TPOs- towards promotional goals

by T.K.Premadasa

The importance of the development of export and its national value with policy on priority for export trade was stressed in the Budget of 2012.

The objective was to achieve the export target braving the challenges from the international market. Imperatively Trade Promotion Organisations (TPOs) are bound to play a significant role in a bid to strengthen this scenario.

Export trade maintains a reputation playing a pivotal role in strengthening the economy of any country. Similarly fluctuation of exports would cause adverse effects on social and economic development of the country. Given the issue measures were taken to develop export trade, a long term process braving the challenges encouraging the exporters to be involved in business trade.

Exporting local production should not be branded a presentation of only quality products to the international market. Literally it is a crystalline presentation of competent skills with pure labour availed of the abundance of natural resources, display of colorful image and unshakable identity of the nation.

With countries moving towards an open economy in the latter part of 1970s, the export sector rose to the heights of an invaluable partner of the economic policy. The reason was the platform opened by the economic policy based on export oriented or market oriented policy for presentation of products and services to the international market.

The business community in developing countries thought of the timely need for a dialogue to form an institutional frame work to coordinate development with speedy progress of export activities as the global tendency was moving towards an open economy of which export is the key factor.

The International Trade Center (ITC) was established by the United Nations in 1964 under the United Nations Conference on Trade & Development on Tariffs and Trade ( which later became the World Trade Organisation (WTO) to extend support to the trade development work of member nations. The objective of instituting the ITC was to offer support to developing countries on export development and building institutions for the purpose.

The International Trade Center being the central institution in helping the developing nations on development of export trade and encouraged, assisted and advised to establish National Trade Promotional Organisations.

Today there are more than 166 official national trade promotional institutions in nearly 200 countries and it has been estimated that the annual budget is nearly $10 billion.

In view of media publicity Trade Promotion Organisations in certain countries have achieved success while in some countries it is not so. The Singapore Trade Development Board, India Trade Promotion Organisation Council, Malaysia External Trade Development Corporation, Korea Trade and Investment Promotion Agency and British Overseas Trade Office have taken the lead in promotional network.

Trade Promotion Organisations work in cooperation on a regional and international basis to reach the maximum benefit for the best interest of the nations. Asian Trade Promotion Forum with a large gathering is a case in point.Trade Promotional Organisations mostly government owned play a significant role in building the economy. It has been revealed that the private sector too contributes an inestimable service under Trade Promotional Organisations. In the Philippines, the private sector organisations accredited with export development work represent the Export Development Board. The Sri Lanka Export Development Board consists of six representatives from the private sector sharing their responsibility in the export development work.

The inclusion of the private sector into the Trade Promotional Organisations was due to the advice and influence of the ITC. This decision to authorise the private sector to be involved with Trade Promotional Organisations is a positive step.

Sri Lanka's experience on establishing TPO's goes back to the early 70's. In pursuance of the proposal to establish an export promotional institutions on the recommendation of the Five Year Plan introduced by the United Front Government of Prime Minister Sirimavo Bandaranaike, an attempt was made to set up a Trade Promotion Organisation in 1972.

It was the Export Promotion Secretariat established under the Ministry of Planning and Implementation. There were a few organisations operating to look into the areas of Tea and Gems before the 70s.

Consequently, the Export Council of Ministers, Export Advisory Committee and Export Promotion Secretariat were appointed in September 1972 to formulate a coherent policy, establishing an integrated export program as well as to coordinate and monitor the implementation of the export development program.

The Export Promotion Secretariat was a failure as a result of the ineffectiveness of these committees that never met and no financial resources received for the purpose. It was just a division in the Ministry of Planning and Implementation.

Sri Lanka introduced the pen economy policy in 1977 with radical changes in the social economic system aiming at an export orient national economic policy.

The necessity to establish a powerful institution for export promotion was felt. Lalith Athulathmudali, the then Minister of Trade highlighted the importance of a government institution managed by a Board of Directors with collective responsibility to snowball cardinal measures in motivating export development encouraged by incentives as needed.

The Sri Lanka Export Development Board was established in 1979 and has achieved its objectives as a Trade Promotion Organisation. EDB has played a historical role during the last 30 years of its administration obligating its national duty involved in promotional development of exports.

In the recent past, comments have been made by the World Bank and several other interested parties on the poor performance of Trade Promotional Organisations that have not reached the required standard of their responsibility.

In the name of the esteemed service contributed by National Trade Promotion Organisation, it is imperative if an investigation is launched on the work of the Trade Promotional Organisations as to how satisfactory their performance of duty has served the nation.

A reservoir of challenges with development of technology, changes in global economy, social transformation, variable consumer demands have confronted TPOs in their effort to expand promotional development of export more favourable to the nation.

Therefore, it becomes essential to strengthen TPOs with suitable facilities to face the challenges caused by the modern needs and wants demanded by the global atmosphere.

In the name of the credibility of TPOs, it has been observed that other institutions too seem to follow the same guidance on promotion of export trade. Due to the development in business new institutions were opened by the private sector entrepreneurs to achieve their business objectives.

Product Associations, Federations and new Chambers emerged within the business community during the last few years obviously followed the same tools as played by the TPOs.

Therefore TPOs own a right of duty to adopt appropriate strategies as needed for promotional development as an integral partner to the national development since these new institutions are confined to a limited membership.

A development culture operational at interface level would be ameliorative between public and private sector on export production in the interest of the nation. A wide share of responsibility rests on TPO's taking cognisance of the fact that they are mostly involved with the private sector in this effort of promoting export. TPOs having adequate resources, a vision and a mandate blessed with a qualified staff of talents and skills, will achieve their ambitious goal if a dedicated attempt is made. It is believed that most TPOs were setup in early 1980s in response to the need of the time.

The scheme of TPOs was appositely changed to meet the new challenges in the global economy. It is noticeable that those Asian TPOs have touched on minor changes without affecting the major structure. The significance featured by these structural changes is a demonstration of revolutionary steps taken towards national interest on a long term basis against bureaucratic demand.