The strategy identifies three main approaches to making the EEC sector successful in the next five years. These are to leverage existing capacity of being an Electronic Manufacturing Services Centre, become a component manufacturing base for large multinational brands and to leverage innovative ideas available in academia and the industry
The National Export Strategy (NES) has started sailing in the high waves after obtaining Cabinet approval and the launch with all the stakeholders of NES.
The National Export Strategy (NES), a flagship development project spearheaded by the Ministry of Development Strategies and International Trade and the Sri Lanka Export Development Board (EDB) together with the public private partnership commenced its implementation. The Navigator, State Minister for International Trade and the Core Team comprising senior public and private sector representatives who were leading the designing and formulation of the NES gathered at the MoDSIT to track and plan the future implementation of NES.
Some quick wins which could thrive in exports and grow at the targeted rates were extracted from the NES plan of actions in consultation with Advisory Committees are currently being implemented through the Budget Proposals. To name a few; the ‘Export Market Access Support Scheme; Establishment of ICT Initiative program. In addition, the electronic industry is working closely with EDB and BOI to attract new investors who are already established in the global network to be engaged with local partners through joint ventures with Sri Lankan electronic exporters and manufacturers. Furthermore, EDB together with the Ministry, BOI and other relevant government institutions and industry is heavily occupied in establishing a dedicated industry zone for boat building, to establish infrastructure facilities for the boat building industry in the Koggala Industrial Zone and Weligama and also development of a regulatory framework for the boat building industry. In addition, the establishment of a Trade Promotional Platform is also being finalized.
The Advisory Committees have already commenced to implement identified focused actions under each sector. These Advisory Committees facilitate actively in the implementation of the NES by closely monitoring Plan of Actions of the Sector Strategies.
The NES Management Unit is established to lead the co-ordination, follow up and monitoring of the NES and to work closely with the relevant Ministries, national agencies, industry associations, private sector organizations and development partners in enabling a smooth sail for NES implementation.
New Budget Proposals to be submitted to the National Budget 2019 were identified and extracted from NES. Hence, these new proposals were mainly focused on much needed safety and standards for processed food sector, that is: upgrading Food Safety Law and establishment of a Control Mechanism (Food Safety and Standard Authority), development of the Logistics sector and development of Sri Lanka Wellness Tourism sector. EDB also presented their Action Plan for the year 2019 which includes, in addition to NES focused sectors, National Quality Infrastructure, Trade Information and Promotion, Logistics sectors [u1] along with other mature sectors of Apparel, Tea, Rubber, Coconut and Gems and Jewellery.
Considering the Plan of Actions, the annual export targets and sectoral targets were further discussed which has been developed in consultation with exporters and the Central Bank Economic Research Department with the guidance of the Ministryof Development Strategies and International Trade to achieve US $ 28 billion by 2022. EDB also mentioned that these targets have been already shared among all relevant public and private sector stakeholders and highlighted the importance of their support in achieving them.
State Minister for International Trade instructed EDB to create awareness on NES among all stakeholders especially among the Government Officials, as an initiative, EDB got an opportunity to do a presentation on NES at a seminar organized by the Ministry of National Policies and Economic Affairs which was chaired by the Prime Minister, with Secretaries of all Ministries.
The NES document is hailed by the think tanks as a bold far reaching and ambitious one. The stakeholders involved in the NES are confident that the targets are achievable as the formulation was done on a solid footing at a time the country has recorded an all-time high export turnover of US$ 15.2 bn. in 2017 (merchandize and services). NES focus sectors provide a good mix of industries with different growth trends, yet ensures the NES remains focused to achieve the key objective of export diversification during its five year implementation period. These focus sectors were identified based on quantitative and qualitative parameters derived from export potential assessments since the existing structure of the export of goods and services is already saturated. Hence it is a dream which can be achieved by the dedication and support from each and every institution to reach the high economic growth through exports.
On the selection of focus sectors were also discussed and the views expressed by some of the stakeholders are quoted below:
Wellness Tourism
Wellness Tourism is not narrowing down the tourism sector, but adds more value to general tourism industry. The Wellness Tourism (Health and Wellness Service) sector attracts wealthy foreigners from high spending markets such as UK, Germany, Austria, Switzerland and GCC. While the general tourism receives more backpackers.
The minimum stay of a medical traveller is one week including Ayurveda treatment which sometimes goes beyond three weeks depending on their illness as they are visiting purposely knowing the value of this service.
As a country with highly skilled medical professionals in both indigenous and western medical sector, the country could easily be on par with other medical tourism destinations if we could address the policy and regulatory reforms.
Electronics
The Electrical and Electronic Components (EEC) sector as a visionary sector for growth and development for the next five years has seen a steady growth in Asia. This will lead Sri Lanka towards its aspirations to become a hub of growth and innovation in the Asian region, and thereby providing employment and prosperity to millions of Sri Lankans.
Globally, the electronics industry has grown from USD 1.75 trillion in 2008 to USD 2.1 trillion in 2016. It is estimated further grow to USD 2.4 trillion by 2020. Despite the significant growth of the sector internationally, Sri Lanka has had limited participation in the sector so far. The NES will take into account Sri Lanka’s skilled labour, infrastructure and preferential access to key destination markets (such as GSP+) to further develop its EEC industry.
The recommendations of the NES are a combined efforts of public and private sector stakeholders to optimize strength, overcome constraints and move towards establishing the Sri Lankan Electrical and Electronic Component sector as an integral manufacturing and trading hub of the Asian region.
The essential strategy is also to produce only selected components and join the global production networks, since this strategy was followed by countries in East Asia, such as Malaysia, Thailand and the Philippines, when they penetrated the global high tech markets.
The strategy identifies three main approaches to making the EEC sector successful in the next five years. These are to leverage existing capacity of being an Electronic Manufacturing Services Centre, become a component manufacturing base for large multinational brands and to leverage innovative ideas available in academia and the industry.
Processed food and beverages
The NES prioritises the food industry in context of the very formidable social and economic opportunity that Sri Lanka has for transformation of this sector.
Lack of innovation and value addition and inadequate branding are all constraints that plague the sector which are addressed in a systematic manner in the NES.
The National Quality Council and National Food Authority are two core elements of the NES in relation to food and their purpose is significantly to create an enabling environment for Small and Medium Enterprise to understand and adapt to the requirements for branding, value addition and export of Sri Lankan produce.
There are perceived disadvantages linked to weak productivity in Sri Lanka which the NES frames within the potential for the same factors to become clear advantages on account of changing consumer preferences. Food safety fears, social and lifestyle factors have created a situation where small scale, artisanal produce is valued over its large, commodity scale equivalent, especially where there are wellness benefits.
The evolving characteristics of the international market and associated opportunities make the prioritisation of the Sri Lankan food and beverage processing sector an important element in the NES.
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