World Economy and Trade

Sri Lanka’s Graphite and Turning Tides in International Electric Vehicle Value Chains

The global demand for Electric Vehicles (EVs) is projected to reach a staggering 80 million units by 2050, with the United States (US) alone expected to demand one million of these annually. This rising global demand will lead to a hike in the need for natural and synthetic graphite. Considering the US imposing restrictions on Chinese imports, non-Chinese graphite suppliers, including Sri Lanka stand to gain. A recent IPS publication launch and discussion event titled ‘Trade Wars in Electric Vehicle Supply Chains: A Win for Sri Lanka’s Graphite Industry?’ featured an engaging discussion with key figures in Sri Lanka’s mineral and EV component manufacturing industry. This article is based on the discussion highlighting implications and opportunities for the country’s graphite industry.

Unlocking Trade Potential: How the Sri Lanka-Thailand FTA Paves the Way for Enhanced Bilateral Trade

Thailand became the second Regional Comprehensive Economic Partnership (RCEP) economy to sign a free trade agreement (FTA) with Sri Lanka, following the FTA signed earlier with Singapore. A major goal of an FTA is to lower trade costs by reducing border tariffs and eliminating behind-the-border barriers for competitively traded products. This article assesses the coverage and potential of the Sri Lanka-Thailand FTA (SLTFTA) tariff liberalisation in increasing bilateral trade.

Between Homefront Policies and Global Developments: Sri Lanka’s External Sector Outlook

Having weathered a challenging period marked by a deep economic crisis, Sri Lanka is now demonstrating positive signs of an economic upturn. Still, amidst limited homefront policy alternatives against an unfavourable global backdrop, a critical question arises: how will Sri Lanka’s external sector cope in the face of these challenges?
Notably, import controls, initially imposed in response to the dearth of foreign exchange liquidity in the domestic market, are being largely eased. The government is actively seeking to forge partnerships with regional giants, aiming to strengthen trade relations through Free Trade Agreements (FTAs). Nevertheless, in the broader global context, the rise of geopolitical rivalries, slow growth and contracting demand in key markets create multiple uncertainties for Sri Lanka’s external sector recovery.

Sri Lanka’s Economic Policy Choices: From Stabilisation to Growth

Sri Lanka has faced a turbulent economic journey in recent years, with 2022 witnessing an unprecedented crisis marked by a staggering 8.7% GDP contraction. The economy slowly but steadily pulled back from the abyss over the course of 2023. These positive developments are a result of the implementation of economic stabilisation measures and groundwork for institutional and regulatory reforms to support future growth. But there are concerns about the impact on the most vulnerable groups. As a country that faces years of weak growth, IPS’ ‘Sri Lanka: State of the Economy 2023’ report, explores the complex policy choices Sri Lanka faces as it navigates the path to economic recovery.

Sri Lanka’s Graphite: A Potential Player in the Global Electric Vehicle Revolution

Sri Lanka has a rich history of mining and exporting graphite, which thrived during the World Wars, hitting 35,000 metric tons in annual exports. The vein graphite produced by Sri Lanka stands out for its remarkable purity, flawless crystal structure, and strong electrical conductivity, making it suitable for various commercial uses. However, in 2023, only 2,792 metric tons were exported, yielding approximately USD 6 million in revenue. The emerging trend towards electromobility on a global scale presents fresh opportunities to revive Sri Lanka’s graphite industry. The newly established Chamber for Mineral Exporters has also emphasised the importance of well-defined policies to harness the untapped potential of the mineral sector.

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