Sri Lanka has notably seen a weakening of its export capacity, with its export to gross domestic product (GDP) ratio falling to a low of 17% in 2012, Exporters’ Association of Sri Lanka Chairman Rohan P. Daluwatte highlighted.
“This clearly indicates Sri Lanka’s declining share in the global export market. In 2012 earnings from exports contracted by 7.4% and further continued to contract by 6.6% year on year during the first five months of 2013.”“Increased cost of fuel and energy has been a major drawback on industries and businesses. Sri Lanka is one of the countries which has highest electricity tariff in the region. This high tariff in turn has made cost of all goods high, making the products uncompetitive,” stated Daluwatte at EASL’s 16th Annual General Meeting held recently.
At the 16th Annual General Meeting Rohan P. Daluwatte was elected as Chairman of Exporter Association of Sri Lanka for the year 2013/2014. Sarada De Silva and Fazal Mushin were elected as First and Second Vice Chairmen.
“Four years after the onset of the global financial crisis (GFC), global economic growth weakened further in 2012 pushing several advanced economies into double dip recession, while adversely affecting the economic growth of most other countries. Growing number of advanced economies experienced downward spiralling dynamics due to high unemployment, sluggish domestic demand, high public debt burdens, heightened sovereign risks and fragility in the financial sector. Further, growth in major emerging markets and developing economies also decelerated notably. Meanwhile growth in most low income economies performed relatively better in 2012,” the chairman added.
“Central bank has reported a growth rate of six per cent in the first quarter of 2013 and it is said that they are on track to achieve the projected 7.5% growth rate for 2013. Alongside, IMF has projected the economic outlook of Sri Lanka to grow by 6.8% this year and 7.2% in 2014,” he further added.
Sri Lanka Export Development Chairman and CEO Bandula Egodage said, “The Exporters’ Association which represents about 80% of exporters in the country, is the foremost body for exporters in Sri Lanka. We highly appreciate the contribution of the association towards export development efforts of the country.”
“The government’s vision as envisaged in the ‘Mahinda Chinthana’ is to transform Sri Lanka into a strategically-important economic centre of the world. This would then lead to socio economic development of the country. The export sector which contributes 17% to the GDP of the country clearly plays an important role in achieving this objective,” he highlighted.
“The EDB is the premier state organization entrusted with the task of developing and promoting exports from Sri Lanka. The EDB is geared towards promoting products and services of the country with the objective of making Sri Lanka the most sought after destination for global sourcing in identified product sectors,” stated Egodage.
“We strongly believe that private and public partnerships (PPPs) are very essential for the growth and the development of the sector. Private-public partnership is not only essential for the formulation of successful export development strategies but also in the implementation of same. Our approach is based on the principle that the public sector plays the facilitator role in developing the export sector while the exporters drive the sector,” he added.
“The export sector of Sri Lanka after showing strong growth in 2010 and 2011 experienced a setback in 2012 which continues to prevail even this year. The set back is mainly due to the aggravated economic condition in our key markets. The turmoil in these markets has lead to a drop in demand not only for our exports but also for exports of other developing and emerging economies. Also there are supply side constraints in the domestic front,” he further added.
“The anticipated economic recovery in EU and USA which absorb nearly 50% of our products has not taken place. According to international donor agencies such as the International Monetary Fund (IMF) it will take some time for growth to pick up in these regions. The unsettled conditions in the Middle East have further aggravated the situation,” alerted Egodage.
“Limitations on funding available to the SME sectors have been a major concern to many of the export industries whose supply chain is essentially made up of entrepreneurial activity within the SMEs. The EASL records its appreciation of the Ceylon Chamber of Commerce’s initiatives which more recently, brought together the banking sector to collaborate with the stakeholders on how they can work together to achieve growth and prosperity,” stated immediate past Chairman Dawn Austin.
“On a different vein the decline in volumes of tea production as against the rising cost of production is also applicable to agriculture related activity and is a cause for grave concern. Amongst reasons attributed to the angst over the decline in production of our conventional established exports of tea and rubber are the facts that plantations are very old and that there are many vacancies unfilled in the field. The rubber industry needs more production to meet the growing demand globally and serious labour shortage in the country,” she elucidated.