The crucial need is to increase production capacity of the export sector through the infusion of investments, local and foreign, especially Foreign Direct Investments (FDIs), said the President National Chamber of Exporters, Ramya Weerakoon.
“Since FDIs for export manufacture have been avoiding Sri Lanka, compared to competitor countries in the Asian region, and also since there are insufficient local investments, there is a need to identify the reasons and take corrective action to attract sufficient foreign funding,” she said.
The export sector performance has been well below expectations. Therefore, a strong push is needed for the sector to enhance capacity in terms of value and volume. The sector is in need of capital investment as well as technological intervention to reach desired capacities in achieving set targets, she said.
According to the published information of the Central Bank of Sri Lanka, up to the end of the Third Quarter for 2019, performance has been well below the annual average of exports in the previous years.
The growth in merchandise exports had been only 2%, compared to the average growth of around 10% in the previous years. This, however, excludes the value of Services Exports comprising mainly ICT exports. The sharp decline in performance may be due to economic disruptions, among other factors.
“Political and macro-economic stability along with the establishment of security, and law and order in the country are essential factors for conducive performance of business, especially exports.
Predictable medium to long term policies related to business, and especially exports are also needed to increase investments in the export sector and expansion of production for export is essential in this regard,” Weerakoon said.
Expressing confidence in achieving a higher level of performance this year, Weerakoon said that in terms of the National Exports Strategy (NES) prepared by the Export Development Board (EDB), which commenced implementation last year covering the five-year period 2018 to 2022, the target for 2020 is USD17.4 billion.
The export fraternity is working towards this ambitious target and will contribute positively in reaching the set goals. With a fresh hope of strong political stability and patronage, the sector is poised to make a strong come back, she said.
“The crucial need for the export sector to reach the target is to increase production capacity of the sector through investments both local, and especially Foreign Direct Investments (FDIs). Since FDIs for export manufacture have been avoiding Sri Lanka, compared to competitor countries in the Asian region, and also since there are insufficient local investments, there is a need to identify the reasons and take corrective action,” she said.
To this end, there is a need to diversify export products and services, especially FDIs which would involve technology transfers for high-end technical products and services.
Elaborating on the future plans of the NCE, she said that the Chamber will be geared to the National Policy Framework of the new government in terms of the document titled ‘Vistas of Prosperity and Splendor’.
The Chamber on its part will complement the objects and programs of the government to develop the export sector, and will also lay emphasis on quality products and ethical business practices of enterprises in the sector, in keeping with modern trends in international trade.