EXPORTERS SHOULDN’T BE OVERLY DEPENDENT ON GOVT. FOR ASSISTANCE, SAYS INCOMING NCE PRESIDENT
The National Chamber of Exporters of Sri Lanka (NCE), the only private sector chamber that exclusively serves Sri Lankan exporters, conducted the 24th Annual General Meeting for 2019 and a post-business forum, at Galadari Hotel, recently.
The chief guest of the event with a gathering of a large number of member exporters and special invitees was British High Commissioner James Dauris.
The first segment of the event was confined to statutory business to elect office bearers and to present the annual report for 2018.
The following were elected as office bearers and members of the management committee, which supervises the overall administration and implementation of the programme of activities of the chamber: President – Ramya Weerakoon, Vice President – Ravi Jayawardena, Vice President – Jayantha Karunaratne, Immediate Past President – Ramal Jasinghe, Past President – Sarada M. De Silva, Hony. Secretary – Kala Amirthalingam, Hony. Assistant Secretary – Parakrama Weerasinghe, Hony. Treasurer – Nilrukshi De Silva, Hony. Assistant Treasurer – Lakshan Algama, Representative from the Council – Indra Kaushal Rajapaksa, Representative from the Council – Dilshan Rajapaksa.
Forty two members for the council, which is the policymaking body that includes the sectoral heads, were also elected.
Ramya Weerakoon, who was elected as President of the NCE for 2019, is the first lady president of the chamber. She is a leading exporter in the apparel sector and Chairperson of Ramya Holdings Group of Companies.
She welcomed the distinguished gathering including the members of the chamber. She expressed her gratitude and thanks to Dauris for accepting the invitation of the chamber. She also thanked the members for placing their confidence in her.
Weerakoon stated the following: The NCE represents the interests of a wide spectrum of stakeholders in the export sector under one umbrella. The chamber is a strong platform to discuss and make representations to state authorities on issues that affect the export trade, in one voice. As members of the NCE and as stakeholders of the exporter community in Sri Lanka, the exporters should make best use of the opportunities in the field of exports to achieve the envisaged national economic development targets of the country.
According to statistics, Sri Lanka is the 85th most competitive nation in the world, out of 140 countries ranked in the 2018 edition of the Global Competitiveness Report, published by the World Economic Forum. The competitiveness rank of Sri Lanka averaged 71.75 from 2007 until 2018, reaching an alltime high of 85 in 2018.
In this background, ‘The Vision 2025’ document of the government is based on a set of core principles, including a strategy for the development of national exports, a social market economy and a skilled pool of workers to match the demands of the job market.
Vision 2025 comprises targets, to achieve an annual export income of US $ 30 billion, increase annual foreign direct investments (FDI) to US $ 5 billion and to create employment opportunities for at least a million Sri Lankans.
The income from merchandise exports of US $ 11.1 billion in 2014 increased marginally to US $ 11.4 billion in 2017 (with negative growths in 2015 and 2016). With the regain of the GSP Plus facility in 2017, the merchandise exports have begun to grow. In 2018, it was US $ 12 billion, in respect of merchandise exports and declared that the total export earnings, inclusive of ICT/BPO and the wellness tourism sector, reached US $ 17 billion.
She stated that whatever the constraints that have come the way of Sri Lankan exporters, due to the world economy or policy changes, the exporters should strive to adopt measures to increase exports to compete with the counterparts, especially in the Asian region.
For instance, Bangladesh, which is a least developed country, has recorded annual exports of US $ 40 billion in 2017. Such exporters should be determined to achieve the envisaged export and economic development targets of the country, without being overly dependent on the government for assistance to do so.
Nevertheless, she stated that the governments of most of our competitor nations have adopted productive measures to boost their exports. For example, recently, the Indian Cabinet had approved incentives for exporters of farm produce, textiles, leather, handicrafts, etc.
She emphasized that the apparel sector, which she represents, performed well over the last three decades, (though there were tough times) without depending entirely on state assistance for its development to become the major export sector of the country, overtaking the once dominant plantation sectors of tea, rubber and coconut.
Advantage for apparel sector
The apparel sector did have an advantage due to the availability of quotas from Western nations, which were an impetus for its early growth. At the same time, the Western nations also had an incentive to ‘offshore’ their production facilities to developing countries such as Sri Lanka because of the availability of low-cost labour.
The relationship of that sector with the governments in power was a strong dialogue to create a conducive environment to take forward the export-centric agenda and not limited to sector-specific proposals. Since the industry was built on cardinal principles of competitiveness in external markets, the best practices in all aspects of the production process, which assured compliance and in time delivery and the need to move forward with sustainability in mind, the dialogue with the government was always based on defendable credible suggestions for implementation, which finally benefitted the entirety of the export sector.
While going through this process of dialogue with the government, the industry itself took the necessary steps to evolve from a mere contract manufacturer to a solution provider by engaging in the total value chain over a period of time, including the commencement of the brand journey. Through this path, it has become a US $ 5 billion industry.
The factors that brought the industry to the current level are no longer relevant to develop to the next level. For example, the labour is no longer cheap in developing countries and particularly in Sri Lanka and availability itself is an issue. Our people are more tech savvy today and are looking for newness. This is the trend.
