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Sri Lanka on a path of economic transformation; exports key: Malik

Minister of Development Strategies and International Trade Malik Samarawickrama yesterday declared that Sri Lanka is now on a path of economic transformation and export development is an integral part. He made this observation during his speech at the 21st Presidential Export Awards ceremony. Following are excerpts:

Sri Lanka is now on a path of economic transformation, and an important part of that transformation is the export sector. Which is why today’s awards ceremony – recognising our export champions – is so important, and I am very glad to be here with you in this celebration.

Being a small island nation, exports have and will continue to play a crucial role in our economy. Our immediate goal for the next three years is to increase exports to $ 20 b by 2020.Achieving this ambitious task, in spite of the many challenges, is crucial to stabilise and strengthen our economy, and – as the recently launched Vision 2025 stated – enrich our country and our people.

From time to time, various governments have given attention to export development in varying degrees. But let me be clear – export development is a top priority of this Government and the presence of the President, in spite of his busy schedule, clearly underscores this point.

If we were to take a look back at Sri Lanka’s export performance over the years – between 2011 and 2016, exports were stagnant in dollar terms and for over fifteen years, exports have played a smaller and smaller part of the economy. From a share of 33% of GDP in 2000, exports declined to 12.7% of GDP in 2016. We cannot afford for this to continue, as exports are a lifeblood of our economy, especially as we have a limited domestic market.

A particular challenge facing Sri Lanka is that our export basket is heavily concentrated on a few markets and a few products. A recent study has shown that 44% of Sri Lanka’s exports are concentrated in just three markets – USA, UK and India. So far, Sri Lanka has seen limited success in exporting to key Asian markets like Japan, China, South Korea, and Hong Kong. These four countries are among the top 10 markets for exports in the world, accounting for 20% of the global export market, but accounted for only 6% of Sri Lanka’s exports. It is high time we made stronger inroads in Asian markets.

In terms of product composition, the study also showed that Sri Lanka’s two leading exports are not among the top ten product categories traded in the world. In most other Asian countries the two key export products fall within at least one of the top five products traded in the world.

Ladies and gentlemen – these are the challenges before us today, and these are the trends we must reverse.

We have begun to tackle these, proactively and systematically. One of the main initiatives is the National Export Strategy, being driven by the Export Development Board with technical support from the International Trade Centre. This initiative is probably the most ambitious and systematic export development drive our country has undertaken in many decades.

Following the first national consultation in April, which was inaugurated by the Hon. Prime Minister, teams of private sector leaders and public sector officials have been working together over several months to identify priority sectors, strategic and operational objectives, and priority actions. The N.E.S. doesn’t just look at traditional sectors, but emerging areas like electronics, leisure boats, spice concentrates, etc.

They have also identified several trade support functions – like trade information and promotion, innovation and R&D, logistics, and national quality infrastructure. Collectively, these measures will strengthen the competitiveness of our exports and help our exporters to improve products and improve marketing.

The overall vision statement of the National Export Strategy says it all: ‘Sri Lanka – An Export Hub Driven by Innovation and Investment’.

In addition to the National Export Strategy, we have embarked on broader trade policy reforms. Last month, the Cabinet of Ministers approved the adoption of a new National Trade Policy. This, too, is the first such initiative in Sri Lanka, and sets out a progressive trade reforms agenda that is anchored to our country’s national needs and national priorities. The new Trade Policy addresses four critical aspects:

l    Competitiveness through domestic policy reforms

lMarket access and trade facilitation

Macroeconomic balance, policy and institutional coherence

lTrade adjustment for firms and people

Another progressive step is the ratification of the WTO Trade Facilitation Agreement, which was done earlier this year. A National Trade Facilitation Committee has begun initiating an identified set of reforms for Sri Lanka so that our exporters can efficiently engage in a fast moving international trade system.

We are also conscious of unfair trade practices that our Sri Lankan businesses have to contend with, and this is why we have formulated a robust Anti-Dumping legislation, which will hopefully be passed within this year.

There are a host of other important measures the Government is taking to expand market access for our exporters. These include,

l    Securing the EU GSP+ concessions once again, so that the competitiveness of exports to the EU is improved

l    The ETCA with India, our largest trading partner, the largest market in the neighbourhood, and a rapidly growing middle class which can be a key market for us

l    Proactive engagement on the Belt & Road Initiative and the forthcoming FTA with China

lThe FTA with Singapore, which will be particularly useful for services trade and also investment

lAnd the Japan Investment Road Map

We have also begun accelerating development in key economic sectors

lPort & Shipping: The development of Hambantota and Trincomalee Ports as PPP Projects with FDI and the infusion of global know-how

lEnergy: Fast-tracking the introduction of LNG as a cleaner and cost effective energy source to overcome the impending power crisis. In consequence guaranteeing stable power at a fair cost and energy security.

lIndustry: Establishing new Export Processing Zones with private sector engagement

In a world of rapid technological change – that the World Economic Forum calls ‘The Fourth Industrial Revolution’, ‘business as usual’ will no longer work – Sri Lanka is faced with stiff competition from other exporters. Which is why we are helping our exporters to innovate and infuse new technology into exports.

The ongoing ‘Innovation and Entrepreneurship’ initiative – being done together with the World Bank – will make national R&D institutions more relevant and more useful to exporters who are looking to develop new products. This initiative will also improve the enabling environment for export-oriented entrepreneurs and start-ups to unleash their potential.

So, as you can see there are many ongoing initiatives that are working towards improving Sri Lanka’s export performance. The gains from all these initiatives won’t be seen overnight and won’t come automatically. We have to work together, and work hard, to reap the benefits of these new agreements and new opportunities.

The Government can only set the right policies, undertake some key initiatives, and create an enabling environment. It is the private sector’s role now to take advantage of this conducive climate- to support this agenda, and help to achieve national economic goals.

The same way that the Government has begun implementing collaborative and progressive strategies – you too need to collaborate among your sectors, collaborate with government agencies, and implement progressive strategies to become competitive and higher value. Change your strategies, markets, and products, to meet the demand regionally, and globally. Use new technologies, new working practices, labour management, engage local experts, blend in foreign partnerships, and be innovative. We will support you in your efforts.

I congratulate today’s award winners, for their commitment to the country’s export agenda and for their excellence in their own sectors. I know the journey of an exporter is not easy. I was one of you, prior to assuming my current responsibilities. I understand your challenges, and I understand how much you have to work hard to break into new markets, to develop relationships with new customers overseas, and to sustain growth amidst a challenging external environment. But I know that by harnessing your collective expertise and energy, you can take advantage of the progressive policies and systems we are now putting in place and help Sri Lanka achieve its fullest potential.

As a Government, we have a vision for sustainable growth of our nation, and have utmost confidence in the ability of the private sector – particularly the export community – to be the driving force of this growth. We are committed to support in your endeavours!

Taken from – FT.lk

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Last modified: November 25, 2023