NCE gives ‘food for thought’ to presidential candidates on key challenges of the country

The National Chamber of Exporters (NCE) which represents a vital sector of the economy of the country, viz. exporters of products and services and service providers to exporters, has presented to the presidential candidates 10 key proposals that are challenges to move the country forward.

These proposals are the outcome of deliberations at a forum titled ‘Export Vision 2030’ conducted by the chamber, which had been attended by CEOs of export-oriented enterprises, and entrepreneurs from the exports sector.  The forum was addressed by three prominent business leaders of the country with wide experience in industry and trade, followed by a panel discussion comprising professionals with expertise in specific areas of the economy. The forum provided a lively platform for the participants to highlight their concerns and engage in a fruitful exchange of ideas.

Following this event, the chamber had extensively discussed the proposals and ideas that had emanated out of the deliberations at the forum, among members of the council of the chamber who are leaders of their respective business sectors related to exports.

The chamber has presented the 10 key proposals to the presidential candidates under three captions: 1. Issues, 2. Negative impact on the exporters, 3. Suggestions for resolution; in concise form for purposes of clarity, and positive consideration by the presidential candidates. 

The chamber is pleased to release these 10 proposals outlined hereunder, for purposes of information and discussion among all those who would be interested in the future direction of our country.

Policy proposal of the National Chamber of Exporters of Sri Lanka (NCE) to the presidential aspirants

The proposals that are presented are classified under main subheadings, while the specific proposals are listed in bullet form under each subheading, avoiding descriptions, for purposes of clarity. 

All visions and strategies of the different areas of the economy should be aligned and coordinated in one direction to achieve common economic development objectives.

Issues

1.National Trade Policy (NTP)

It is observed that there is no common National Trade Policy encompassing the entire trade arena. 

Negative impact on the exporters

Misalignment of policy stances taken at different segments of the economy has a counterproductive effect on the economy

Our suggestions 

• An NTP was prepared and published in 2018. However, the relevant public and private sector stakeholders were not adequately consulted. The NTP should be restructured to include a National Export Policy (NEP).
• The prevailing National Export Strategy (NES) of the Government should be linked to the NEP.
• The restructured NTP should cover all areas related to trade, including the policy on Free Trade Agreements (FTAs).
• The annual budget proposals of the Government related to trade should be linked to the NTP.
• The relevant public and private sector stakeholders should be adequately consulted in the formulation of the restructured NTP.
• The NTP should be published in all three languages.

 2. The Taxation Policy (TP)

Introduction of ad-hoc taxes and unavailability of relevant incentives for innovation through research and development.

Negative impact on the exporters

Due to the unavailability of proper incentives for R&D with the consideration of the ROI years, the exporters are discouraged from innovative thinking.

Our suggestions 

• An NTP was prepared and published in 2018. However, the relevant public and private sector stakeholders were not adequately consulted. The NTP should be restructured to include a National Export Policy (NEP).
• The prevailing National Export Strategy (NES) of the Government should be linked to the NEP.
• The restructured NTP should cover all areas related to trade, including the policy on Free Trade Agreements (FTAs).
• The annual budget proposals of the government related to trade should be linked to the NTP.
• The relevant public and private sector stakeholders should be adequately consulted in the formulation of the restructured NTP.
• The NTP should be published in all three languages. 

3. Shortage of skilled labor

Inadequate skilled labor supply for export enterprise labor force, due to the prevailing mismatch of the education system and the skills required by the private sector enterprises. 

Negative impact on the exporters

Unavailability of a constant supply of high quality skilled labor force in adequate amounts lead to lags in the manufacturing enterprises, further leading to detrimental effects on export industries.

Our suggestions 

• Shortages of skilled labor are experienced by important sectors of the economy related to exports.
• A policy should be formulated to change the mindset of the younger generation who avoid certain types of employment, e.g. tea pluckers, cinnamon peelers and rubber tappers. etc. 
• Skills development is a long term process. Therefore, the alignment of the National Education Policy and a restructuring of the education system is imperative to address this issue.
• The priorities of the private sector should be identified and the educational curricula should be changed accordingly to address the needs; it should also include development of the mindset of workers related to innovation and entrepreneurship. 
• The need to import skilled labor to meet shortages has to be addressed, through the identification of the specific needs. 
• However, the import of skilled labor should be regulated to acquire quality labor with regular periodic audits for control purposes.

4. Rationalisation of the number and functions of the ministries

Our suggestions 

• The number of ministries should be limited to a maximum of 30, with rationalised and streamlined functions. Names of the ministries should be incorporated in the Constitution as in the case of the United States of America. 
• There should be a single window at each ministry to cover all institutions under it, to facilitate access to services and streamlined approval procedures. Currently exporters need to obtain approvals from several ministries for their functions.
• Certain ministries have too many institutions dealing with a particular sector. For example, in the coconut sector under the Ministry of Plantation Industries there are around four to five institutions to deal with different aspects.
• The secretary of each ministry should be a competent person who could handle the particular function.
• Ad hoc changes should not be made in respect of officials who handle important functions of ministries.
• One ministry should be established for trade and commerce, and services related to exports should be digitised. Currently, difficulties are experienced by export enterprises in the fisheries sector, where barriers are encountered when importing items for incorporation in export products, by having to conform unwarranted standards that are not required by buyers.

5. Control of corruption

Excessive corruption prevailing.

Negative impact on the exporters

The exporters are not provided with a level playing field as the favourites are treated in a different manner as opposed to others, also such situations lead to penalising of certain companies.

Our suggestions 

• Strict measures should be put in place to curtail corruption both in the public and private sectors.
• A common forum should be convened including trade chambers and the workers unions to identify the institutions and the points at which corruption take place, and develop preventive measures.
• Measures should also be introduced to eliminate or reduce wastage in public institutions, related to their functions which impact the economy. 

6. Political stability

Instability in the political arena. 

Negative impact on the exporters

The exporters are suffering due to instability prevailing in the political system as attracting Foreign Direct Investments and attracting buyers for exporting industries become cumbersome

Our suggestions 

Measures to ensure political stability should be implemented because it is vital to attract both Foreign Direct Investments (FDIs) and local investments.

7. Security and law and order

Negative impact on the exporters

Negatively affecting the exporters as there are prolonged periods of breakdown of operations during threatening time periods as well as decrease buyer confidence.

Our suggestions 

• Measures to ensure security together with law and order should be implemented not only to attract FDIs but also to positively impact the economy, and the lives of the people.

8. Appointments as heads of institutions

Our suggestions 

• Professionally qualified and competent persons should be appointed to head State institutions.
• A policy on loss-making State institutions should be formulated. Loss-making trade institutions should either be closed down or privatised with no exceptions.
• Formulation and implementation of national policies for specific aspects. These should include the following and should not entail unwarranted cost to exporters

A.A Wages Policy should be established in consultation with the private sector to reduce the burden on exporters

B.An Energy Policy 

C.Labour Regulation Policy – this could include the consolidation of the EPF and ETF Departments among other measures.

9. Tracking of the implementation of the annual budget proposals 

Lack of transparency in the implementation process of the annual budget.

Negative impact on the exporters

Lack of awareness of the implementation.

Our suggestions 

• Measures to track implementation of the annual budget proposals by the institutions and individuals entrusted with specific responsibilities should be established.

10. Measures to control undesirable activities of the private sector 

Our suggestions 

• Measures to control or eliminate or mitigate activities of private sector enterprises related to their adverse impacts on the environment to achieve sustainability should be established.