However, the high demand for Sri Lankan apparels is still evolving due to the fact that the exporters are practicing the best and new self-reliant strategies and high competency in quality in products. The exporters compete on speed as well. These facts contribute so much towards the stability of the sector.
Similar to the apparel sector, all other sectors too could achieve competitive advantages in today’s international markets, through technical advancements, innovations, value addition through research and development activities, etc. These will add identity to Sri Lankan products and give recognition in the international arena. Readiness to disrupt our own identity is the highest level of expectation of the new generation.
Ethical practices and good governance have a definite advantage, since these are some of the key attributes international buyers look for. Also, the word ‘sustainability’ of an enterprise plays a vital role in the business arena. Any business, which has sustained for many generations, is believed to have a competitive advantage over others.
The other important factor is human capital. It is important to invest adequately in a human resources management system to ensure the well-being and motivation of the workforce. She stated that she is a firm believer of this concept and practice it in her organisation.
She stated that the SMES, which consist of 73 percent of enterprises in Sri Lanka, play a vital role in exports and economic development and is also a large provider of employment, as well as a contributor to regional development, since they are located islandwide.
However, it is important for SMES to strive to build on their capacities and move away from the SME status to become large enterprises in order to be competitive through economies of production and win over buyers by incorporating technological advancements, value additions and other key factors. She had herself established as an SME and gradually developed to be a large-scale exporter by upgrading and diversifying as and when required.
She stated that the NCE will continue to play a vital supportive role as a chamber, which exclusively serves exporters of products and services, indirect exporters, as well as service providers to exporters.
For this purpose, the chamber proposes to inculcate some standards among export enterprises such as – payment of fair wages, engagement in fair trading practices, not engage in forced labour, ensure healthy working conditions, practice gender equality, develop capacity in technical skills and management, use environmentally friendly resources and production methods to safeguard nature.
Since buyers in Western countries and other markets demand the above standards, practicing them will enable exporters to reach their required compliance standards with a good market scope. The chamber will support to implement of the above standards and proposes to introduce the award of a ‘Certificate of Conformity’ to member exporters, who successfully apply such standards. The chamber will assist them to attract potential buyers and business partners, by using the Certificate of Conformity.
The chamber will also identify new sectors that are not registered under the membership of the chamber and enrol them as new members to achieve their export-oriented objectives. The chamber will also support the membership to implement environment friendly and green policies by working closely with its affiliates such as the ‘National Cleaner Production Centre’ and INDEXPO Certification Ltd, which offers specialized services related to certification and environment friendly production practices. She concluded by stating that the chamber will provide professional training and skills development, through the National Institute of Exports (NIOE), which is affiliated to the chamber. There will be a better platform to engage in trade promotion activities through business delegations to overseas markets and participation in trade fairs to expand international trade and to promote joint venture investments.
The chamber will also coordinate and work closely with other chambers and associations to make representations to state authorities on common issues related to international trade. For this purpose, sectoral issues will be identified through the relevant ‘sectoral heads’ of the council, to resolve such issues and assist exporters.
Emphasis on R&D
NCE Outgoing President Ramal Jasinghe, in his address emphasized that details of the work programme implemented by the chamber under his stewardship has been presented in the annual report 2018.
Since value addition of most export items of Sri Lanka is below 43 percent, emphasis was placed by the chamber on efforts at research and development (R&D) activities. In this regard, the chamber had entered into an MOU with the Sri Lanka Institute of Nanotechnology (SLINTEC) recently to avail member exporters the state-of-the-art facilities related to R&D.
Active engagement of the chamber in the implementation of the National Export Strategy in view of the benefits that will accrue to exporters.
The need for the chamber to be continually in the forefront raising concerns of exporters, in negotiations of the proposed FTAS while recognizing the role of FTAS in reaching a wider global customer base.
Action taken to extend the professional training courses of the training affiliate of the chamber, the National Institute of Exports (NIOE) to benefit entrepreneurs and employees in export enterprises, as well as school leavers for their career advancement. Moving forward, the chamber will be cognizant of the following issues:
Import on the export sector of Brexit and particularly on GSP Plus benefits. Effective implementation of the National Single Window to facilitate cost-effective and efficient trade as well as FDIS. Resolution of issues related to the maritime and logistics sector.
He also announced the induction and election of the first ‘Council of Patrons’ consisting of selected past presidents to guide the future destinies of the chamber.
Post-brexit scenario
Dauris in his address emphasized on the following key aspects:
In regard to the post-brexit trade scenario and particularly the concerns of the Sri Lanka exporter community on the situation related to the prevailing GSP Plus benefits of the European Union (EU), the high commissioner assured local exporters that the UK would extend the preferential tariff rates to countries which were currently beneficiaries of GSP.
He added that post-brexit Britain will set up a ‘Trade Preference Team’ to introduce preferential market access to developing countries under the EU-GSP scheme to minimize business disruption. This intended system of the UK would be implemented in three tiers and tariff would be set at the same rate as the EU, extending the same preferential tariff benefits enjoyed by countries under the GSP system, including Sri Lanka.
*The UK would remain open and encouraging as well as friendly towards investors and businesses from around the world including Sri Lanka, after leaving the EU, since the UK is an outward looking key trade partner in economic development.