National Chamber of Exporters of Sri Lanka (NCE) President Ramal Jasinghe called on state research institutes to move out of their comfort zones and play a direct role in the national export strategy.
Jasinghe said that while public research institutes such as the Industrial Technology Institute are doing good work, their present research focus is on local industry. However, as Sri Lanka’s is an export-driven economy, these research institutes have a pivotal role to play in the strategic vision the government has for export growth, viz., Sri Lanka as an export hub driven by innovation and investment. "Thus far, it has largely been the private sector which has undertaken research for the exports sector, buoyed by tax concessions offered."
Innovation and R&D
Commending the ongoing effort of the Ministry of Development Strategies and Industrial Trade and the Export Development Board to chart a national export strategy (NES), he underscored the need for innovation and research and development (R&D), which is where the research institutes have a positive role to play. "At present, there isn't sufficient research into the markets to which we plan to export."
The NCE President said innovation and R&D need to focus on the six priority sectors that the NES has identified, viz., ICT, wellness tourism, spice concentrates, boat building, processed foods and beverages and electronics, electrical goods and machinery.
Innovation and R&D is in fact one of four trade support functions (TSFs) that the NES steering committee has outlined to sustain and grow the priority sectors, the other three of which are national quality infrastructure, logistics and trade promotion.
“A small state like Sri Lanka faces issues of scale which must be countered with the uniqueness of quality of its products such as tea and spices,” Jasinghe went on say. “We need to exploit the positives of our tea and spices and other products and be innovative in our agricultural and marketing practices to seize global opportunities which would otherwise be lost.”
“Our cinnamon, for instance, is perhaps the world’s best. Some countries are marketing a cinnamon substitute, cassia, which is however known to be carcinogenic. We need to use such market information to effectively counter competition and sell our products.”He said an innovative approach to export growth would cater to market trends such as the present global demand for ethnic foods. "Market trends could impact us positively or negatively and we need to be geared for that."
Marketing
Underlining the need for using the tools of marketing to develop the exports sector, Jasinghe said, at present, although Sri Lanka has enviable marketing brains among academics and professionals, market information in the exports sector is sadly at a low level and is not organized. “The resources of the marketing dons in academia and professional bodies need to be mobilized to ascertain the marketing mix and best strategies and tactics for value chain development in the exports sector.”
Strategies in the export sector should dovetail on a national export and branding strategy which in turn should be built in line with Vision 2025.
Jasinghe also said that any effort towards growing the economy cannot be undertaken solely by the government or solely by the private sector; it has to be a public-private partnership such as the current 'think tank' on the NES.
FTAs and para-tariffs
"Thus far, we are happy that the state has been engaging and listening to exporters. We don't want any surprises because at the end of the day we need to protect our entrepreneurs, our farmers and our manufacturers."
Referring to the free trade agreements (FTAs) the government is negotiating with some countries, Jasinghe said the NCE is happy that protection will be afforded by the proposed anti-dumping legislation.
He also said that although an FTA may allow certain exports, the laws and regulations of a particular state in the other country may hinder their entry into that state. "Such non-tariff barriers need to be addressed right at the start."
Further, regarding the relaxing of para-tariffs, Jasinghe said thus far they have had no untoward issues. "We are not asking for a cess to be retained forever. But if the government is taking off a cess, we request that it be done gradually, to give that particular industry sufficient time to adjust to the market and grow."
Infrastructure
The NCE President said Sri Lanka needed the requisite infrastructure to drive the national export vision and power generation was one such sector which needed urgent development.
Export growth also needs to be driven by sustainable initiatives and NCE is part of the efforts of the National Cleaner Production Centre to ensure globally accepted sustainable manufacturing practices that will in turn ensure that Sri Lankan exports have continued access and acceptance in international markets.
Human resources
Speaking of Sri Lanka's future human resources development, he said today's youth are drawn to becoming 'tuk tuk' drivers because of the relatively easy method of earning a good income. "This is largely a result of a lack of skills development and vocational training, right from school level."
"The Ceylon-German Technical Training Institute in Moratuwa used to attract a number of youth, many of whom are now abroad. Likewise, the National Diploma in Technology was an attractive qualification to possess. Now the 'tuk tuk' is the biggest threat to Sri Lanka's ensuring it has technically skilled manpower."
"The NCE has taken up this issue with government ministers who agree there is a problem."
"We need a concerted strategy to restore the dignity of the blue collar job and the cultivator as well. We need to show youth there is power in such professions."
He said as workers' remittances to Sri Lanka have been dropping, Sri Lankans returning from the Middle East should be channelled to entrepreneurship or the manufacturing and export sectors.
Summing up
Jasinghe said a holistic view of the national export strategy is necessary where all stakeholders and every citizen of Sri Lanka participates.
"For instance, we are working on a project with the ILO which brings the cultivators of the North with the entrepreneurs of the South. We hope to replicate this inclusion in other provinces creating cross-province engagement in the exports sector."
He said such initiatives are or will be funded by the ILO, ITC and foreign governments.
“As opposed to say five years ago, there is now inclusion, an open environment and room for discussion and disagreement on national economic issues which are essential milestones for development.”
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