Local industries should stand on own feet - CB Governor

Central Bank Governor Ajith Nivard Cabraal said that Sri Lankan industries have to come out of the dependency syndrome and stand on their own feet in the international market.

Export industries should not depend on short term concessions but improve their competitiveness, said Cabraal outlining the government's bail out package for export industries to face the GSP+ free environment.

Accordingly, exporters will be able to maintain the prices of their products unchanged without GSP+.

Under the GSP+, importers in the EU countries gets 8-12% customs duty concessions for products imported from 15 GSP+ accredited countries.

According to the new proposal the government will provide the same concession for the industries for one year to help the industries to adjust to GSP+ free competitive market environment.

"We had studied the risk in the event of the abolition of GSP+ a long time ago and therefore we have plans to face such a circumstance. That is one responsibility of the Central Bank, to anticipate future risks and come up with mitigative plans.

Since this is a temporary concession, we cannot depend on this forever.

There has been a significant increase in our exports to the EU during the past three years. But we cannot say that the sole reason for the increase is GSP+.

This is because during the same period, our exports to the US market had also increased without any such concessions, Cabraal said.

Some sectors have expressed fears over the adverse impact on the garment industry, the main export industry in the country where 300,000 direct and over 600,000 indirect employment depend on.

However, Cabraal argued that the garment sector of Sri Lanka with a 30-year history has shown its strength and has become an industry leader.

Therefore, it can survive and grow without concessions.