TIME TO SPREAD OUR WINGS
Ahmed Javed underscores the importance of exports in the national economy
Q: How do you view the growth of the export sector in recent years?
A: As a logistics provider, we have certainly witnessed growth over the last few years but not at the same pace as in the past. Several factors have hindered rapid growth in the export sector including the global economic slowdown, changes in policies and so on.
In addition, consumerism in developed markets has changed drastically from the traditional activity we have been used to in the past.
It is imperative that we review and reengineer solutions accordingly to suit these emerging trends. We can no longer presume that people will increase their expenditure when they have more money in hand. Instead, we need to ensure the development of relevant solutions to match their immediate needs.
Q: And how did the export sector perform in calendar year 2018?
A: Data from the Central Bank of Sri Lanka reveals that earnings from merchandise exports, which rebounded strongly in 2017, maintained its growth momentum in 2018 as well. The restoration of the EU Generalized System of Preferences Plus (GSP+) facility and favourable external trade policies, together with strong institutional support and a flexible exchange rate policy, underpinned the performance of export earnings.
Export income increased by 4.7 percent to US$ 11,890 million in 2018 from 11,360 million dollars in the previous year. Industrial exports contributed to the expansion in earnings in 2018 while income from agricultural and mineral exports declined.
Higher earnings from the following sectors contributed to this growth: textiles and garments; petroleum and rubber products; food, beverages and tobacco; and machinery and mechanical appliances.
Furthermore, data indicates that the US retained its position as the chief export destination, accounting for 25.9 percent of Sri Lanka’s exports, followed by the UK (8.2%) and India (6.5%).
Q: In your assessment, what are the policy roadblocks to achieving greater milestones for the sector?
A: Although there are a few policy roadblocks every now and then, Sri Lanka has come a long way from where it was. The National Export Strategy, formulated with the active participation of all stakeholders, is an example of how industries can work collectively to formulate a consolidated plan for the country.
Q: Are existing export processing zones (EPZs) adequate – or is there need for more? And how would you rate the facilities at these EPZs?
A: We need to go back to establishing more EPZs. However, they’ve achieved all they set out to do. The growth of skilled labour in rural areas as well as development in surrounding localities is part of the initial outline of the EPZs.
Another aspect that should be taken into consideration is to work for improved connectivity to ports and airports for goods to move out of the country faster.
Q: What can be done to improve the marketing capabilities of Sri Lankan brands in overseas markets? And in your view, how can the state support these initiatives apart from individual company efforts?
A: Since there are a few well-established Sri Lankan brands across different industries, it is difficult for the state to provide a single solution that would best suit their needs.
However, there should be more collaboration between state entities and private sector brands to leverage on each other’s marketing platforms. At the end of the day, Sri Lankan brands too have a responsibility to improve the image of the country through their marketing or branding efforts.
Q: How much innovation do you see in the export sector in general? Or are exporters relying on traditional commodity exports?
A: We have witnessed multiple innovations in the apparel industry. Certainly, these are a testament to the shift in reliance on traditional commodity exports. Since sourcing markets that focus on traditional commodities are price dependent, it isn’t sustainable in the long run as other countries can offer the same commodities.
The new age consumer is conscious of the environmental impact of products they purchase and it is time we focus on adopting a similar direction for innovation.
Q: Is there further potential for the export sector – and if so, what macro factors need to be in place to achieve this?
A: The export sector has been among the main drivers of economic growth where this trend continues through the creation of a niche market for products and services.
One important aspect is to develop a mindset that revolves around building global brands and working with country leaders – in order to maintain the momentum in expertise and differentiation, while exploring new markets and technologies.
Q: Which untapped products and services could Sri Lanka explore, to grow exports and diversify the nation’s export basket?
A: In terms of technological innovations and devices, there is immense potential especially among Sri Lankan youth. We have witnessed many homegrown innovations that have made it to the global arena.
It is important to continue to support our youth to aim higher and encourage them to use a mechanism to maintain momentum to achieve recognition in this market.