EDB makes remarkable contribution to economic growth

By T.K. Premadasa

The Export Development Board (EDB) celebrated its 35th anniversary on August 1. As an apex national organisation in export development and promotion, EDB deserves a high degree of praise for its remarkable contribution towards socio-economic development of the country.

Since its inception, it was the dedicated effort of the talented and qualified staff that nurtured the EDB to be the leading export development institution in the country.

The government elected to power in 1977 introduced the open economic policy mainly to establish an export oriented economy for products and services to compete in the giant global market. In this context, Sri Lanka realised the urgent need for a powerful institutional framework to develop the export trade.

Export trade

In the 1970s, the International Trade Centre (ITC) of the United Nations Conference on Development of Trade and Tariff pushed for the setting up of the Trade Promotion Organisation (TPO) in member nations to develop export trade.

The setting up of the Export Promotion Secretariat in 1972 by Sri Lanka to support export development was a fiasco.

This enthused the business community to open a dialogue within their community to determine the urgent necessity for a national body to promote and develop exports.

The Sri Lanka Export Development Board (EDB) was set up on August 1, 1979 under Sri Lanka Export Development Act No. 40 of 1979.

The first significant step of this Act was to bestow the EDB with wide powers with regard to export promotion and development.

The structural set up for the EDB was unique. An Export Development Council of Ministers was formed under the Chairmanship of the President, to advise the EDB for prompt execution of the decisions taken by the Export Development Council of Ministers.

The Ministers of Trade and Shipping, Industries, Fisheries, Finance, Foreign Affairs, Planning and Rural Industries were the other members of the Council.

This feature could not be perceived in any other government institution. It was an attempt to directly intervene in export promotion activities.

As a leading government institution in respect of export development, the EDB was entrusted with great responsibility such as to advise the Council of Ministers on national export development policy, to formulate national export development plans, facilitate the supply and diversification of products and services, execution of research and market development programs, help resolve issues involving exporters within the government, develop export skills, extend advise to exporters and improve international relations with related agencies.

The EDB has made a remarkable contribution during the past thirty five years. Incontrovertibly, its activities covered a vast area in the development of the export trade.

Implementation of national export development plans, simplification of export procedures, formulation and implementation of financial assistance schemes, organising exporters' fora, inward buying missions, buyer-seller meets, participation in trade fairs, solo country exhibitions, national expo exhibitions, operation of trade centres, publishing business magazines, developing branding strategies for selected export products, strengthening relationships with TPOs of other countries are some its valuable accomplishments.

Growth

Sri Lanka exports before the 1980s depended on a limited number of products exported by a handful of exporters. The major export items were not products but only commodity items.

Today, Sri Lanka exports nearly 3,600 products the world over with approximately 4,500 exporters directly involved in the trade.

During the past 35 years it has maintained an average growth rate of 7% annually except for the past few years. This shows the efforts to develop the supply base, diversify products and services and export markets and introduce new products.

This vast development has opened avenues of employment improving the social life of the nation.

The EDB has been a responsible partner in the progressive development of exports.

Globalisation, developments in high technology, intense competition and social change have revolutionised the global atmosphere. This has created new challenges for TPOs in developing countries. As a leading TPO in Sri Lanka, the EDB should be prepared with proper strategic plans to brave any challenge in the future for the benefit of the nation irrespective of personal interests.

The EDB should realise, that today, there are various other institutions in the business arena for export development.

At the initial stage of the open economy, only a few Chambers and institutions were functioning. At the time, as a newly instituted statutory board, the EDB with its skills and competence was admired by the business community.

Today, a large number of business institutions have come into operation with massive development structures. A fair number of exporters have moved away from the EDB and become members of the new institutions.

The time is ripe for the EDB to give high priority to attract the exporters back with new strategies and incentives while strengthening its activities.

Promotion

It is important to understand as to why exporters leave the EDB and deal with the other associations.

The implementation of the National Export Development Plan is the main responsibility of the EDB. The strategic plan prepared by EDB for 2010-2015 was to achieve US$ 15 billion in exports by the end of 2015 with an annual growth rate of 13%.

The plan for 2010-2015 was prepared when there was an economic crises in Europe. Most experienced officers and professionals said that a realistic target should be a 9% increase.

But those who drew the plan targeted an annual increase of 13% which was a harder target. On the other hand, no new strategies seem to have been introduced except for following the old promotional tools.

Today, other export associations are working to present micro plans, with realistic targets, to the government. It is understood that a new export development plan is being prepared for the next five years. The plan should serve the nation.

