Saving of time and money
Sri Lanka lags behind many competing countries and loses heavily on opportunities to gain from trade due to the time taken to comply with documentation, a top official of Verite Research told a forum on ‘Taking paper out of Sri Lanka’s trade’ last week.
In Sri Lanka it takes around 76 hours to comply with documentation for exports while the same task is done in Singapore within four hours, according to the World Bank Doing Business Index 2016.
Sri Lanka lags behind India which takes 61 hours, Pakistan 62 hours and Malaysia 10 hours to comply with documentation for exports.
“Senegal being a poor country has adopted a paperless documentation process to facilitate and speed up trade which is something that Sri Lanka should take note of and expedite the paperless documentation process to boost trade,” an economist of Verite Research said.
Malaysia has reduced the time from 12 hours under the manual documentation process to 15 minutes under the electronic system which is 50 times faster.
Head of Economic Research, Verite Research, Subashini Abeysinghe said paperless trade is universally accepted as a means to save time and money in carrying out trade.
“Singapore is a classic example on carrying out trade within a short time due to the success of trade net which enables parties to communicate with multiple government agencies. Singapore launched the single window system long ago,” she said.
Singapore is ranked among the top three countries in the Doing Business and Logistics Index.
Researchers said it is a nightmare for international traders to conduct business with Sri Lanka due to the cumbersome documentation process. International traders have to deal with a large number of institutions and comply with several regulations.
“Sri Lanka initiated the paperless documentation process several years ago, but has failed to implement the system which would save time and money,” an economist said. A Verite Research economist said Sri Lanka’s shortcomings in moving to paperless trade does not stem from a lack of activity. It’s attempt in this regard could be traced back 20 years when the national EDI Committee was set up in 1995 with a representation of 20 public and private organizations to serve as a forum on adopting electronic data interchange.
Since then, there have been several attempts to revive the paperless trade initiative. However, they said all efforts have been futile. The most recent effort to implement a paperless trade platform was in May this year where the Ministry of Finance and the Sri Lanka Customs launched the ‘Single Window Platform’ to facilitate electronic communication between traders and government agencies.
However, this covers only a few government institutions and has failed to replace the need for a duplicate process of manual documentation in multiple copies. This is due to signatures accepted only in hard copies.
Paperless trade refers to a trade process where all contracts and documentation is handled electronically with little or no use of documents. Quick handling of documents which saves time, improved global competitiveness of Sri Lanka’s trade, reduced processing cost to government and for businesses better document tracking and predictability in processing, are some of the benefits in adopting a paperless trading system.
Electronic signatures are a method of verifying the sender’s intent to sign a document that is transmitted electronically. There cannot be a paperless system in Sri Lanka without accepting electronic signatures. The law enabling accepting electronic signatures was passed in 2006 with the enactment of the Electronic Transaction Act No 19 of 2006 (ETA). The Act facilitates acceptance of all forms of e-signatures, electronic documents and electronic contracts in all but a few specific transactions.
Despite legal backing, Sri Lanka has still not implemented the provisions of the Act.
“Going through the documentation process in a public institution is a nightmare.
Even today, one could see stacks of files piled up in rickety shelves accumulating dust in public institutions. Such a system of documentation is a hindrance to traceability and accountability of vital information,” a Verite Research official said.
“Lack of funds, competent people, time and resources are no excuses to implement the paperless documentation process,” Abeysinghe said.
Officials of the Import Section of the Ceylon Chamber of Commerce who were present at the forum cautioned, that if no action is taken to implement the ETA, Sri Lanka would plunge further down in the Doing Business Index making the country non-competitive for trade and foreign direct investments.