Address of Mrs Dawn Austin- Out going Chairperson, EASL
Mr Mohan Pandithage Chairman and CEO Hayleys PLC; Mr Bandula Egodage Chairman & CEO Sri lanka Export Development Board; Mr Rohan Daluwatte Chairman EASL; Mr Sarada de Silva 1st Vice Chairman; Mr Fazal Mushin 2nd Vice Chairman; Distinguished Invitees , Managing Committee Members, Fellow Members of the EASL, Ladies and Gentlemen........
As I reviewed this Organization's activity over the past year, several aspects of the opportunities and challenges that the Export industry faced came to mind .
The unique nature of this Organization is the make-up of its membership, which is drawn from public and private sector entities. Corporate and private companies, each a member in their own right and, for the majority, originating through the membership of the Ceylon Chamber of Commerce, together with the wider membership of sector specific Associations which are substantively supported in their efforts and functions by the Export Development Board, a true Public sector facilitator and driver, account for the Membership
So, here we have a true Private Public Sector partnership , deliberating, identifying and working towards the common goal of improving and growing the Exports of Sri Lanka.
The Annual Report which is in your hands has formerly recorded the varied activity, and the appropriate comparatives of the EASL against backdrop of global trade figures.
My address to the house however will essentially focus on what have been recurring matters before the Association, the highs (and perhaps the disappointments) as relevant to the industry as a whole .
In August 2012 the EASL submitted its proposals for the consideration of the Secretary to the Treasury through the good offices of the NCED . I am pleased to record that the cordial engagement resulted in several of the EASL's recommendations being favourably addressed in the National Budget.
The aspect of limitations on funding available to the SME sectors has been a major concern to many of the Export Industries whose supply chain is essentially made up of entrepreneurial activity within the SMEs. The EASL records its appreciation of The Ceylon Chamber's initiatives which more recently , brought together the Banking Sector to deliberate with the Stakeholders s to how they can work together to achiev growth and prosperity.
As a result an improvement in awareness of each other's perceptions, and the need to address the cost of finance for SMEs has been evidenced, but is not sufficient for us to be able to stand up and say the Sri Lanka has a strong and vibrant SME which will auger well in the long term if achieved.
The EASL is mightily aware that unless the small and medium entrepreneur community is given the focussed support and direction they need to enable them to grow in a sustained manner, we will have an unbalanced economy not too far down the line.
The facility of a significant Tax concession to access private laboratories at the same concession available previously for Lab testing using the Government's facilities, was also a response to a request made by the EASL.
Unfortunately, the request for relief to meet the high cost of Energy in the Export sector is one where consideration has not been forthcoming. It has been explained by the Experts that the cost of Energy generation will reduce in a few years time – the rationale for which I have not been able to comprehend!
Whilst it is recorded that India continues to be Sri Lanka's largest trading partner, the Exporters Association of Sri Lanka have alerted the authorities that despite the Free Trade Agreement between Sri Lanka and India being in place, that there are inexplicable and insidious Non Tariff Barriers being implemented to dissuade SL Exporters from tapping into supplying the vast Indian retail market.
We commend the action taken by the Sri Lankan Standard Institute and the Commerce Ministry to take this matter up with a high level Indian Delegation and we believe that redress is in sight.
However , it is imperative that Exporters continue to bring any anomalies they may experience in developing the Indian Market to the attention of the EASL /SLSI /Ministry of Commerce to ensure that all aspects are covered with an effectively implemented Mutual Recognition Agreement (MRA) on standards, testing and certification between the two countries which is outside of the terms of reference for CEPA
Although the Tea Industry is well served by more than one Organization, our membership has constantly recorded that the unrest in the Middle East has disrupted their business in many ways.. viz a viz their inability to trade and receive payments without issues. Trade sanctions imposed by the US continue to curtail activity with Iran.
In a different vein, the decline in volumes of Tea production as also the cost of production is also applicable to other Agriculture related activity and is a cause of grave concern.
Amongst reasons attributed for the angst over the decline in production of our conventional established exports of Tea & Rubber and are the fact that
Plantations are very old and that there are many vacancies unfilled in the field.
The Rubber industry needs more production to meet the growing demand globally .
Serious labour shortage in the country
This brings me to the reference to a serious shortage of Labour in the country as one that has been reflected across the Board with an unabated frequency, and I would urge the Authorities to address this aspect without delay.
This dearth of persons is most evident , particularly in the Agriculture based sectors, which are necessarily labour intensive, The application of Technology based solutions have their limitations and can be non-functional and/or too expensive an investment, unless economies of scale kick in. However, except for a few large scale fruit production areas, several millions of entrepreneur households will not be able to afford the expense and will need to depend on the use of Labour to achieve their targets.
To compound the problem is the fact that the success of the Government's effort have provided better education often leading to high school and tertiary educated youth, who for the greater number, preferring blue and white collar jobs. An ageing population has and will continue to remove from the work force a further number of workers. ( The consistent theme of the teledramas reflect this new culture) .
The returning housemaids whose incomes have sustained Sri Lanka's forex inflows are hardly likely to go back to sustain agriculture. This is really serious. So what do we do? Will we have to look to importing labour ten years from now ….. or may even be earlier ?
A couple of weeks ago, the news media reported that GSP+ for the EU was once again being considered. There was great excitement in the Exporter Community that at long last the mantra for Sri Lankan Exports would be tangible and the country would be able to regain its competitive edge and recover lost ground.
With a greater number of Countries joining the EU there are fewer emerging markets in Europe accessible for Sri Lanka. At the end of the day, the economically strong Asian countries are themselves not Buyers of certain lines of products from Sri Lanka as they themselves sell the same skills and resources that we do and manufacture or produce the same items.
Unfortunately this excitement died like a damp squib when an announcement was made last week that the application for review of GSP+ was not in the pipeline.
The fact that the 'news' hung in the air for even a short while gave the impression that it was not a 'smoke without fire' situation, and the benefits anticipated would have energized the Export Sector like no other incentive can ever achieve. This will be a dream come true for many sectors and, if there is any possibility, I would urge the Authorities to consider this facility as a special case which will, without a shadow of doubt, result in exponential growth.
On the subject of GSP+ , a recent announcement has determined that Sri Lanka has become eligible to the new GSP + facility introduced by the Government of Norway which came into effect from 1st January 2013. The new facility has increased the product coverage and widened the concessions and has provided an opening for lower middle income countries to diversify their exports and exports of Textiles and Apparel. With the introduction of Norway GSP+ facility, Sri Lanka is entitled to enjoy duty free access for all industrial products, including all textile items. Sri Lanka's exports to Norway were Rs 2.5bn in 2012 and nearly 40% of the exports were textiles and Apparel. The facility also provides preference on selected agricultural products which will be of benefit for certain agricultural exports from Sri Lanka.
So with that Rainbow of opportunity of a new GSP+ , amidst the storm over GSP+ to the EU I would like to conclude my address with a few sincere words of thanks from the bottom of my heart to the amazing team of colleagues whom I have had the privilege and the honour to work with during my 2 year tenure of stewardship of the EASL.
We have achieved a lot, but the work is not done. There is an open road ahead of you … there may be a few rocky stretches, but we have learned that problems challenge us to find solutions… and each of you has it within you to create , in your own way. So I wish each and every one of you every success.