Protect trade from misguided ideologists: Amunugama

Thursday, 28 November 2013 00:01 - - {{hitsCtrl.values.hits}}

By Kinita Shenoy

Tuesday’s IPS launch of the Asia Pacific Trade and Investment Report (APTIR) for 2013 saw Senior Minister for International Monetary Cooperation and Deputy Finance and Planning Minister Sarath Amunugama calling for a proper policy mix to boost Sri Lanka’s economic development story. Amunugama stated that domestic agricultural production would help rebalance our economy and that our main export items – garments, commodities, tea and gems – are all managed privately despite the systematic attack on rubber and tea. Insisting that the country needs to protect its trade and main export commodities from misguided ideologists, the Minister explained that “socialists can’t be exporters”. He used the example of Dipped Products – as one of Sri Lanka’s foremost industries, which accounts for about 1% of Sri Lanka’s industrial exports. With the factory closure due to what he termed “disruptive elements,” however the rubber farmers now receive just Rs. 240 per kg for rubber whereas they used to earn Rs. 600 per kg. “This is the real cost of the Rathupaswala closure,” stated Amunugama, explaining that the country needed to move towards value added export models that could pass on their higher profits to farmers and employees. He expressed confidence in the country’s potential, adding that complacency needed to be replaced with value addition in every sector. The Minister explained that despite optimistic reports, developed countries will not keep allowing their markets to be flooded. The growth of developing countries such as Sri Lanka was predicated on key advantages such as low labour costs, which will soon be aggressively countered by science and technology. Hence, the country cannot rely on just elephants to draw in millions of tourists, and needs to fashion trade policy to realistically push growth further. He referred to the APTIR report to add that rebalancing in terms of regional demand must be looked at in a country-specific way. While the BRICS can look toward domestic demand and addressing internal disparities to address the challenge to their growth, a smaller country like Sri Lanka needs to look at niche markets, value additions and specialised services. Amunugama also added that China transformed its economy via export-led growth by offering very low labour costs coupled with stable government – which were primary factors for investors to rush in. He added that while not a commendable strategy, China is the only country that dealt with dissidents and unions by sending them to lunatic asylums. The Minister did however advocate the confrontation of disruptive elements and sabotage in a realistic, firm manner.