with First Secretary to Sri Lanka MunirGhiasy is finally bearing fruit.

“From Sri Lankan exporters’ point of view, Afghanistan is a virgin market with huge trade opportunities. I have promptly conveyed MrGhiasy’s August 2018 invitation to me to come and explore Afghanistan’s vast mining deposits, to our business sector. I welcome your official call today for an Investment Protection and Promotion Pact with us to revive our economic ties and shall forward it to our leaders and relevant line Ministries for next steps. It is time that our bilateral trade to surge beyond the low US $ one million levels,” said Minister Bathiudeen.

In 2017 Sri Lanka’s total trade with Afghanistan was only US$ 820,000 and Sri Lankan exports were at $700,000, slightly increasing from 2016’s US$ 630,000. Printed books, newspapers and other printing industry products, were Sri Lanka’s major export to Kabul in 2015, 2016 and 2017 (68% of total Lankan exports to Kabul in 2017). Imports from Afghanistan were negligible.

While meeting Minister Bathiudeen in Colombo in August 2018, Mr. Ghiasy called Lankan investors to mine Afghanistan’s vast mineral resources.

“We have a trillion dollar worth untapped metal, mineral such as iron, copper and gold as well as mining resources including oil and gas. The global multinational companies are costly. We like to see the countries in this region and neighbors entering Afghanistan to prospect them, rather than very costly global firms. As a result we invite Sri Lankan businesses and firms to prospect in Afghanistan” said MrGhiasy.

A recent study by Afghan Ministry of Mines and Petroleum established natural resource deposits valued at US$ 3 trillion sitting pretty in Afghanistan’s landmass.

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