ADDRESSED BY THE GUEST OF HONOR - MR. BANDULA EGODAGE, CHAIRMAN & CHIEF EXECUTIVE, SRI LANKA EXPORT DEVELOPMENT BOARD
Good evening ladies and gentlemen. Honorable Dr. Harsha de Silva, Chairman, party chairman and all members of the Export Development Association. Members of the media.
First of all, thank you for inviting me for the third time to make my Export Development Board presentation to all of you. It's a great honor and privileged to say a few words at this moment.
In fact, I am not going to change what I have been constantly have been saying. Export driver and other major drivers during the last three years. So actually your president gave you a real update, so these are a few insights for you to understand how this export is faring in relation to Sri Lanka.
What I am trying to say is that today, ladies and gentlemen, my first slide is starting with this. ‘Thank you' for all the great effort, we are vacillators and you are the people who really do the job to take all export earnings to our country. So once again, thank you very much.
We are just making some comments on some of the insights. I would like to start with a little story. Three months ago, I invited today's chief guest to my own institution, the EDB. When I say that we will target 20 Billion by 2020 Chairman, you all know that, the export target was GDP, you all are nowhere. Today sir, I am correcting without knowing that you are the chief guest.
You can see the exports towards 20 Billion. Again the key drivers. We from the government side, there is no major rocket science. For you to achieve what you are targeting there are three key drivers that is value addition, product market diversification and the last one being Hi-tech products. So in the product basket, it is based on these three areas.
I now want to give you some insights on what we are doing right, where we are faring well and are we doing enough. Starting with value addition.
Ladies and gentlemen, look at this scenario.
Tea: Take the total value and volume. Value addition is 50 and so is volume. So where are we heading? What is the purpose of value addition if you are going to sell the same product the same way in the same volume? Even though we say we are selling tea with value addition. What exactly are we referring to when we say that? That was for tea.
Look at the Cinnamon situation. 85% of the Cinnamon we provide to the world look at the volume 33 million and value is 25. Basically if you look at it these three things, it's again 50/50. Are we really doing value addition?
Look at Seafood. Seafood value addition. Are we doing value addition when we change the taste of it? Please protect the seafood as it is. Maintain the freshness. Make the branding different, the packaging. These are some of the insights I wanted to share. That basket we are talking about value addition, you have to be able to pick and choose for the product.
Are we doing it right? Are we doing enough? It's not.
Market diversification
what does it mean? While sustaining the main market, we want to look at a new market. Just look at the USA, there's 25% of the total exports by USA. Depending on the USA has come down, but their exports have increased. The trend is right, but as Dr. Harsha de silva insisted, we are doing something, but it's not enough as a challenge.
Look at the UK, market, its growing slowly, but the dependability is going down. Look at India, the exports are growing. While sustaining the current market, we want to achieve from other markets as well. This is the new market we have gained. 11 Billion Total.
We are not satisfied with it, but the trend is right. Yet we need to do more.
Product diversification:
It's a very simple theory, you can in 1990, 2000 and 2014 and now we have about 3,375 products. We basically in the right direction, but is it enough? 80% is non-traditional sales. Even here it's 50/50.
So it's not enough. The third one I am referring to is
High-tech:
High-tech is the global definition; it means research and development you incur into your rating. A high-tech product means high value products. We need to go for high-tech products because it has higher earnings. What are the ones we have? We have the raw minerals but are we doing it the right way to export it. I don't think so.
Look at the IT BPO. That is a high-tech product and services. Branding? Are we doing the real branding? Ceylon Tea, Ceylon Cinnamon, and Blue Sapphire – we have the brands but we are not doing the right branding.
Research and Development:
We need to invest more on research and development. Expenditure as part of GDP, the last red line is Sri Lanka. When we talk of high-tech it's is the percentage of research and development in the industry. So here research and development remains in the last row, so how do we expect high-techs products. These are just insights that I want to share with you all.
Some of the other Asian countries. Look at how Sri Lanka has evolved. Sri Lanka, Bangladesh, and Pakistan. The latter being known for pharmaceuticals. It shows Pakistan as considering pharmaceuticals as high-tech products.
Now I am going to this one but I don't want to go into details.
Towards the 50 billion target. What do we have to achieve that? The infrastructure is there, the skilled labor is there, advantage of geographical location, economic total, taxation, literacy, government policy, hub concept is there. But why are the exports not increasing.
If you don't have the right value addition, don't categorize it as value addition. How do you work towards 50 Billion targets? It's not a question. Come out with an FTA. Talking about these areas. Existing agreements, you are talking about GSP plus, which the current governments is trying hard to get. FTA plays a large role. We have with India and Pakistan, but we need to have another one with China, so that is another aspect.
I am not going into research and development in detail. I am not going to show you the slides because it will take time. We have a budget for this, innovating, reverse engineering like it's done in China. Energy saving, advance technology.
The next one is basically FDI. It's where the money is. Foreign direct investments, we don't have much of it. Not to capture the Sri Lankan market but the others. At the end of the day we need to increase exports and the quality aspects.
Ladies and gentlemen, I know Dr. Harsha de silva will give me a very good support to develop the national export policy. We have some good guidelines but if you really ask me, we don't have the proper national export policy. We just finished an internal policy.
Trade facilitation:
It's an important factor. One stop shop. Simplified products, E-business is something too. To achieve these we need to make a move. These are just insights. SME developments. You all are SME, if you recall how you all started.
We need to have a global supply chain, venture capital. Export promotion zone, something which the government announced since recently. We need to capitalize on all this to make the 50 Billion markets. Are we doing right? Yes, the trends show that. But are we doing enough? That is the big question.