By Asoka S. Seneviratne –

Prof. Asoka.S. Seneviratne

“Alone we can do so little; together we can do so much.” ~ Helen Keller

In economic growth and development, international monetary cooperation is vitally important. Among such cooperation, bilateral collaboration (i.e., between two countries) is the most effective and result-oriented. Bilateral cooperation refers to collaborative efforts between two entities, typically countries, to achieve shared goals or objectives. It involves agreements and actions focused on specific areas of mutual interest, such as (a) trade, (b) investment, (c) development assistance, (d) sports and cultural engagement, or exchanges.

In 2021, New Zealand established its High Commission in Colombo, Sri Lanka, marking a significant milestone in the bilateral relations between the two countries. This development reflects the warm and expanding relationship, underpinned by robust growth in trade and the potential for diversification across various sectors. The longstanding trade relationship, particularly in dairy exports from New Zealand to Sri Lanka since the 1990s, has been a cornerstone of their economic ties. Beyond trade, both nations are exploring opportunities for collaboration in education, tourism, sports, and cultural exchanges, aiming to deepen people-to-people connections and mutual understanding.

The establishment of the High Commission signifies New Zealand’s commitment to strengthening its presence and engagement in the Asia-Pacific region, recognizing Sri Lanka’s strategic importance. It also opens avenues for enhanced cooperation in areas such as investment, development assistance, and regional security.

In a reciprocal move, in January 2025, Sri Lanka appointed its first resident High Commissioner to New Zealand, Mr. Prasanna Gamage, who presented his credentials to the Governor-General of New Zealand. This development marks a significant milestone in bilateral relations, facilitating enhanced diplomatic engagement and cooperation across various sectors. It is observed that the Sri Lanka High Commission in Wellington, New Zealand, is further solidifying the diplomatic relationship and facilitating closer collaboration on shared interests. Overall, the opening of the Sri Lanka High Commission in Wellington represents a forward-looking approach to bilateral relations, emphasizing mutual benefits and a shared vision for future cooperation. In other words, Sri Lanka and New Zealand have cultivated a robust and multifaceted partnership encompassing trade, education, development cooperation, and cultural exchange.

Indeed, there was a significant gap because the Sri Lankan High Commission was not established in New Zealand until recently, despite the presence of a New Zealand High Commission in Sri Lanka. The external shock created by the Trump administration, which increased tariffs from 10% to 44%, is a substantial blow to Sri Lanka’s development efforts in many ways. Strengthening bilateral economic cooperation is one solution to mitigate the effects of the aforementioned tariff increase. Given this situation, the Sri Lankan High Commission in Wellington needs to focus on and explore new areas for economic cooperation while also strengthening any existing partnerships.  This is indeed a top priority.

New Zealand & Sri Lanka Trade and Economic Relations

The trade relationship between New Zealand and Sri Lanka is longstanding and continues to grow. In 2023, New Zealand exported goods worth approximately $252 million to Sri Lanka, with concentrated milk products accounting for a significant portion of these exports. This underscores the importance of dairy trade in the bilateral economic relationship. To further enhance cooperation in the dairy sector, the two countries signed the Dairy Cooperation Arrangement (DCA) in 2013. This agreement aims to support the development of Sri Lanka’s dairy industry through public-private partnerships, emphasizing the creation of a stable trading environment and the sharing of New Zealand’s expertise in dairy farming, which is of vital importance to Sri Lanka.

Beyond dairy, there is ample scope for expanding trade in other sectors, including education, tourism, and sports. Collaborations between educational institutions, such as those in veterinary education and pilot training, underscore the potential for diversification in bilateral trade and cooperation.

The main products New Zealand exported $252 million to Sri Lanka in 2023 were concentrated milk ($237 million), cheese ($2.58 million), and poultry ($2.49 million). In the same year, Sri Lanka exported $41.2 million worth of goods to New Zealand. The primary products that Sri Lanka exported to New Zealand included tea ($6.87 million), knit gloves ($2.18 million), and awnings, tents, and sails ($1.75 million). In 2024, New Zealand’s exports to Sri Lanka reached US$203.4 million. Sri Lanka’s total import value from New Zealand amounted to $216.37 million in the same year. New Zealand ranks as the 52nd export destination for Sri Lanka.

Given the above, Sri Lanka must commit to exploring ways to enhance its exports to New Zealand, initially aiming to fill the short- to medium-term gap and ultimately targeting at least $500 million in exports to New Zealand in the long run. This presents a challenge, but it is achievable. Regarding this, instead of exporting resource-based products, it is essential to focus on exporting knowledge-based products, as explained in my article, “AKD/NPP Government: Ways & Means Of Absorbing The External Shock In International Trade“

People-to-People and Cultural Connections

Diplomatic relations between New Zealand and Sri Lanka were established in 1961, laying the foundation for strong people-to-people links. These connections are evident in the significant Sri Lankan diaspora (estimated at 0.4% of the population) in New Zealand. The diaspora community is diverse, comprising Sinhalese, Tamil, and Muslim individuals, many of whom hold professional qualifications and work in various sectors, including healthcare, business, and retail. A substantial number of students must also be noted. Above all, they contribute to the multicultural fabric of New Zealand society. The two nations share commonalities as island countries and members of the Commonwealth, fostering mutual understanding and collaboration. A friendly rivalry in cricket further strengthens cultural ties, bringing communities together through shared sporting passions.

Development Cooperation and Sustainability

New Zealand supports development initiatives in Sri Lanka focusing on agriculture, climate resilience, and social cohesion. Through the Dairy Cooperation Arrangement, New Zealand assists in improving the productivity of Sri Lanka’s dairy sector, benefiting smallholder farmers and promoting sustainable agricultural practices. Additionally, New Zealand contributes to the Global Community Engagement and Resilience Fund (GCERF) in Sri Lanka, which funds grassroots organizations working to build inclusive communities and prevent violent extremism. This support underscores New Zealand’s commitment to fostering stability and resilience in Sri Lanka. Through partnerships with non-governmental organizations, New Zealand also supports projects aimed at enhancing agricultural livelihoods, improving access to clean water, and building capacity in carbon market mechanisms, thereby contributing to Sri Lanka’s achievement of its Sustainable Development Goals.

Conclusion

Strong trade ties, cultural connections, and collaborative efforts in development and sustainability characterize the dynamic and evolving relationship between New Zealand and Sri Lanka. The establishment of diplomatic missions and ongoing partnerships across various sectors reflects a shared commitment to enhancing bilateral relations for the benefit of both nations. Because of the impact of the tariff increase by the Trump administration, based on knowledge based production, it is essential that Sri Lanka High Commission in Wellington focus on and strengthening the existing bilateral relations while exploring new arrears in (a) trade, (b) investment, (c) development assistance, (d) sports and cultural engagement, or exchanges. Regarding trade, a $500 million long-term target can be pursued.

*The writer, among many, served as the Special Advisor to the President of Namibia from 2006 to 2012 and was a Senior Consultant with the UNDP for 20 years. He was a Senior Economist with the Central Bank of Sri Lanka (1972-1993) , asoka.seneviratne@gmail.com