Diversifying export basket, a top priority for EDB | Sunday Observer

Diversifying export basket, a top priority for EDB

The Export Development Board (EDB) is working towards an ambitious yet achievable target of US $ 18.5 billion this year, up 15% from last year. To this end, EDB Chairman Prabhash Subasinghe made a clarion call to all stakeholders, government agencies in particular, to make a concerted effort to meet the target.

Stressing the need to make exports a national priority, he said, “We have not changed our export basket during the past 40 years, and our exporters face a long list of challenges which have gone unaddressed over many years. We cannot move forward this way.”

“Our exports to GDP ratio has to increase to at least 30 percent from the current 22 percent, and for that it is essential for all State institutions to support the EDB so that we can solve issues faced by exporters and boost exports,” he said at the first interactive session with the media as the EDB Chief in Colombo last week.

According to EDB data, last year Sri Lanka’s total merchandise and service exports amounted to $ 16.14 billion up 1.44% from 2018. The composition was merchandise exports - $ 11.9 billion, up 0.13% and service exports - $ 4.2 billion, up by 5.3% compared to 2018. The EDB originally targeted $ 18.5 billion in exports for 2019, and the estimated performance reflects achievement of 87% of the goal.

Lagging behind its regional peers in terms of export performance, Sri Lanka’s export revenue reached US$16.1 billion in 2019, falling behind the year-end target of US$ 20 billion, which was revised to US$ 18.5 billion mid-year following the deadly Easter Sunday attacks.

Last year’s earnings saw only a 1.5 percent increase compared to the 2018 figure, with merchandise exports remaining almost stagnant, fetching US$ 11.9 billion and services reaching US$ 4.2 billion.

Sri Lanka’s export performance remains weak when taking into account the export earnings posted regional countries. Singapore, Vietnam and Thailand which fetched US$ 323 billion, US$ 441 billion, US$ 242 billion and US$ 249 billion respectively.

Acknowledging that Sri Lanka’s export performance is dismal, Subasinghe stressed the need to make exports a national priority and outlined a number of strategies the EDB would adopt to realise this year’s target, out of which diversifying the export market and basket remains a top priority.

“The diversification had been an area of priority over the last few years, but little progress has been made in this regard thus far despite various efforts. In addition to supporting existing exporters and grooming new entities to engage in international trade, together with the Board of Investment (BOI), plans are afoot in bringing in anchor investors to generate export-led foreign investments since the sector is in much need of knowledge and capital,” he said.

The EDB will work to achieve the Government’s vision for a prosperous nation, and for that as an export facilitator, the agency will carry out a number of activities that will align to the three key policies of the government-friendly and non-aligned foreign policy, technology-based society, and people-centric economic development.The EDB will also focus on SME development and value addition as well.

He also shared that while there is a push to sign an FTA with China in the coming 12- 18 months — an essential factor if the country is to witness a boost in its exports and is actively exploring an FTA with the Association of Southeast Asian Nations (ASEAN) which is as just as important as Sri Lanka’s trade within the region accounts only for 9.4 percent of total exports.

The EDB will help to implement the National Export Strategy (NES), which has been endorsed by the Government, and that key sectors that have been identified as NES priority areas, will be assisted, he said.

The EDB will work with the Foreign Affairs Ministry and Sri Lanka Missions abroad to make inroads to existing and untapped markets.

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