EASL AGM - Speech of Mr. Anura Siriwardena, Secretary, Ministry of Industry and Commerce
His Excellency Y. K. Singha, High Commissioner of India in Sri Lanka, Mr. Rohan Daluwatte, Chairman of the Exporters Association of Sri Lanka, Members of the Head Table, Members of the Association, Ladies and Gentlemen,
It gives me great pleasure to address you at a moment when Sri Lanka has reached a significant milestone in her history. Within just four years after ending the thirty – year war that devastated the lives of our people, we have been able to reach the status of a middle income country, with a growth rate exceeding 7% and a per capita income over USD 3000. During last year, the economy recorded a growth of 7.3%, with a per capita income of USD 3191. The remarkable progress achieved hitherto, has made us optimistic of an even brighter future, that we are now setting ambitious targets for an 'unstoppable' development process of Sri Lanka.
I am happy to see that these favourable conditions in our country have yielded positive results already, which is signified by an impressive year - on - year export growth of 16.08% from January to June this year, when compared to the exports of the first six months in 2013. This positive growth trend could be observed in almost all product sectors.
Thus, from now on, the Exporters Association of Sri Lanka has even a bigger role to play, in reaching the target of doubling the export value to USD 20 bn and to record a trade surplus by 2020. The blue print of the strategy to achieve these targets is currently being drawn up by the Export Development Board under the guidance of our Ministry.
In this endeavour, it is vital that we keep in mind that the key words for today's export sector have become 'value added' and 'knowledge based'. We have now realized that R & D is the ultimate key to a knowledge based economy, where the productivity and value addition, as well as innovation and the manufacturing capabilities of the people, are high and growing.
As such, we should make revolutionary changes in the export sector as well as in related sectors in terms of improving technology transfer, innovation and R & D as well as services such as information technology, telecommunication, logistics, transportation etc. in order to create an enabling environment to reach the targets envisioned, which the government assists through many initiatives. In order to facilitate technology transfer, almost all the machinery and equipment could be imported to the country, duty free, while some are even exempted from the payment of VAT. Under the TIEP scheme, value added exports are encouraged by exempting the Customs duty paid on imported inputs, while the imposition of a Cess on exports of items in raw form is an indirect measure of promoting domestic value addition. The establishment of institutions such as SLINTEC and the triple tax benefit offered for R & D activities are some such efforts to add value and to innovate. Similarly, the Reference Pharmaceutical Analytical Laboratory, the Digital Rapid Prototyping Facility and the Die and Mould Facilitation and Development Centre were established by the Ministry of Industry and Commerce, with the collabouration of the Universites of Moratuwa and Colombo, to provide opportunities for product development and improvement. However, it is also important for the private sector to increase their investment in R & D.
Further, I would like to stress that an enabling environment to boost up exports has been created by the government, under the guidance of His Excellency the President Mahinda Rajapaksa. You could witness the massive infrastructure development taking place across the country, including the construction of international air & sea ports, highways and an improved road network, which pave the way towards making Sri Lanka, a commercial hub, with efficient connectivity with the rest of the world, as well as within the island. These enable you all to improve linkages within supply chains and in turn, reduce your costs. Similarly, the implementation of the ASYCUDA World is a successful endeavour of the Department of Customs, which is an efficient and a low cost procedure for both importers and exporters.
Due to the advancement of the telecommunication and IT sectors, transactions have become swifter and more accurate, and as a result, the barriers to international trade are fast receding. Hence, we must make use of the growing trend of creating “global value chains”, where the different steps of manufacturing an item are spread across the globe. In the short run, the export sector must contrive to link up with these global value chains and manufacture high quality intermediate inputs, which would contribute to technology transfer and to create a global brand image for Sri Lankan products.
It must also be noted that at present, the export basket of Sri Lanka is limited to a few number of items such as apparel, tea, rubber products, gem & jewellery, spices etc. Hence, diversification of our exports is important, especially targeting niche markets which prefer specialized, unique and branded products. The several bilateral and regional trade agreements which offer free or preferential access to India, Pakistan, SAARC and some ASEAN countries provide ample opportunities to diversify our exports through the duty concessions given. I invite you all to work closely with the Department of Commerce and the Export Development Board under our Ministry, to seek opportunities to enter into new markets and expand the opportunities in existing ones through these agreements.
At present, we are in the final stages of our preparations to sign the China – Sri Lanka Free Trade Agreement, which we are optimistic, would open up many opportunities for our exporters to exploit the largest market in the world and our importers to bring down goods, especially low – priced intermediate goods & machinery, duty free. In addition, we are on our way to build closer relations with the BRICs, CIS and African countries, with the view to improve Sri Lanka's trade with these countries.
Finally, I would like to leave a note of appreciation to the past and present members of the Exporters Association of Sri Lanka, especially to the Managing Committees that have served throughout its history, for the excellent contribution that they have made towards the advancement of the export sector of this country in many avenues such as capacity building, resolution of issues faced by exporters, as well as working out better opportunities for exporters by coordinating with relevant government institutions, to name a few. Hence, I am much thankful for the service rendered by the Association to the development of this country through the generation of the much needed export income.
Further, I would like to wish the Exporters Association of Sri Lanka, all the best for its 17th AGM and for its future activities, that would, I am confident, contribute significantly, in accelerating Sri Lanka's development process, towards making the country, the 'Miracle of Asia'