National Chamber of Exporters President Ramal Jasinghe is optimistic that that country’s export income is on the upward path and will reach US $ 11 billion mark by the end of the year.
“The road to progress is paved with good intentions.” However, exports as a percentage of GDP currently stands at 12.7 % having progressively declined from over 30% since the year 2000. Overall, our exports have been stagnant or have recorded an erratic and declining trend since 2010, reaching 10.3 billion USD in 2016.
“Nevertheless, the latest figures up to the end of July 2017 shows a welcome positive turnaround achieving USD 6,521.9 Mn ( 6.5 Billion) compared to USD 6013.1 mn (six billion) for the comparative period in 2016, reflecting a growth rate of 8.4%, although due to the low base of last year – this trend shows some encouragement,” he said.
If the same trend continues exports will reach 11.1 bn USD by the end of this year. On this premise assuming a growth rate of 10% over the next 3 years exports could reach USD 15 Bn. by 2020 as opposed to the national target of USD 20 Bn. by 2020, for which achievement requires an annual growth rate of 20%.
It is noteworthy that fisheries products have achieved a growth rate of 38.6%, and agricultural products including plantation crops have achieved a growth rate of 17.2% during the first seven months of the year, however our main export sector of textiles and garments has continued to record a negative trend with a decline of 3% in spite of regaining of the GSP+ facility.
It is also pertinent to note that according to the Central Bank Annual Report for 2016, industrial production as a percentage of our GDP is a mere 26.8% and of that figure, only 35.2% of this total production is exported while the major portion of the Industrial output is consumed domestically.
This highlights the fact that the expected gain of USD 300 mn due to the regaining of GSP+ is simply not there for the taking, but that the export sector will have to compete hard to regain lost ground, with the assistance of the government.
This underscores the necessity to implement without delay the trade and economic reforms the government has embarked upon, and also have the necessary measures in place to assist and incentivize the export sector on an urgent basis if the country is to reach its envisaged goals.
The Chamber on its part will do its best to support the State in its endeavors.
“We applaud the efforts of the government in launching ‘Vision 2025’ based on economic development with reconciliation to make Sri Lanka a rich country by 2025 by transforming into a hub in the Indian Ocean with a knowledge based highly competitive social market economy, as well as an export oriented economic hub, securing opportunities for local businesses in global production networks (GPNs),” Jasinghe said.
“This effort we believe will be spear headed by the recently set up National Economic Council chaired by President Maithripala Sirisena,” he said..
The Chamber is actively engaged with the Export Development Board as well as other State Agencies related to exports to complement their efforts in achieving national export targets, which has been recognized by the Government as a priority for Economic Development.
The initiative of the Government to be a signatory to the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO) is a noteworthy achievement, with its ability to strengthen trade transactions through proper implementation.
“We trust the National Trade Facilitation Committee which has already been set up and functioning will move speedily in this direction.
In this regard, I am pleased to note that the Chamber has collaborated with the ITC in Geneva to develop the course material for Professional Courses related to Trade Facilitation, for which purpose the Secretary General of the Chamber is functioning as the National Consultant,” Jasinghe said. The Chamber is playing an integral role in formulating the National Export Strategy (NES) along with the EDB.
“We look forward to the findings and effective implementation of this strategy to achieve the National Export Goals by 2020,” he said.
The Chamber has contributed to the development of the New Trade Policy (NTP) which has received cabinet approval and provides for the broad policy framework, and the necessary regulatory mechanism related to international trade, particularly exports, (although measures such as Anti- Dumping laws are still to see the light of day) as well as approaches to attract the much needed Foreign Direct Investments (FDIs) which we see as lagging behind, compared to our competitors in the Asian Region itself.
In this regard we trust that the measures that need to be put in place to implement the Blue Print will see effective implementation without delay.
The Chamber has also provided inputs to the relevant State authorities regarding the concerns of our exporters on the proposed Economic and Technical Cooperation Agreement (ETCA) with India and the Free Trade Agreements with China and Singapore that are being negotiated.
“We trust that the agreements to be signed will effectively address the concerns of our exporters particularly related to Non-Tariff Barriers (NTB) as well as the means to access the lucrative Asian Markets in China and India, and also to attract the much needed FDIs to do so,” Jasinghe said.