Sri Lanka's exports down - State Minister
Sri Lanka's exports, as a share of world exports, has fallen over the
past 10 years. However, the Government hopes to boost exports to 30
billion US dollars by 2019, said State Minister of International Trade,
"The people are a little confused by the Budget. So are we. However,
I think it is an export-oriented Budget which will take the country in
the right direction," the State Minister said.
"The world has moved forward but Sri Lanka has gone backwards. Our
exports have come down from 0.9% share of the world's GDP ten years ago
to 0.6% and in local GDP from 34% to 14%. We need to think anew," he
The State Minister said as Sri Lanka's rupee is under pressure due to
the import of luxury goods, increasing exports would help relieve the
He said it was the money printed by the Central Bank to finance
Budget deficits and low interest rates under the previous regime that
had caused a credit boom which was creating currency pressure.
Senasinghe said he hoped to encourage foreign investors to partner
with Sri Lankan firms so that there would be a transfer of technology.
"We hope to make it easier for exporters to tie up with foreign
investors to get new technology and market knowledge with the help of
the Board of Investment," he said.
"At one time we had industries with a value addition of 20 to 30
percent. Today, we have industries with 60 percent value addition. We
want it to reach 80 percent soon," the State Minister said.
"Today, our foreign relations platform is better. It suffered for the
past six to seven years," Senasinghe said.
Under the new government's development program over 5,000 industries
will be launched in 45 export development zones islandwide, the Minister
said. As a first step, the government hopes to set up an export zone in
Trincomalee with Korean investment generating over 40,000 employment
Sri Lanka cannot be developed by taking decisions based on emotions
because international cooperation is vital for development, he said.
Senasinghe said there are two important approaches to upgrade the
export sector in a short period. The first should be to focus on the sub
commodities of the main export commodity. These sub commodities should
also be promoted along with export products. The second is
The State Minister said that during a recent visit to Korea he was
told that the Koreans first imported a car from the US or Japan and
reverse engineered it to learn how to build a car.
Several East Asia countries have free trade zones and low or
negligible import duties have been used by investors to build global
supply chains, where production of a product is spread across several
Though the mathematical percentage of value addition is low in each
country, in many cases large volumes using capital intensive production
methods had given better paying jobs.
Creating free trade conditions and allowing investors from the West
and Japan to innovate and build global supply chains have pushed up
gross export volumes to several times of the gross domestic product in
many East Asian countries.
The activities of the Export Development Board should be parallel to
the government's economic development program.
"Our aim is to make exporters as comfortable as possible and remove
red tape as much as possible. In this Asian century, countries around us
- Thailand, Malaysia, Singapore, and Korea have developed," he said.
"Branding, new technology, thinking in new directions are the ways in
which we can achieve what other developed countries had achieved. Sri
Lanka had borrowed US dollars at an average interest rate of 6.9% over
the past few years for the State's investments and we have to pay Rs
1,200 million annually as loan re-payments," Senasinghe said.
"We have certain State investments such as the Hambantota port and
Mattala Airport which do not give benefits. We have to carry these
burdens. This is not an excuse but this is the true situation," the
State Minister said.
The government hopes to increase the value of export from $11 billion
to $ 35 billion over the next five years.
The State Minister said that this target could be even increased to
US $ 50 million if exporters could get their act together.
"We hope to revive our export manufacturing. Countries such as Korea
and Japan revived their economies with the help of a few major
"The people might not understand this, the public will always want
concessions but we can't build this country on concessions. We must
create a suitable environment for the export industry," he said.