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The Chinese have agreed to provide financial and technical assistance to help Sri Lanka launch a communications satellite, despite the fact that many think it is beyond Sri Lanka’s capacity to enter the space-race.

"Since 2007, Sri Lanka has been trying to launch a communications satellite. China has agreed to provide financial and technical assistance," Executive Director of the Institute of Policy Studies, Dr. Saman Kelegama said yesterday.

Dr. Kelegama said negotiations between the two governments were ongoing with regard to reaching an agreement on the project.

Dr. Kelegama made these comments addressing the Sri Lanka-China Business Forum.

Last May we reported that the government has begun work on a space programme hoping to launch two communication satellites quoting the Director General of the Telecommunication Regulatory Commission (TRC) of Sri Lanka Priyantha Kariyapperuma.

"The University of Surrey specializes in satellite technology having created about 35 satellites. They have made a presentation to President Mahinda Rajapakse and have entered into an agreement to transfer technology and knowledge to our universities," he told the Island Financial Review.

Kariyapperuma said a consortium of vice chancellors from universities with engineering faculties have been formed for this purpose.

He said the government was aiming at launching two communication satellites—a lower earth orbit satellite used mainly for images and a geo stationary communication satellite.

The two satellites will be used not only for communication purposes but also for disaster management, agriculture planning, irrigation planning, town/urban planning and coastal conservation.

"We hope to embark on these two projects by this year. However, the focus of the government right now is to stabilize the North and East so we have not worked out a tentative schedule as yet," Kariyapperuma said.

He said the low earth orbiting satellite could be financed with domestic funds particularly from the Telecommunication Development Fund. The private sector will also be called to contribute to the development of the two satellites.

China ‘s economic growth has been phenomenal and global and local analysts expect China to be the most powerful economy in years to come—in fact many pin their hopes on China (and to some extent India) to take the world out of the global financial crisis.

According to Dr. Kelegama, China could soon replace Japan as the biggest aid donor.

"China increased its aid to Sri Lanka from a few million dollars in 2005 to about one billion dollars in 2008," he said.

In terms of FDIs, China is ranked fourth with US$ 101.2 million in 2008.

The Chinese are also funding many of the large scale infrastructure projects—notably the Hambantota Port under construction by the Chinese themselves.

Trade between the two countries has doubled over the last 5 years from US$ 660 million to US$ 1.13 billion, making China the second largest importer and the 13th largest export destination for Sri Lanka’s exports.

Economists in Sri Lanka say Sri Lanka should latch on to India and China and move away from over-relying on traditional export markets in Europe and the US.

"We have paid far too much attention to the export markets in the US and now we need to move towards the Asian giants, India and China. We have had an over dependence in the US market for our exports for too long," Prof. A. D. V. De S. Indraratna, President, Sri Lanka Economic Association told press recently.

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