Budget 2012 conducive to exports and logistics - Shippers’ Academy

by Lalin FERNANDOPULLE

The shippers’ academy views the proposals made at the budget 2012 as a positive budget in respect of exports and logistics said Shippers’ Academy President Rohan Masakorala.

He said although exports were growing we have seen over a period of time exports as a percentage of GDP has been decreasing and that was not so healthy situation.

The academy believes the government must have taken this development into account and have come with multiple measures to help exporters.

“The currency devaluation by 3% announced by President Mahinda Rajapaksa shows that government was keen that our exporters were given breathing space and a jump start as the regionally competing countries over a period had depreciated their currencies and was eroding our competitiveness in the global markets”, Masakorala said.

We also saw the policy directions announced by the government to further diversify our export markets and announced the commitment of the state to work towards more trade oriented bilateral agreements with emerging markets, we sincerely hope that this will be driven as a priority and action will be taken soon.

Thirdly we saw the government announcing the three free port zones in Colombo, Hambantota and Tricomalee, this would certainly help the country’s aspirations of becoming a trading based logistics hub where the volumes could be enhanced,we believe this would help both port and airport activity to increase traffic in the medium term and also bring in international investors to set up operations in Sri Lanka to facilitate regional storage and distribution, as Asia is expanding inter regional trade volumes. The policy statements made on exports and logistics by government is very encouraging, how ever we have to have a decisive action plan to implement these in order to make a real change, whilst we have seen a major infrastructure expansion drive since the end of the war, we now need a clear reform agenda in the laws and the way we facilitate trade.

Masakorala said “Laws should be simple, transparent and should not give mix signals to the world. The trading and service laws have to be simplified along with trade facilitation with ICT to reduce process time. Government institution should be equipped with better IT environment and technology to speed up trading and logistics activities”.

We feel that the government has missed on its commitment to bring in anti-competitive laws and a regulatory reform to establish better competition as announced in the 2011 budget.

This should be task we should not forget as our exporters and importers given their size (relatively small in world standards with less negotiating power) are vulnerable to unfair trade practices by both buyers and service providers.

This situation is very bad for the exporters, SMEs and consumers.

The country should now promote FDI in the field of logistics. For this purpose any entry barriers and land restrictions should be dealt with immediate action. we have to attract large investments and globally strong service providers who are looking for locations in Asia to set up hub more operations. we have to get those companies to come to Sri Lanka so that they will have the ability to move large volumes of business to the country for transshipment, storage, value addition and re-distribution. Economies of scale is a fundamental requirement for a hub. Free port concept will help this, but we feel lots of laws have to be reformed on an urgent basis.

We hope the BOI will play a greater role and will be equipped with the necessary reforms for it to be a real one-stop-shop that could help the country to be a modern trading hub.

The importance of knowledge to the work force to service such an emerging economy should be emphasised.

Our labour force with proper training, skills and attitude can beat the rest of the world.

But we need serious commitment and leadership from government to drive the policies announced in the Budget. Otherwise we may fail.