H.E. Frank-Walter Steinmeier, Federal President Germany
Excellencies
Dr Peter Tschentscher, First Mayor of Hamburg
Dr Arnd Nenstiel, Chairman OAV, BAYER AG
Ladies and gentlemen,
It is my great pleasure to be here in the historic Hamburg City Hall of the Free and Hanseatic City of Hamburg. I’m delighted and honoured to address this gathering in the presence of H.E. Frank-Walter Steinmeier, Federal President Germany, a longstanding friend of Sri Lanka and other distinguished invitees.
I would like to convey my appreciation to Dr Arnd Nenstiel, Chairman OAV for the invitation to attend the 102nd East Asia friendship dinner and the ’German-Asian Forum on Vocational Education & Training.’ Today’s meetings were very useful to gain an understanding about the future potential of our bilateral relationship which has always been anchored on a foundation of respect, goodwill and friendship our two peoples.
I hope my remarks tonight will give you a snap shot of Sri Lanka’s people and its economic potential with the aim of further strengthening our economic partnership. Many of you here would have either been in Sri Lanka or know someone who has been in the country, most probably for tourism purposes. Due to the economic and political crises we underwent in 2022, and the resulting media coverage around it, some of the positive attributes of Sri Lanka seem to have been eclipsed. I would like to explain tonight how the difficult economic challenges we faced in recent years have become a catalyst for transformative change both in our economy, politics and society that we hope will benefit our country in the long run.
A nation in the Indian Ocean
As a South Asian nation in the Indian Ocean, Sri Lanka is committed to extending her fullest support in ensuring the security of the Indian Ocean region and maintaining a peaceful maritime environment. We uphold a free and open Indo-Pacific, encompassing maritime safety and security. Engagement with countries in Asia, is a priority in the region as we seek to maintain our sovereignty and independence. At the same time, we want to strengthen our relations with the rest of the world and to seek new partners for collaboration.
Vocational education
The government of Germany has been a trusted development partner for Sri Lanka. A notable milestone of the bilateral relationship was when President Steinmeier visited Sri Lanka in 2015, in his then portfolio as Germany’s Foreign Minister, to declare open the second vocational education school built with German government assistance to serve the youth in the Norther Province in Sri Lanka. This school which is known as the Sri Lanka – German Training Institute (SLGTI) Kilinochchi, continues the strong tradition of collaboration between Sri Lanka and Germany in the field of vocational education.
In this context, I’m privileged to get the opportunity to continue and indeed to further strengthen the partnership between Sri Lanka and Germany in the field of vocational education. The collaboration between the two countries in the field of vocational education goes back more than 65 years to the establishment in 1959 of the first Sri Lanka- German Technical Training Institute in Moratuwa, Sri Lanka. This institute, widely known in Sri Lanka as ’the German Tech’, is now the foremost institute in Sri Lanka for the training of skilled technicians in the field of Automobile Engineering and allied trades. Those trained by the German Tech SL have found employment around the world.
The field of vocational education is one among several facets of the strong bilateral relations between our countries. Sri Lanka, under the new government which received a strong mandate from the people, is looking forward to strengthening relations with the government and people of Germany.
Tourism
Germany is a valued and trusted partner to Sri Lanka. In this regard, the tourism industry has played a key role in establishing strong linkages, especially between our two peoples. German’s love of travel or ’wanderlust’ is well known all over the world. They also love learning about new cultures. Sri Lanka has been a favourite destination for Germans for many years now.
Germany is traditionally the 4th largest tourism source market for Sri Lanka. In 2024, 136,084 German tourists arrived in Sri Lanka which is a 32.7% growth compared with 2023. We are confident that this year will see the highest number of tourist arrivals in Sri Lanka’s history. The potential of Sri Lanka tourism is increasingly getting wider recognition. The South Coast of Sri Lanka has been spotlighted in Vogue as this winter’s must-visit destination, and the iconic Colombo-Badulla train journey has been named one of Lonely Planet’s top 10 scenic train rides for 2025. However, there is an aspect that is not yet measured in the tourism industry and that is friendliness of the people. Many visitors to Sri Lanka say that the most appealing thing about Sri Lanka is the hospitality and the warmth of the people. I will add that the natural beauty of the country, our cultural heritage, wildlife, and cuisine follow close behind. I am sure that these and other attractions such as ‘Ayurveda’ treatments which are growing in popularity, are some of the aspects German people admire about Sri Lanka.
Economic and social stability leading to investment
While the tourism industry recovers, the government has also focused on creating a conducive environment for investment and business, including the tourism industry, which is attracting attention from investors with the revival of the industry.
Despite facing a challenging economic crisis in 2022, Sri Lanka’s economy has regained its normalcy to a great extent within a relatively short period. This progress is the result of coordinated, transparent, and robust measures undertaken by the Central Bank of Sri Lanka and the Government, supported by numerous public and private stakeholders as well as international agencies and lenders and our creditors. Most of all, the people of Sri Lanka demonstrated once again our resilience and capacity to come through a crisis.
Key pieces of legislations related to public financial management, public debt management, and anti-corruption have been enacted recently, which are pivotal to strengthen prudent management of public finance and debt, transparency and accountability. We are also committed to creating a more investment-friendly environment within the country, introducing an Investment Protection Act.
A key driver of our progress has been restoration of macroeconomic stability, achieved through a sound monetary policy measure, strong fiscal consolidation measures and implementation of long-overdue structural reforms. These efforts have created a conducive environment for growth as we move forward. The Sri Lankan economy has recorded positive growth since the second half of 2023. Leading indicators signal that this growth momentum is set to continue, underpinned by strong macroeconomic fundamentals.
