Harsha urges Sri Lanka should focus on export-driven economy

31 July 2015 03:15 am Views - 3017

 
By Chandeepa Wettasinghe
The country’s economy must be driven on exports instead of roads, and Sri Lanka should aim at achieving exports equivalent to 100 percent of the Gross Domestic Product in the long term, Policy Planning and Economic Affairs Deputy Minister Dr. Harsha de Silva said.

“Percentage of exports has been coming down continuously. Exports were 17 percent of GDP in 2010, 14.9 percent in 2014 and if you go back, 34 percent in 2000. That is a lack of focus, and a lack of focus is a lack of vision. That is why you need people to think differently,” Dr. de Silva spoke at the Annual General Meeting of the Exporters Association of Sri Lanka (EASL).

He said that Sri Lanka must plug itself to the world, instead of growing in seclusion through road construction, and said that a national export policy is in the making.

The past regime had followed the Chinese model of economic growth through infrastructure development. However, Sri Lanka did not have the luxury of being the largest exporter in the world as well. Both local and international experts had criticized the Sri Lankan model and said that the 7.5 percent growth was misleading.

The UPFA camp continues to accuse the UNP of stopping the infrastructure construction projects, though some have been continued.

Dr. de Silva said that he had constantly told former President Mahinda Rajapaksa, Central Bank Governor Ajith Nivard Cabraal and Treasury Secretary Dr. P. B. Jayasundera that their focus on the economy was misplaced.

“I used to ask in consultative committees; ‘Mr. President, the exports have fallen once again in comparison to the GDP’; then either the Governor or the Secretary jumped and said; ‘Ah no, no. But Mr. MP, we have other things to do as well. So exports are also a part of this economy. We have to build roads, and do this and do that’,’’ Dr. de Silva reminisced.

He said that it was a completely wrong economic policy. “Wrong, completely wrong. The focus must be on exports. You must understand that there is no future without exports. If you don’t understand that, go away. Give it to people who understand that,” Dr. de Silva added.

He claimed that both he and Prime Minister Ranil Wickremasinghe understand the need of the country.

“We are focusing on exports. If you look at the manifesto we put out, it is very clear. We want to become the most competitive economy in this part of the world,” he noted.

He added that Sri Lanka should compete with similar countries such as Malaysia, Dubai and Vietnam, by being dynamic invest in research and development, and focus on value added exports.

Dr. de Silva also said that the country should stop focusing on export targets as raw numbers, instead working on percentages of GDP in the long term.
Export Development Board (EDB) Chairman/CEO Bandula Egodage had outlined US$20 billion exports by 2020 and US$50 billion by 2050.

“What I asked the Chairman (EDB) was the US$20 billion target by 2020, what does it mean? Then he said ‘It means the same thing as US$10 billion in 2014’, I said ‘That’s not worth the paper it’s written on’, because the focus is not there, if we’re at the same 14.9 percent of GDP,” he added.

He said that Sri Lanka should at least aim at having exports at 100 percent of GDP, as countries such as Singapore have exports worth 250 percent of GDP and Hong Kong with 300 percent of GDP.

Dr. de Silva promised that exporters will be included in discussions and their expertise will be sought in creating the national export policy, as requested by EASL.

 

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Dependence on remittances

Dr. de Silva said that remittances reaching US$ 7 billion presents the sad state of the country, and an export-led economy would improve the situation.
“Remittances is the hard work of poor workers; particularly mothers, wives and sisters who are being tortured and killed, and commit suicide. This is not something we should be happy about,” he said.

He opposed the view of the past regime in attempting to glorify the foreign workers.

“I really didn’t like the word ‘Rata Viruwo’ the past government used—like Rana Viruwo—like they were giving them some honour--but using them to make ends meet. They’re not Rata Viruwo. If they’re Rata Viruwo, somebody should look after these people,” Dr. de Silva added.

He said that the country gearing up exports would alleviate this problem. International economists have criticized Sri Lanka, saying the dependence on remittances is a sign of a deteriorating economy.

The UNFGG manifesto focuses on creating economic zones and jobs in the manufacturing sector, for exports while the UPFA manifesto has outlined election goodies, with a separate section for foreign workers, which include life and health insurance, vehicle permits, and more new jobs.

Businesses are profiting from the plight of foreign workers, creating easier and faster ways of transmitting remittances to the island.