Therefore, it is the duty of the Board to take measures at the earliest by calling for views and suggestions from all concerned parties including the public to achieve the best results.

Follow up

Another factor is the outcome of the Sri Lanka Expo 2012 exhibition. According to the EDB over 1,000 buyers visited it.

At the Expo exhibition press conference, the EDB Chairman said that Sri Lanka's export sector was hoping for a revenue of US$ 12 billion as direct result of the Expo.

As per Expo website, confirmed orders to the value of Rs 8 million (US$ 66,000) had been received.

The Chairman of the EDB told the media after the Refections of Sri Lanka exhibition which was held parallel to CHOGM, that he expected an increase in exports as a direct result of Reflection of Sri Lanka.

It is now time to evaluate the results of Reflection of Sri Lanka. Most importantly, a follow up procedure will show whether the expected results were obtained.

The EDB should be proud of the Presidential Export Awards (PEA) organised by it, because it is the highest prestigious award presented in appreciation of the professional competence exhibited by the export community in boosting the national economy.

Many similar award schemes came into being after the introduction of the PEA awards by the EDB.

The annual presentation was conducted from 1981 until 1994. After a lapse of 13 years, this presentation was again introduced by President Mahinda Rajapaksa's government in 2007 considering its value to the business community.

In analysing the PEA of 2010 and 2011, it was found that some important parts relating to PEA evaluation had been omitted and it could be seen in PEA applications for 2012 too.

Another fact is that an award under the service provider category that was listed from the time of launch of the awards scheme in 1981 has not been listed this time.

Confrontation of challenges from external forces supported by internal forces against the implementation of PEA after 2007 was braved with courage after an intense struggle to protect it.

The recognition of its value and national significance was the main factor that led to its protection.

Another important factor that the EDB should seriously consider is the EDB Act which has not been amended for the past 35 years. It should empower the EDB to promote development and fund raising activities through the Export Development Fund to strengthen the export trade.

It is the duty of the EDB to make an effort to use the powers bestowed by the Act to help build the nation. It is advisable if priority is given to KPO-BPO, application of new branding strategies, reactivating the council of ministers, frequent meetings of the National Exporters Advisory Committees.

Reopening trade and display centers overseas and appointing official agents will help revitalise the situation. Sri Lanka still faces challenges as our major exports depend on the Western market. Due to the removal of GSP+ Sri Lanka lost a significant amount of exports. According to the authorities, US$ 784 million was lost during the past few years.

Sri Lanka is striving for a larger Asian market to overcome the situation. Opportunities seem to be emerging with the development of new relationships. The proposed Free Trade Agreement with China and Bangladesh, BIMSTEC Free trade agreements have opened avenues to initiate new export orders.

It is the responsibility of the EDB to play a major role under the new scenario of FTAs as antcipated by the export community.

Challenge

The role played by the EDB in developing SME sectors such as leather, ornamental fish, handloom and packaging is commendable. Improving SMEs is a difficult task.

Setting up regional offices islandwide in the early 1990s was an intelligent step.

The EDB still maintains its high reputation achieved with the help of professional staff to brave any challenge in the field.

It is important that people with integrity and experience should be appointed to the EDB in the interests of the nation.

The government under the leadership of President Mahinda Rajapaksa has continuously given high priority to develop exports.

The President as the Finance Minister in his Budget speech every year makes various proposals and grants incentives to help develop the export trade.

The most commendable step taken by the President is the detailed discussion he holds with the business community to find solutions to their problems and for suggestions before presentation of the Budget.

This meaningful move adopted by the government has encouraged not only the export community but also institutions such as the EDB to further strengthen their dedication to develop exports.

Global challenge

Today, the EDB can stand stall due its invaluable contribution not only to socio-economic development but also for its dedicated effort to develop Sri Lanka's image.

It didn't happen by itself. It was the excellent performance by the skilled and experienced staff even during difficult periods braving every global challenge with a strategic approach that helped build the national economy.

The nation salutes international personalities such as Victor Santiapillai, Asoka de Lanarolle and K. Gunaratnam, former leaders of the EDB who astutely helped develop exports with methodological strategies.

They always focused on the needs of the export community with the support of knowledgeable bureaucrats. The bulk of the programs were introduced during the time of these three men.

The time is ripe for the EDB to recollect its past achievements and continue its professional competence on the theme 'Sri Lankan Pride Across the World - EDB'.

The writer is a retired Head of Corporate Affairs and Communications, Sri Lanka Export Development Board and Ex-Director of Sri Lanka Trade Centre in the Maldives. He can be reached at [email protected]