Sri Lanka reported 5% growth in Sri Lanka’s Gross Domestic Product (GDP) for 2024, marking a significant recovery from economic setbacks in 2022 and 2023. The expansion was driven by increased export and import volumes, higher container handling at Sri Lankan ports, and a stabilized foreign exchange rate. We expect greater involvement by the private sector as the economy continues to improve.
Improvements on the external front, primarily driven by workers’ remittances and tourism inflows and also exports, have resulted in a relatively stable exchange rate and enabled the Central Bank to rebuild gross official reserves. Moving forward, the expected inflows from the services sector are expected to sustain this positive momentum in the external sector and provide a buffer against external shocks.
We are implementing necessary measures to support small and medium-scale entrepreneurs while also planning a substantial transformation in the agricultural sector. A major initiative is underway to develop a port-centric maritime economy, and with the assistance of the Asian Development Bank, we are expediting the construction of the Kerawalapitiya Container Terminal.
Sri Lanka’s location has huge opportunities for the future growth trajectory of the country. Sri Lanka’s strategic location off the southern coast of India along the main east-west Indian Ocean shipping lanes gives it a regional logistical advantage. This geographic advantage remains relatively untapped. Shipping and logistics, Ship and vessel building, maritime services, energy and initiatives within the framework of the blue economy create significant opportunity for business in these and connected sectors.
Political stability
The country has achieved political stability with a peaceful political transition in 2024 that resulted in the election of a new government with a strong mandate to direct the country towards economic, social and political transformation. For the first time in our history, the election results reflected a collective and unified voice from people of all regions of the country – North, South, East, West – and of all ethnicities and religions, in support of change and positive transformation. Our people have demonstrated their political maturity in how they effected radical changes through peaceful democratic means.
The current Parliament which was formed after the election is one of the most inclusive in our history, with a record number of women, representatives of different communities. This inclusivity represents Sri Lanka’s new path focused on upholding the rights of all its people irrespective of differences based on gender, ethnicity or other grounds.
Investing in the people
To attract foreign investment, Sri Lanka needs to further invest in its people, particularly its youth. In South Asia, Sri Lanka was a pioneer in introducing progressive education reforms such as free school education up to the university level. Sri Lanka’s education system has produced a wide array of economic and social benefits in Sri Lanka, including higher human capital and earnings, improved occupational attainment and social mobility. Free education up to university level by the state results in approx… 11,000 graduates annually in IT and Engineering. This has allowed the creation of a 600+ ICT export companies registered and employing 144,000 comprising a niche talent pool.
However, we need to further align education sector and the needs of the industries to achieve our development goals. The 2025 budget proposals have made historic budgetary allocations for health and education. The government’s policy emphasizes providing technical and vocational education from school to tertiary levels, allowing broader access to education and training opportunities that align with the countries development goals and labour market needs. It is in this context, there are many benefits for Sri Lanka in accessing opportunities in the vocational education sector in countries like Germany.
Already many Sri Lankan youth have entered vocational education sector in Germany and that they have created a positive impression in the industry. Therefore, I’m pleased to be here and explore options how to ensure Sri Lanka benefits through expanding opportunities in the vocational education sector in Germany. We are looking forward to exploring mutually beneficial collaborations with state and industry institutions in the vocational education sector in Germany.
Diversifying exports
Germany is important to Sri Lanka’s as its fourth-largest export market. Sri Lanka’s exports to Germany primarily consists of limited items such as textiles, rubber, tea and therefore needs to be diversified. In manufacturing, Sri Lanka remains committed to international sustainability standards of green economy, strong labour rights, and is one of the most ethical sourcing destinations. Sri Lanka’s key product to the EU under GSP+, apparel, earned the reputation of garments without guilt. We have strong economic relations reflected by more than 300 German brands in Sri Lanka. German quality and the Made in Germany brand is well known in Sri Lanka. We request German companies to look at Sri Lanka as there are over 160 German Companies who have invested and are operating in Sri Lanka. Many foreign and local companies report a strong worker commitment to excellence in Sri Lanka, with rapid adaptation to quality standards.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) has been established since 2018 and maintains a strong presence in Sri Lanka organising many projects and visits. OAV has a partnership with the Northern Chamber of Industries (NCI) in Jaffna and the Women’s Chamber of Industry and Commerce (WCIC) in Colombo.
Location in South Asia
Sri Lanka is keen to utilize its location in South Asia. Sri Lanka’s proximity to the Indian sub-continent positions the country as a gateway to a market of 1.9 billion people in South Asia. Sri Lanka provides great opportunities to enter into free trade and partnership agreements with several Asia’s trade powerhouses. I urge German investors to look at some of the ready to invest projects offered by the Board of Investment. One such example is the Port City Colombo which is a brand-new city development built as an extension of the Central Business District of Sri Lanka’s vibrant commercial capital, Colomb, offering planned city along the warm waters of the Indian Ocean.
Strength in diversity
Sri Lanka is a multi-ethnic and multi-religious country. Sri Lanka is a land that respects and celebrates the diversity of its people. The Government is committed to taking tangible steps in the interest of further advancing national unity and reconciliation. The Government has been actively working to develop infrastructure, support livelihoods and promote industries in the previously conflict affected Northern and Eastern Provinces, aiming to enhance connectivity and support regional development.
The Government is fully cognizant of the responsibility that accompanies the people’s mandate, including the people of the Northern and Eastern provinces, to fulfil their aspirations for a just, fair and prosperous society for all our citizens.
The continued encouragement and support of the international community and particularly our important development and economic partner countries such as Germany, will be important as we move forward on our path towards national unity, reconciliation and inclusive development.
In conclusion, I would like to thank OAV again for their invitation and for arranging many interesting engagements during my short stay in Hamburg. I hope that the City of Hamburg will continue to act as a pivotal link in strengthening Asia’s links with Germany.
Thank you.