May, 9, 2024
Sri Lanka's export community, represented by various chambers and associations, has come together to address critical issues hindering the country's export potential. In a comprehensive call to action, exporters have highlighted key concerns ranging from transparency and accountability in government agencies to challenges in accessing global markets and overcoming regulatory hurdles. Through a series of recommendations, they seek to foster a conducive environment for sustainable economic growth and international trade.
The Press Conference was organized by the following –
Against the backdrop of a stagnating trend in merchandise exports, Mr. Jayantha Karunaratne, the President of the National Chamber of Exporters (NCE) of Sri Lanka, seized the opportunity to articulate the pressing issues facing the Chamber's members. Highlighting the gravity of the situation, he emphasized the urgent need for effective policy-making to counteract the stagnation of merchandise exports and propel sustainable economic growth. The stagnation in merchandise exports, despite the occasional increase in Merchandise Exports in certain months, underscored the significance of collaborative efforts between the government and the private sector to navigate these challenges effectively.
Mr. Karunaratne's speech echoed the feelings of Chamber members, who voiced their concerns regarding the adverse impact of the export stagnation on the nation's economy. Recognizing the pivotal role that exports play in bolstering foreign currency reserves and driving economic prosperity, there was a collective call for swift action and strategic collaboration to reverse the current trajectory.
In his impassioned plea for enhanced collaboration between the government and the private sector, Mr. Karunaratne underscored the imperative for joint efforts to formulate and implement policies conducive to sustainable economic growth. This collaboration, he stressed, is essential to address the multifaceted challenges confronting Sri Lanka's export sector and to forge a path towards a resilient and thriving economy. He further stated that long-term steady policies will positively impact foreign direct investments (FDIs) and startups.
In addition to policies, Mr. Karunaratne underscored the pressing need to address outdated laws and regulations that hinder Sri Lanka's competitiveness in the global market. Laws such as the customs ordinance and Labor Laws, among others, are relics of a bygone era and fail to reflect the evolving dynamics of the modern business landscape. Their antiquated provisions not only impede business operations but also deter potential investors and hinder the growth of startups.
To remedy this situation, Mr. Karunaratne advocated for a comprehensive overhaul of existing laws and regulations to align them with current industry practices and global standards. This entails a rigorous review process aimed at identifying outdated provisions and implementing necessary reforms to modernize Sri Lanka's legal framework. By doing so, Sri Lanka can enhance its attractiveness as a business destination and create an environment conducive to sustainable economic growth.
Another hindering factor for exporters was the regulatory burden. Mr. Karunaratne urged for private sector consultation as it will allow governments to streamline regulations, reduce bureaucratic red tape, and minimize unnecessary compliance burdens on businesses, fostering an environment conducive to investment and entrepreneurship. He stated that engaging with the private sector in a transparent and collaborative manner
builds trust and strengthens the relationship between government and businesses. This partnership approach fosters a conducive environment for dialogue, problem-solving, and cooperation on shared objectives, such as economic growth and job creation.
Mr. Karunaratne also shed light on the concerning lack of progress regarding proposed amendments to labor regulation in Sri Lanka. While acknowledging the authorities' initiative in initiating discussions on these reforms and soliciting input from the private sector, Mr. Karunaratne emphasized the urgency of addressing these matters with greater urgency. Firstly, Mr. Karunaratne commended the authorities for initiating discussions on labour regulation reforms and for actively seeking input from the private sector. He recognized the importance of collaborative efforts between the government and the private sector in shaping policies that are in line with present trends and uphold the welfare of both workers and employers.
However, despite the commendable initiative, Mr. Karunaratne underscored the pressing need for urgent action on labour regulation reforms. He urged the authorities to prioritize these reforms and expedite the process of implementation. Delaying these reforms could exacerbate existing challenges faced by workers and employers and hinder the overall progress of Sri Lanka's labor landscape.
Mr. Karunaratne emphasized that these reforms should be within the accepted conventions of the International Labor Organization (ILO), safeguarding the rights of workers and employers alike. This ensures that the reforms are not only legally sound but also uphold internationally recognized standards for labor rights and protections. By adhering to these conventions, Sri Lanka demonstrates its commitment to promoting fair labor practices and fostering a conducive environment for both workers and employers to thrive. This also will encourage FDIs to come into the country.
Mr. Karunaratne also highlighted the critical need to streamline the process for accessing the Madrid Protocol, an essential international agreement for trademark registration. He emphasized the importance of this issue and urged relevant authorities to take prompt and decisive action to address the challenges hindering Sri Lanka's accession to the protocol.
