SMEs account for $ 7 b in exports

Tuesday, 26 March 2013 00:21 - - {{hitsCtrl.values.hits}}

The Small and Medium Sector (SME) accounts for over US$ 7 billion in exports and the first dedicated SME industrial estate that is being constructed in the north of Sri Lanka in Atchchuvely is a boost to the country, said Rohantha Athukorala, Head of National Portfolio Development (Sri Lanka and Maldives), United Nations Office.

Athukorala was addressing the National Chamber of Commerce KPMG conference on ‘SMEs and Tax Implications’.

The construction of the Atchchuvely Industrial Estate is funded by the Government of India in partnership with the Ministry of Traditional Industries and Small Enterprise Development. A 25-acre dedicated SME zone, it is the first phase of the overall 65-acre land area.

The project is managed by the United Nations Office for Project Services (UNOPS) and construction began last month. It will be ready for operation by September 2013, emphasised Athukorala, adding that the next step will be beneficiary selection by the relevant stakeholders.

“If we are to really support SMEs and make Sri Lanka exports once again become positive, we have to link them to support services such as the EDB, which organises fairs and exhibitions around the world targeting SME manufacturers of Sri Lanka as well as the IDB, which provides sector specific technical support. If this is not done, we will not be able to connect the industrial estates across the country with the rest of Sri Lanka’s growth economy,” Athukorala asserted.

This is where the chambers will have to play a role of facilitation, he added.

Sri Lanka’s overall exports declined by 7.8% in 2012 and in January this year, the numbers have once again declined by almost 20%, which will add pressure to the 2013 trade balance. SMEs contribute to over 70% of the country’s export agenda.

A key question asked at the event was regarding the fallout of the GSP+ and the implications to the SME sector, to which the speaker cited the Bangladesh Export Strategy as one to be emulated. He said that in 1990 Sri Lanka and Bangladesh were at around US$ 2 billion in export revenue, but today the latter is touching $ 24 billion whilst Sri Lanka is still below the US$ 10 billion mark.

The development of SMEs via the industrial zone development agenda can correct this, Athukorala added.