Lanka should export innovative products - Economist

by Rohana Jayalal

Sri Lanka’s exports should be refashioned to go beyond the primary and traditional export basket to innovative new products, Chairman, Sadaharitha Plantations, Sathis Nawarathne said.

Well-known Economist Ricardo Hausmann who played a role in Vietnam’s successful export strategy and addressed the Sri Lanka Economic Forum 2016 recently, said the only way forward in exports for countries such as Sri Lanka was to change our export basket to higher value, innovative and original products and service.

The Chairman said technology and research will play a key role in facilitating the creation of new value to exports providing an opportunity to meet the challenges of a highly competitive global environment.

New technology and research for new exports products are crucial for us to develop and enhance exports. Countries such as Korea, Singapore, Malaysia kept pace and won, which Sri Lanka should emulate.

This is the best time for the country to diversify exports and look for new destinations in the Asian region and the rest of the world. While retaining its traditional markets, Sri Lanka’s presence in the global market should be expanded.

Sri Lanka should recognize the importance of export financing especially with regard to the small and medium scale sector to expand exports, he said. Sri Lanka’s share of exports to GDP was 15 percent last year and has been on a declining trend since 2000.A research firm in a recent study highlighted export financing as a key factor to reduce export-oriented risks which help exporters to attract more buyers.

Small and medium scale exporters usually face added risks including a range of commercial and country risks.Commercial risks are associated with default payments by buyers due to various reasons and country risks are a result of laws and actions by foreign countries. The Chairman said, “As a responsible plantations company in the forefront of commercial forestry, Sadaharitha is mindful of the need to promote a green economy and will continue to play a central role in sustainable agarwood harvesting.”

Agarwood is an expensive crop and has enormous potential for a vibrant export market which will bring in foreign exchange.

It is a homegarden crop that could help low income earners raise their income levels.

Director, Sadaharitha Plantations, Jayamapathy Mirando said, “With the commercialization of Agarwood as an investment product through Sadaharitha, the company is contributing to foreign income generation and local economic development by generating more job opportunities from various ventures of agarwood in various plantations and locations.

We hope to become one of the biggest foreign income generators in the country.”

The value of agarwood exported from Singapore alone has been estimated to exceed $1.2 billion per annum, according to the Food and Agriculture Organisation of the United Nations. Although the export, import and re-export trade of Agarwood products is widespread among the various countries of South East Asia, Taiwan and Singapore lead in exports.

While Indonesia and Malaysia are major exporters of Agarwood products, Australia, Cambodia, Canada,

Hong Kong, India, Indonesia, Israel, Laos, China, Malaysia, Myanmar, Pakistan, South Africa, Thailand, USA and Vietnam also export it.

One kilogram of Agarwood chips ranges from $ 25,000 to $ 30,000 in the international market, while a kilogram of Agarwood oil ranges from $ 20,000 to $ 200,000.

Since there is a big demand in the international market for Agarwood, Sri Lanka will have an opportunity to produce Agarwood and supply the international market.