Cess, a constraint to exports- Dr. Harsha

As Sri Lanka is vigorously focusing on an export-led economy, the country must remove all export cess to enhance competitiveness, parliamentarian Dr. Harsha de Silva told the Annual General Meeting of the Spices and Allied Products Producers’ and Traders’ Association (SAPPTA).

“I’m personally against export constraints such as cess. What does this cess do, what it is used for? Is this used to market Sri Lanka’s Ceylon logo or is it used for some politician’s egoistic projects? The latter was the truth,” he said.

He said that Rupee also weakened due to poor export performances.

“Exports have really suffered. What went wrong? Our major export income source is Middle East slavery. That’s a shame. Where were our priorities?” he queried.

“The Sri Lankan rupee may weaken further; I don’t know how long we can hold this currency as exports are falling,” he said.

The rupee on Friday ended at 138.85 per dollar, 1.81 percent weaker from Thursday’s close of 137.04.

“Export competitiveness is the key to economic success, but our exports were coming down in the range of 35% to 15% (as a percentage of GDP) during the past 10 years,” he said.

“We are ready to cut all red tape for investors because we have to increase our exports not 10-15 percent but by 200 to 300-fold.

This government will complete major reforms and new legislation to make the economy more competitive within the next six months, while punishing all wrongdoers,” Dr. de Silva said.

“There was a time that the ‘transaction cost’ was so high, compared to investment cost and potential investors were put off. We must eliminate State corruption by imposing strict discipline,” he said.

According to SAPPTA’s annual report, spice exports increased 43.4 % to US $ 39.9 million by July 2015 compared to a year earlier. Sri Lanka’s trade deficit in June widened 51.9 per cent to US$ 689.2 million compared to US$ 453.7 million a year earlier, Central Bank data showed.

Exports for the month were US$ 944.1 million, down 4.2 per cent compared to a year earlier. Imports rose 13.5 per cent to US$ 1.63 billion. - SJ