Trade adjustment policy will help industries excel in global market, says PM | Sunday Observer

Trade adjustment policy will help industries excel in global market, says PM

Pic: Hirantha Gunathilaka
Pic: Hirantha Gunathilaka

Sri Lanka, for the first time, will have a trade adjustment policy, which will be in force soon, to help local industries to be competitive and excel in the global market, Prime Minister Ranil Wickremesinghe told the gathering at the launch of the National Export Strategy (NES) at Temple Trees last week.

“The enterprises in the country should be assisted to adjust to the trade environment and meet the expectations of global consumers and thereby boost export earnings,” the Premier said.

He said the legislation to commence a Single Window platform to facilitate trade and investment and improve the Ease of Doing Business level in the country will be introduced by the government to enhance trade which will create better jobs for the people.

Tax benefits are applicable for domestic industries as well to be competitive, the premier said, while urging the country to take a cue from Vietnam, Singapore, Malaysia, Thailand and Bangladesh which have developed their economies having opened up much later than Sri Lanka.

“In 1977, the government launched the export strategy by initiating the open market economy. We were to open up the economy first but those who did it in the second round including China and Vietnam developed the country by focusing on export led growth,” the premier said.

He recalled the 200 garment factory program launched by President Premadasa which helped the country go up in the value chain. Thereafter we neglected our exports and other key sectors that supported the economy.

“Look at Vietnam and even Bangladesh. Where are they and where are we today. They opened up their economies after us. We have given enough excuses for not performing. Why have we not provided better employment and a better lifestyle to people? Why do youth have to go to the Middle East for jobs? This is where no the National Export Strategy comes in to play to help the country go up in the value chain,” Prime Minister Wickremesinghe said.

He said the NES is aimed at developing the export sector under a five year strategic plan which is to improve capacity of exporters and improve export performance.

The NES, a blueprint for achieving increased exports, enhanced regional cooperation and job creation aims at achieving US$ 28 billion in export earnings by 2022.

According to a forecast by PricewaterhouseCoopers, Vietnam may be the fastest growing economy in the world with a potential annual GDP growth rate of about 5.1 percent which would make its economy the 20th largest in the world by 2050. Poverty in Bangladesh during the past decade dropped by around one third with an improvement in human development index, literacy, life expectancy and per capita food consumption. With economic growth close to six percent a year over 15 million of its citizens have moved out of poverty since 1992.

Speaking further the premier said the government signed a free trade agreements with Singapore although some shout about the free movement of people that would affect us. Singapore had not made any issue about the FTA which will cover the whole Bay of Bengal. The industrial zones, the Enterprise Sri Lanka program and the single window operation for trade and investment will boost economic growth.

Minister of Development Strategies and International Trade Malik Samarawickrama said the NES strengthens the country’s ongoing shift in the economic growth model from one that was dependent on debt fueled public infrastructure spending to a growth driven by private enterprises, exports and foreign direct investments.

“Evidence proves that countries with greater level of openness have better living standards and economies with a wider export basket have recorded higher economic growth,” the Minister said.

However, the minister said certain elements within the country are trying to pull the country in the other direction. We do not want a country that inward looking and isolated from the rest of the world. The inward looking protectionist trade policies must change. Our medical gloves are used by world renowned surgeons and our apparels by sports starts across the world.

“The world trade landscape is changing at dizzy speed. The launch of the NES is a timely move to build capacity among exporters and improve competitiveness in exports which should be every ones business and not the job of one ministry or an institution,” Samarawickramasaid.

International Trade Centre (ITC) Executive Director Arancha Gonzalez said she would want to see Sri Lanka’s export earnings going beyond US$ 28 billion by 2022 and this has to be the job of everyone in the country.

“When I think of Sri Lanka I see a country with rapid transformation with widely changing opportunities. Emerging Asia which has an annual growth rate of around six percent is strategically positioned to serve the people in the region,” Gonzalez said.

She said NES sets out a strategy to address competitiveness, modernize regulatory systems and attract investments to invigorate the value chain.

“Its worth implementing it as it will mean additional US$ 28 billion from now up to 2022. The advisory and monitoring committees to coordinate and implement re-affirms Sri Lanka’s commitment implement reforms. NES is a clear signal to Sri Lanka’s development partners that the country is on a path to bring about prosperity driven by a vibrant export sector,” Gonzalez said.

EU Delegation to Sri Lanka and Maldives Charge d’ Affairs Paul Godfrey said if Sri Lanka is to achieve its ambitious target of being a regional hub it has to effect reforms to impact the business environment in the country.

“The World Bank’s doing business index on Sri Lanka and the corruption index need to be addressed. The EU will partner and support the government to make the 2025 Vision a reality,” Godfrey said.

Export Development Board Chairperson Indira Malwatte said what is important is the implementation of the NES instead of allowing it to be lying on shelves.

“The NES should be a living document and it will be so because it will be driven by exporters and exporters to be and the government,” Malwatte said.