Tuesday, 18 February 2014 00:01
By Kinita Shenoy
With over 440 export-oriented member companies and the distinction of providing its services since its establishment in 1986, the National Chamber of Exporters held their 19th AGM on 21 January, addressing their shareholders and addressing developments in regards to all stakeholders.
The event was graced by Ambassador of Japan in Sri Lanka Nobuhito Hobo as chief guest, with the keynote speech delivered by UN Head of National Portfolio Development for Sri Lanka and the Maldives Rohantha Athukorala, who touched upon the value addition needed to enhance Sri Lanka’s exports.
Immediate Past President Dr. Jagath Peiris expressed his confidence that with a proper strategy and willingness to pass psychological barriers, Sri Lanka could pass a 20 billion mark by 2020.
He added: “There has been a general move away from the traditional US and EU markets, perhaps due to repeated recessions which have consequently affected our markets.”
He laid out the possibilities presented by the plethora of emerging markets, from the BRICs to the newer MINTs – Mexico, Indonesia, Nigeria, and Turkey. More specifically, the emerging markets’ middle classes pose a great opportunity for Sri Lanka’s exporters. He provided the example of Russia, the middle class of which is slated to reach almost 75% in the near future, as a relatively untapped market as yet.
Dr. Peiris analysed the country’s current situation, suggesting that what exporters required was more information and more foreign partners. He explained: “For the past five centuries, Sri Lanka has exported commodities and had its resources exploited. Foreign entrepreneurs created and controlled the markets – we just supplied. However, since 1948, local entrepreneurs also got into the game using know-how, technology and market knowledge provided by the traditional ruling powers. History has shown that for investing, marketing, and exporting, we need foreign collaborators.”
He went on to differentiate the past situation from the one he proposed by adding that Sri Lanka should not repeat its past mistakes of allowing our products to be exported without value addition, and stressed the importance of strong financial stability.
Newly instated NCE President Mangala Yapa then took the stage, expressing his gratitude to Past President Jagath Peiris and all NCE members for their support. He opened with a succinct overview of the current situation, covering the global economic crisis and Sri Lanka’s own position as an emergent country embarking upon achieving “economic resurgence, social development and lasting peace”.
Yapa admitted that heading the NCE as a business chamber consisting of almost all the country’s exporters was a challenging responsibility, but promised to strive to take “due cognisance of both the expectations of the exporters, challenges and difficulties encountered by the government and create an environment that enables progress and success”.
Yapa expressed a dire need for deep engagement with policy makers in regards to government policy and their implementation, the growing need for skilled and competent employees, support and incentives for innovation, creativity and productivity improvement.
He added that achieving sustainable growth was one of the export industry’s biggest challenges. Yapa also discussed the NCE’s progress in setting up the Sri Lanka Institute of Exports in order to address the emerging skills shortage in the industry and to function as a platform to engage in deep analysis and discussion of issues and policies.
The Ambassador of Japan, Nobuhito Hobo bolstered Dr Peiris’ analysis by discussing the power shift from traditional countries to emerging markets, adding that 70% of world growth over the next few years would come from the latter. He pinpointed Asia’s economic growth, which is expected to grow even further, holding about half of global GDP and trade.
Hobo said that following President Rajapaksa’s visit to Japan last March, the Japan External Trade Organisation conducted a business need survey, which identified the business advantages of Sri Lanka such as skilled workers and strategic geographic location in the Indian Ocean.
In this context, he added that: “Sri Lanka can be a gateway to exports to not only South Asia but also the Middle East, Africa and Europe. Of course, Sri Lanka can effectively utilise the new EU-GSP scheme and free trade agreements with India and Pakistan.” He also stated that export industries could be expanded to include agricultural products, mineral sand, and BPOs and KPOs with high added value.
The Ambassador noted that diversification of the economy was essential to promote the manufacturing sector. He stressed the importance of utilising timely foreign investment, particularly Japanese with the view of networking Sri Lanka effectively in international markets. He concluded his address by expressing his confidence in the NCE’s activities, including “enhancing the export sector through diversification, exploring new markets and promoting trade as a whole”.
Keynote speaker, UN Head of National Portfolio Development for Sri Lanka and the Maldives Rohantha Athukorala, addressed the audience by questioning whether Sri Lanka was driving the export agenda.
Athukorala stated that Sri Lanka’s exports to the BRIC countries after years of promotional and marketing efforts by the private and public sector are registered at 722 million dollars in the year 2013, whilst the MINT countries (Mexico, Indonesia, Nigeria and Turkey) are at $ 230 million, which can be raised up to $ 1 billion in the years to come.
Considering the current government policy that the private sector should drive business with recurrent expenditure reduced to 14.1% of GDP (according to the Central Bank Road Map 2014), Athukorala said: “Pivotal organisations like the NCE must take leadership with the partnering government agencies providing the policy support so that Sri Lanka can achieve the targeted export target of $ 16.2 billion by 2016.”
The speaker furthermore urged the private sector to venture into the newly opening up Iranian market, which records current exports numbers from Sri Lanka at $ 136 million as at September 2013. He added that exports to Iran almost double the exports to China.
Athukorala elaborated: “The proposed FTA with China can spruce this number but once again this require a strong private-public partnership as the current FTA with India is yet at around five hundred million dollars even after a decade of business. In fact it is at minus 5.2% as at September 2013. This means that greater mediation and effort is required to really unleash the true potential of an FTA.”
As former Chairman and current Board Member of the Sri Lanka Export Development Board (EDB), Athukorala mentioned that strong relationships between the NCE and EDB were a must, although the NCE’s announcement of the formation of the Sri Lanka Institute of Exporters was a clear strategy in the right direction.
Pix by Upul Abayasekera