Mr. Karunaratne underscored the significance of accession to the Madrid Protocol for Sri Lankan businesses, particularly exporters. Accession to this international agreement would simplify the process of trademark registration and provide exporters with enhanced protection for their brands in multiple countries. By aligning with global standards and practices, Sri Lanka can bolster the competitiveness of its businesses in the international market and facilitate their expansion into new territories.
Recognizing the urgency of the situation, Mr. Karunaratne urged relevant authorities to provide updates and take timely action to address the challenges hindering Sri Lanka's accession to the Madrid Protocol. He emphasized the importance of expediting the accession process to ensure that Sri Lankan businesses can avail themselves of the benefits offered by this international agreement without unnecessary delays. Timely action is crucial to safeguard the interests of Sri Lankan Brands and promoting fair competition in the global marketplace.
Mr. Karunaratne's statements emphasize the crucial role commercial banks play in supporting exporters, especially in the wake of challenges such as the COVID-19 pandemic and other economic turmoil the country has faced. His suggestion for the Central Bank to relax stringent regulations for the time being aims to provide commercial banks with more flexibility in designing and implementing programs tailored to the needs of exporters. These relaxed regulations could involve loosening restrictions on lending criteria, easing compliance requirements, or providing exemptions for certain types of export-related transactions.
Given the context of the COVID-19 pandemic and other recent economic challenges, the impact on exporters adds urgency to Mr. Karunaratne's call for regulatory flexibility. Many exporters have faced financial difficulties due to disruptions in global trade and supply chains. While commercial banks have stepped in to provide support through specialized schemes, current stringent measures limit the effectiveness of these efforts. Relaxing regulations would enable commercial banks to offer more comprehensive and effective support to exporters during these challenging times.
Mr. Karunaratne emphasized the vital role played by Sri Lankan overseas missions in providing support to exporters and facilitating international trade. He stated that during the Chamber's Overseas Market Access delegation, they received very good support from the Overseas Sri Lankan Missions and Professional Trade Offices. He stressed the importance of implementing further proactive measures to enhance the capabilities of trade officers stationed abroad, ensuring they effectively serve the needs of Sri Lankan businesses operating in foreign markets. By having qualified and capable individuals, Sri Lanka can improve the effectiveness of its overseas missions and better support its exporters in accessing international markets.
One key proposal put forward by Mr. Karunaratne was the establishment of a web portal for trade officers stationed overseas. This portal would serve as a centralized platform for trade officers to provide regular updates on their activities, share market insights, and communicate with the business community in Sri Lanka. By providing transparent and timely information, the web portal would enable exporters to make informed decisions and capitalize on emerging opportunities in foreign markets.
Furthermore, Mr. Karunaratne called for the establishment of clear Key Performance Indicators (KPIs) for trade officers stationed overseas. These KPIs would outline specific targets and expectations for trade officers, enabling performance evaluation and accountability. By setting clear objectives, Sri Lanka can ensure that its overseas missions operate efficiently and effectively, delivering tangible benefits to the business community.
He emphasized the need for regular interaction and feedback mechanisms to facilitate dialogue and collaboration. By fostering strong communication channels, Sri Lanka can strengthen its engagement with exporters and better address their needs and concerns in foreign markets. By implementing proactive measures such as establishing a web portal, defining clear KPIs, and improving communication channels, Sri Lanka can maximize the effectiveness of its overseas missions and drive sustainable economic growth through exports.
Mr. Karunaratne underscored the critical importance of infrastructure development in bolstering Sri Lanka's export sector and overall economic growth. He particularly highlighted the need for improvements in the railway infrastructure, citing its potential to reduce transportation costs for raw materials and other essential inputs across the country. Modernizing and expanding the railway network could enhance connectivity between production centers and export hubs, facilitating the movement of goods and ultimately improving competitiveness in domestic and international markets.
A well-developed railway network offers a cost-effective alternative for transporting bulk cargo and heavy materials, thus enhancing the competitiveness of Sri Lankan exporters. Moreover, a robust railway infrastructure can streamline logistics operations, reduce transit times, and contribute to more efficient supply chain management, ultimately enabling businesses to meet customer demands more effectively and seize market opportunities.
Beyond economic benefits, investing in railway infrastructure aligns with sustainable development goals by promoting modal shift from road to rail transport, thereby reducing carbon emissions, alleviating traffic congestion, and mitigating environmental impacts associated with transportation. This commitment to eco- friendly solutions enhances Sri Lanka's reputation as a responsible global trading partner, further supporting long-term economic growth and sustainability.
In conclusion, Mr. Karunaratne reiterated the NCE's unwavering commitment to working closely with government agencies and overseas missions to enhance support for Sri Lankan exporters and promote sustainable economic development.
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