Public/private : stakeholders discuss export strategies | Sunday Observer

Public/private : stakeholders discuss export strategies

The Government’s vision is for Sri Lanka to be the next economic success story in Asia.

Thus, exports play a vital role, if not the only option available for the country.

Although the fundamental aspects have been discussed at almost all forums and throughout the past decades, Sri Lanka has been unable to reap the benefit of exports due to a number of limitations, Minister of Development Strategies and International Trade, Malik Samarawickrama said in a message to mark Sri Lanka’s first National Export Strategy symposium.

“Sri Lanka’s growth since independence had a high level of volatility with the annual growth rate averaging at around 4.7%. Above 7% growth has been witnessed during short spells, especially from 2010 to 2012, following the end of the conflict,” he said. The symposium was held on Thursday and Friday in Colombo.Exports too witnessed a high growth during this period. However, it has declined steadily from 27% of GDP in 2000 to 13.4% of GDP by 2015.

Also the expected FDI rate was 4.5% of GDP, but in reality, it was only 1.4% Post-conflict Sri Lanka had a significant level of optimism in terms of export growth, which was short-lived. Therefore, achieving sustained high growth is a serious challenge.

The Government has taken this challenge We are in the process of transforming from a debt–financed public investment and import substitution economy to a private sector-led export and FDI-led development strategy.

Each country specializes in a particular stage of production sequence and trade the value-added components which ultimately result in final product.

Integration into the global production network is vital for Sri Lanka to switch to export oriented industrialization where economies of scale could be reaped and more foreign exchange earned.

The slow growth of exports is also due to the very little diversification of the product basket.

Therefore, it is imperative that Sri Lanka finds new markets and carve out easy market access.

The deepening of the existing FTA with India and Pakistan and working out new FTA’s with growing Asian countries such as China and Singapore will create access to a market of over three billion.

Sri Lanka’s agreements with these countries will give companies located in Sri Lanka preferential access to a large market.

Broadening and deepening the India-Sri Lanka FTA via the proposed Economic and Technology Co-operation Agreement (ETCA) will assist Sri Lanka to address most of the current problems it is facing in fully utilizing the FTA.

The ETCA negotiations are addressing outstanding non-tariff barriers in the Indian market as well as many other existing procedural barriers and delays in Indian ports of entry.

For export promotion FDI’s will support and enhance the supply capacity of and make the best use of market access gained via FDIs. These are the avenues for new business and quality products.

Making this transition from debt-financial public investment and import substations to private sector led export and FDI–based development strategy remains challenging.

In this context, developing of a national strategy for exports is a key component of the development agenda of the Government. It will focus on a number of priority sectors, selected based on quantitative and qualitative analysis of Sri Lanka’s export competitiveness.

It will also support the economic vision of strengthening the competitiveness of the country’s private sector.

A number of international organizations such as the World Bank, ComSec, Harvard, CID (Centre for International Development) and ADB have undertaken several studies and identified different sectors as promising and future visionary sectors to boost export growth.

Key competitiveness constraints and opportunities at national level and along the identified priority sectors, value chains, including selected service sectors, as well as cross-sectoral fundamental areas in institutional infrastructure for export promotions, logistics etc. will also be looked at.

This national endeavour is spearheaded by the Sri Lanka Export Development Board under the strategic guidance of my Ministry (MODSIT) and with the involvement of the private sector.

Sri Lankan companies, especially SME’s generally lack the knowledge and experience needed to adopt and adapt new technologies.

It is evident that we cannot tackle all the challenges in isolation. We need to come on to one platform where we can have a holistic approach.