The global meltdown witnessed recently has had reverberating impact across the entire world. The impact on global trade has resulted in what might be a permanent change in global economic leadership.
The global leadership of the USA and some developed countries in Europe in the past has now been challenged by the emergence of new countries which together will be offering global leadership in these spheres. While nations such as the USA are struggling to overcome the adverse effects of the economic meltdown, some of the developing countries are progressing in their economic development at full steam.
The term “rapidly developing economies” is being increasingly used to describe developing countries which are undergoing such rapid growth. Such countries are not contained in one region, but spread across the globe.
Most of these countries have a growing young population with capacity to spend and are offering new export markets to those whose export markets were concentrated in the countries which faced recession. The fact that these emerging markets are not concentrated in limited regions is also a plus factor as exporters would be able to find markets which they find most competitive from their base locations.
The most well-known emerging economies are India, China and Brazil. However there are many more developing countries which are being termed as emerging economies which can be described as substantial markets. Malaysia, Indonesia, Chile, Mexico, Russia, South Africa, South Korea and Egypt are some such countries.
At a time when Sri Lankan exporters are feeling the loss of markets in the West, it might be prudent to take a serious look at some of these markets. An important factor in identifying alternative markets is whether a country has a substantial population with high income and capacity to spend. Countries with high and middle income young population looking for higher quality of life are good markets. In this context, even in the SAARC region, Sri Lanka has markets.
Promotional tools to capture and retain new markets are many. Participation in each other’s trade fairs, visits of business delegations, chamber to chamber contacts are effective promotional tools. However in using any of these tools, it must be kept in mind that results are not instant.
Whether it is a totally new market or slightly penetrated market, continuous visibility over a period of time is of utmost importance. In the case of trade fair participation, continuous participation for about three successive years is essential if the buyer is to build up sufficient trust. The same applies to business delegations visiting a country or being invited to visit the supplier’s country.
An extremely effective and less costly from the supplier’s point of view is to participate in locally organised international trade fairs. With peace in the air and the tourist attractions of the country, Sri Lanka would benefit much and kill many birds with one stone by organising international trade fairs. Directly exporters would benefit, tourism would benefit and the indirect benefits would filter down to many more areas.
Since the intention is also to identify buyers from the emerging economies, promotional campaigns should be targeted mainly at some such countries where Sri Lankan exports have not had substantial penetration so far partly because of the dependence in the past on the developed countries. If a well thought out programme is planned to diversify Sri Lankan exports in the emerging markets, an opportunity lost may be an opportunity gained.
(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)