Sri Lanka – An Export Hub driven by Innovation and Investment
The Government of Sri Lanka through the economic policy statement of the Hon. Prime Minister, made in Parliament on October 27 2016, highlighted that new strategies are required to commence necessary reforms to increase, diversify and introduce innovation in exports development, aimed at increasing revenue, creating employment and reducing Sri Lanka’s trade deficit.
The National Export Strategy (NES) for Sri Lanka is being designed by the Ministry of Development Strategies & International Trade, Sri Lanka Export Development Board ( EDB) and relevant Public and Private Institutions and Chambers The Hon. State Minister of International Trade is the Navigator of the NES process. In addition, a Core Team comprising senior public and private sector officials and an ITC National Consultant have been appointed to advise and give direction to the process.
National, regional and sector specific public and private stakeholders in Sri Lanka was consulted to confirm trade diagnostics, value chain performance, market orientations, strategic issues and orientations. The NES design process will build on and collaborate with the economic development initiatives which are already underway by of the relevant organisations in order to create synergies and facilitate implementation of priorities.
The First National Symposium for Sri Lanka’s National Export Strategy ( NES) was held with over 150 public and private sector representatives to plan the next export growth cycle of the country. Technical Assistance in developing the NES is being extended by the International Trade Centre (ITC) as part of their ‘ EU- Sri Lanka Trade Related Assistance’ project funded by the European Union.
During the 1st NES consultation (April 2017), a strategic vision for Sri Lanka’s export growth was agreed upon “Sri Lanka – An Export Hub driven by Innovation and Investment”. The attainment of this vision is supported by four key strategic objectives guiding the entire NES design process. 1. To have a business-enabling, predictable and transparent policy and regulatory framework that supports exports. 2. To drive export diversification through innovation and the strengthening of emerging export sectors. 3. To strengthen Sri Lankan exporters’
market-entry and compliance capacities. 4. To become an efficient trade and logis
tics hub to facilitate exports.
The NES will assist Sri Lanka’s economic vision of strengthening the competitiveness of the country’s private sector to accomplish inclusive and sustainable growth. The consultative process will lead public sector institutions and private sector enterprises to design a common and agreed plan for growing and diversifying Sri Lanka’s export products and reaching new target destinations. The NES will be designed to achieve a prioritised five-year rapid action- oriented framework to achieve the desired export targets. It will concentrate on a number of priority sectors and key trade support functions, selected based on a quantitative and qualitative analysis of Sri Lanka’s export competitiveness, to ensure a prioritised focus. The selected priority sectors will contribute to a renewed cycle of accelerated export development. The NES will serve the planning instrument to coordinate export development activities of the relevant state and private sector agencies.
The National Export Strategy (NES) will focus on the development and expansion of many new and emerging priority sectors. The focus on some of these sectors will help to invigorate rural economies and create many new employment opportunities. This is part of the Sri Lankan governments’ drive to achieve a target of US $ 20 Billion in exports revenue by 2020.
Priority Sectors and Trade Support Functions
Through an inclusive and consultative process, the following trade support functions (TSF) were shortlisted to achieve the NES vision and strategic objectives and improve the national business environment.
These trade support functions will target key horizontal dimensions of trade that affect the overall competitiveness of Sri Lanka’s export sector, which are: Trade Information and Promotion National Quality Infrastructure Innovation and R&D Logistics While the NES focuses on diversification through support to the NES focus sectors which are ICT, Wellness Tourism, Spice Concentrates, Boat Building, Processed Food & Beverages, and Electronic, Electrical and Machinery, all other export sectors including the mature sectors will benefit from the strengthening of trade support functions.
Following the discussion, the 2nd Consultative Meetings was held from 12th July to 20th July 2017. The main objective of the meeting was to define roadmaps for expanding export and analyse performance of value chains for the NES focus sectors, market orientations, challenges and opportunities. The TSF groups identified the main challenges in the provision of quality and affordable trade support services to Sri Lanka Exporters. The Sector Meeting followed the consultations from 8th August to 12th September 2017.
Subsequently, the Regional Consultations as a part of the design of Sri Lanka’s National Export Strategy (NES) took place in Kandy, Jaffna and Galle from the 18th – 22nd September 2017.
These regional consultations were focused on Central, Northern and Southern Provinces where stakeholders around the country participated at these consultations. Central Province focused on the Spices and Concentrates and Wellness Tourism sectors. A special session also took place on the trade information function to discuss options to improve access of SMEs to relevant and up to date market information. Northern Province Consultation was focused on the IT/BPM and Food and Beverages sectors along with the TSF, Trade Information and Promotion. Furthermore, Southern Province consultations were on Wellness Tourism, Spices & Concentrates and Marine industry covering the Boat Building sector and Logistics as a Trade Support Function. Sri Lanka’s coastal belt with an already vibrant local tourism industry, the NES will consider the economic potential that development of the Wellness Tourism and Boatbuilding Sectors will bring to the local economy. Employment creation as a result of NES focus on these sectors will not be only in the priority sectors, but also in sectors that are ancillary to them. Taking into consideration concerns of local stakeholders in the provinces were important to ensure that the National Export Strategy is truly national in its focus.
Input from provincial stakeholders is important to have a National Export Strategy that takes into account local challenges and opportunities. This will assist in creating vital business linkages between local entrepreneurs and businesses with their counterparts in other provinces of the Island and counterparts overseas. Currently, the stakeholders are in the process of streamlining the Plan of Actions and based on the NES vision and strategic objectives, a list of high priority export development interventions are being defined for integration in the 2018 National Budget.
The inclusively designed NES will represent the ambitions of public and private sector stakeholders for an empowered Sri Lankan export sector. In line with the government’s mandate to provide equal opportunity for all, these sector specific regional consultations will help to develop policies and regulations that are truly national.