Lanka dependent on import/export trade

by Elmo Leonard

Sri Lanka, with limited natural resources is dependent on the import/export trade, according to the import section of The Ceylon Chamber of Commerce (CCC). Year 2005 demonstrated a widening trade deficit by $ 274 million; imports grew by 10.8 percent to $ 8.9 billion and exports increased by 10.2 percent to $ 6.3 billion, the 71st AGM of the import section of CCC noted.

Sri Lanka's imports are mainly from countries east of its location and other Asian countries, and exports, largely to countries to its west. This augurs well for the development of the Colombo port, particularly its south harbour development, Vice President of the import section, Ranjan de Silva said at its 71st AGM.

De Silva said that government had decided on the development of the port and other major infrastructure projects, including roads and the coal power plant at Norochcholai, all of which are essential for economic development. De Silva said that in 25 years, many infrastructure changes, which would then be in place, that would impact upon the economy. But the port of Colombo, would remain unchanged as the infrastructure cannot be moved to another location.

Regional port development, particularly in India was already a step ahead of Sri Lanka. To cater to the changes taking place in the shipping industry, Sri Lanka needed to fast track these developments to ensure that she is not left behind. Whether Sri Lanka becomes a hub or a feeder, would depend on implementation of decisions, now, de Silva said. He hoped the authorities would effect at least common global business practices to enhance overall efficiency of the economy.

De Silva said, "EDI which links import/export work, customs, SLPA and other relevant authorities will at least be fully implemented to provide the promised efficiency by adopting these practices through private and public sector partnership."

The relatively high interest rates charged on the business community was a matter of concern to its members. According to the CB annual report, the interest spread still remained high relative to regional standards.

The CB states that efforts should be made by the banks to improve efficiency and productivity, to lower the intermediation costs, de Silva said. He hoped the banking sector will take note and initiate action to address this issue bearing in mind the direction of CEPA, which stresses on the financial services industry.

Governor Central Bank, Ajith Nivard Cabraal, the chief guest acknowledged that the CCC import section plays an important part in the economy, bringing in goods.

Trade means importation and exportation and this importers' body played a significant role in economic growth, he said.