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| Sunday, 25 August 2002 |
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Govt. on drive to increase productivity, competitiveness in export sector The Government is taking prompt measures to implement national growth strategies put forward by key industry leaders to increase productivity and competitiveness in the export sector, said Minister of Enterprise Development, Industrial Policy and Investment Promotion Professor G.L. Peiris. He said that industries in Sri Lanka are unfortunately, unable to perform to their maximum potential due to frequent policy changes, inadequate supply of domestic capital, poor infrastructure and the security situation. The Government is trying to change this situation by capitalising on the assets we have, together with a private - public sector collaboration, said the Minister. The objective of implementing these plans is infusing productivity and competitiveness to the key export sectors, he added. Prof Peiris said that some of the recommendations presented by the leather industry task force on tariff issues have already been implemented by the Government. At present the Ministry is taking stock of the situation in other industries to take effective measures. Chairmen of four of the 16 task forces set up as a result of dialogue between the private sector and the Ministry - spices, coir, tea and food industries - made presentations at a recent workshop titled 'Strategies for Growth: How will the industries compete'.The leaders of footwear, leather and ceramics industries presented their plans to the Minister two weeks ago. Chairman of the Sectoral Task Force for Spices and Allied Products Dr. Devapriya Nugawela said that world trade in spices, related products and herbal products is estimated to be US$ 200 billion annually with an annual growth rate of five per cent. "Even though Sri Lanka's spices are famous for their inherent qualities and our herbal products have a history of over 2,000 years, its annual contribution to the national economy is only US$ 100 million. There has been no significant growth in the past 25 years in this sector in Sri Lanka, while India has achieved a 10-fold increase," Dr. Nugawela said. Constraints faced by the sector are land under cultivation remaining constant; low levels of production and productivity; lack of industry standards and awareness among producers on the quality standards; logistical problems; lack of research and development activities, information and training; implementation of regulatory and fiscal policies that inhibit industry growth; high cost of technology; financial constraints; cultural practices; and constraints in marketing. Some of the recommendations of the sector are setting up a Spices and Allied Products Council and a fund to develop the sector, land policy for cardamom plantations, collection of produce through various schemes, incentive scheme for exporters, introducing high yield crops, liberalising the import of ingredients and raw materials, and brand marketing Sri Lankan spices. Chairman of the Sectoral Task Force on Coir and Allied Products Indrajith Piyasena said that Sri Lanka is the world's largest exporter of coir fibre and products, measured by product volume. "But all segments of the industry face threats to competitiveness, profitability and sustainability. Inconsistent fibre quality, low productivity at mill level, the lack of a quality-based pricing system for coir fibre and declining markets due to competition from synthetic materials are some of the problems faced by the industry," Mr. Piyasena said. Chairman of the Sectoral Task Force for Tea, Mahen Dayananda said that despite Sri Lanka being the world's largest exporter of tea, the industry is subject to volatility and long-term price pressures. "To become more competitive, the industry must build on its traditional strengths to develop brands, create marketing alliances and move closer to end-consumers in its target markets," Mr. Dayananda said. Chairman of the Sectoral Task Force for the Food and Food Processing Industry, Mario De Alwis said that there has been a decline of actual investment in this sector since 1999. He attributed this decline to high import tariff on raw materials and packaging materials, very little investment on research and development, lack of market information and quality control mechanisms. The five-year plan is targeted at creating a conducive policy environment, developing the workforce, research and development and market information. |
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