Buying local, going global

Since the open economy opened the floodgates to foreign products, we have been inundated with all things foreign from pins to cars. For nearly three decades, we have been 'conditioned' to accept foreign goods as the last word in quality. The deluge still continues. Our sidewalks as well as supermarkets are filled to the brim with foreign goods, enticingly packaged and even competitively priced. Sri Lankans do have a 'love affair' with foreign goods, so to speak.

In fact, the open economy made such an impact on local manufacture and industry that some industries collapsed outright. The handloom industry was one of them. Our handlooms simply could not compete with inexpensive machine made garments imported from a number of countries. It was only in the last few years that this industry came out of the doldrums. There are similar cautionary tales from other local industries.

But local goods are fighting back. A group of entrepreneurs have started an islandwide 'Ganna Apey Dey' (Buy Sri Lankan goods) campaign with the fullest support of the Government. The campaign features a lion logo, a reference to the proud Sri Lankan traditions. It is too early to say whether the campaign is a success, but it has made Lankans aware of the potential of their own industries, of their own people.

The main obstacle faced by the campaign seems to be the ingrained attitude of most consumers that foreign goods are somehow superior to local ones.

Thus most consumers are prepared to pay a premium for a foreign product, even when a similar local product is available. Sometimes there is little or no price difference, which makes the choice even easier for the customer accustomed to thinking that foreign goods are of better quality.

There should be a concerted effort by the local manufacturers to impress upon the public that local products are on par with foreign goods and in some cases, superior to them. It is imperative that all local food and other appropriate manufacturers should strive to obtain Sri Lanka Standards (SLS) certification. Sri Lankans have come to trust the SLS mark over the years, as it is a guarantee of quality. Retailers too should insist on the SLS mark whenever possible from their suppliers. The ultimate aim should be ensure that every local product in the market has SLS certification. Those who cannot meet SLS standards will gradually be pushed out of the market.

The problem with this scenario is that honesty is not a virtue practised by many local manufacturers. There still are glaring instances of quality differences between many varieties of local and foreign goods. As a consumer who seeks to help local industries, I have purchased some local packaged foods, which turned out be inferior to their pricier foreign counterparts.

The next time, I will reach for the foreign product. This is rather unfortunate, but I want quality, not just quantity and a lower price. I have also observed that some local products are very good at first, but they decline rapidly even as the price goes up. This holds true even for locally produced goods of global companies. Quality is important, but maintaining that streak is even more important. All local companies must be honestly committed to give their customers products of the highest quality. The Ganna Apey Dey campaign and authorities should help companies wishing to upgrade their quality assurance and control systems.

It has also been observed that some small and medium scale entrepreneurs do make high quality products, from food to shoes. Most of them lack access to the wider market and advertising, so they could be restricted to a particular city or region. Only a handful of customers get to know about these products. The authorities should help these entrepreneurs to find marketing avenues and achieve quality certification.

Many local manufacturers export their products to a number of countries.

That in itself is a guarantee of quality because most countries have stringent quality control procedures for imported products. But this fact should be highlighted more aggressively in marketing campaigns and advertisements, with the names of individual countries where possible. I might be tempted to buy a variety of local jam that is exported to the USA, knowing very well that US authorities do not accept sub-standard goods.

However, there should be no difference in the quality between local market and export batches of the same product. That would be a breach of trust on the part of the manufacturer, which is unfair by the local consumer.

There are those who argue that we should close our market to all foreign goods, especially those which can be manufactured locally. That is called protectionism. It has no place in the open economy. The consumer should have a choice and it is up to him or her to buy foreign or local goods as the case may be. Again, quality is the great leveller.

However, this does not mean that the State should not take certain measures to protect the local farmer and industrialist. For example, there is no need to import normal varieties of rice if we are self-sufficient in paddy in a given season. Onions need not be imported when our own farmers are unable to sell their stocks. The same holds true for potatoes and other varieties of food. The State may also adjust the duty structures to suit season variations in the availability of fruits and vegetables.

But at least 40 per cent of our food produce goes waste before reaching consumers. This is a colossal waste as nobody benefits in the end. Better storage and transport conditions and preservation methods are needed to tackle waste. For example, more jam and chutney can be produced for local and foreign markets from our abundant fruit harvest. We have seen foreign vegetable cans on our supermarket shelves. Why not can more of our fruits and vegetables for export? The authorities should ponder on these issues with an eye on minimizing waste of food produce.

There are other instances when we do not make the maximum use of our resources. Sri Lanka is surrounded by the ocean, yet we can catch only a limited amount of fish mainly due to technology limitations. We will soon inherit a much larger ocean area and it will be a Herculean task to 'harvest' this area for fish unless our fishermen are equipped with a bigger, better fishing fleet assisted by GPS and Sonar fish locator technology. It is no secret that foreign trawlers regularly poach in our territorial waters and leave with a huge catch.

The irony is that our market is inundated with canned fish from Chile, South Korea and several other countries while a vast ocean surrounds us. With a can priced at nearly Rs. 200, canned fish is becoming an item that cannot be afforded by many. If we had canning plants here, the local demand can be easily met and there could be a surplus for export as well. This will especially benefit those living in the interior, where fresh fish is not readily available due to transport difficulties. One can also imagine the foreign exchange savings that can be made through such a measure.

It is also difficult to change some deep-rooted habits that prevail among the people. The consumption of milk powder is among these. Milk powder became popular when refrigerators were a luxury item and fresh milk was not generally available except in Colombo and a few other cities. Now almost every household has a refrigerator and fresh milk is widely available. But most people still buy milk powder packs (at least Rs.220 each ) instead of opting for fresh milk. A 400 gram milk powder pack can make around three litres of milk. On the other hand, a litre of locally produced fresh milk costs around Rs.100.

Thus there is still a price difference - in favour of imported milk powder.

The challenge for local dairy companies is to increase their production and bring prices down, without hurting the dairy farmer. At the same time, a massive campaign should be launched in the media to educate the public on the virtues of fresh milk. If this succeeds in converting at least 10 percent of the public to take up fresh milk, Sri Lanka can save a massive amount of foreign exchange. Of course, the long term goal should be producing the entire country's requirement of milk powder and fresh milk locally.

In case you thought that our output is limited to agri crops and garments, think again. Several Sri Lankan companies have already gained a reputation for top-notch electrical goods, electronics and even automobiles. Most of them export their products even to developed countries with tough quality standards. But in the local market, these products are hindered by a tax structure that ultimately pushes their prices on par with those of imported products. This is a major disadvantage, as most consumers still prefer to buy foreign electrical and electronics goods due to entrenched perceptions of quality. These manufacturers should be granted more duty and tax concessions to make their products more affordable and appealing to the average consumer.

Clearly, there is a long way to go before the campaign to popularize local products can succeed fully. It calls for a combination of changing consumers' attitudes and perceptions, developing and harnessing better technology, granting better facilities and concessions for local manufacturers and inculcating a sense of pride in buying all things local.