Lanka should embark on consistent export target policy | Daily News


 

Lanka should embark on consistent export target policy

Sri Lanka needs to re- think and do things differently to increase exports, Subhashini Abeysinghe, Research Director at Verite Research said.

“The government has set targets just like in the past for trade especially in exports. If we look at the history of Sri Lanka, we’re a country that sets targets and always fails to meet those targets and then continue to downgrade targets. This is the same situation that we see in the exports sector.

The last government did revise the targets. Interestingly all of a sudden, it combined goods and services and set a target for $ 20 billion. Now this is highly problematic. Because the way we collect service data remains extremely weak. Sri Lanka should develop a robust mechanism of getting service exports data.

When you don’t have that, it makes it easier for the government to message the numbers as well. When you have a goods-only target for $20 billion, and 10 years later it is changed to a goods and services target, this is significant doubt of our export performance, and that is extremely unfortunate.” Abeysinghe told an event organized by the Ceylon Chamber of Commerce to launch its annual Outlook Report for 2020, at the Economy + Sector Review and Outlook 2020.

“One of the problems with Sri Lanka’s export sector right now is that it is totally out of sync with local developments, and it is also out of sync with global developments.

One of the major disparities in the current export basket is that Sri Lanka has transitioned from being a low-income country to an upper-middle-income country.

But our exports are stuck in low-cost, low-skilled, labour-intensive sectors, and there is a total incompatibility with it,” she said.

She said further even though the government has targeted a $ 6,500 per capita income in the next five years, with double digit growth in exports, this wouldn’t be easy for Sri Lanka to achieve that target when country’s apparel sector accounts for 45% and agriculture sector accounting for another 22%.

According to the Ceylon Chamber of Commerce to launch its annual Outlook Report for 2020, at the Economy + Sector Review and Outlook 2020, Sri Lanka’s tourism yields has lowered by 10-15% in 2019 with recovery in arrivals. However, arrivals could be negatively affected with the outbreak of novel Coronavirus.

Apparel export recorded earnings in 2019 with the highest growth rate since 2015. However, 2020 growth will depend on market access and negating trade risks.

The consumer durables sector faced a tough year in 2019. However lower interest rates and fiscal stimulus should boost demand. Similar to consumer durables, 2019 was a challenging year for FMCG sector. Consumption pickup should see a rise in non essential categories.

Construction sector was impacted by slowdown in the economy and policy uncertainty .Payments by government to contractors needed to boost outlook.

Also, weather patterns will continue to impact the output of the plantation, agriculture and dairy sectors .Outcome on wage discussion is key for outlook of the tea industry, the report said.


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