JAAF criticises inconsistent policies amid political promises to boost exports

By Nuzla Rizkiya 
As all political manifestos, ahead of the elections, are filled with promises about boosting exports, the Joint Apparel Association Forum (JAAF), the apex body of Sri Lanka’s apparel sector, voiced sharp criticism regarding the inconsistency in translating these promises into action, warning that this long-standing issue has severely undermined Sri Lanka’s global competitiveness and investor confidence. 
Speaking at a recent webinar, JAAF Secretary General Yohan Lawrence pointed out the lack of real progress in the export sector, such as the stagnation of Sri Lanka’s apparel export income between US $ 5-US $ 6 billion over the entire past decade, despite the strong emphasis on supporting exports in all presidential manifestos. 

“Everybody talks about a resilient export economy and every single document highlights the importance of exports. But right now, we don’t have a set of consistent policies that can actually put those into play. There isn’t a queue of people outside the BOI waiting to invest in our industries. If we’re not going to create an environment for our existing local investors to grow, then it’s not going to happen,” Lawrence said addressing a webinar titled ‘Public Priorities for Ninth Presidency’, organised by the International Chamber of Commerce.
In addition to raising the issue of the impending removal of the Simplified Value Added Tax (SVAT), which he described as a “huge blow” to the industry, Lawrence stressed that the inconsistency of policies, along with the high tax rate imposed on the exporters, are factors that continue to erode the local investor confidence. 
“These words are very nice, resilient export economy but you need to put those words into action. Our call since day one and this is not particularly for the merchandise sector, is that put those goals into actions; put those policies in place,” he said. 
While this inconsistency of policies poses long-standing internal challenges for the export sector, it also generates severe external challenges, such as attracting global investors, who have the option to invest elsewhere. 
“Right now, if we take apparel, every other country (e.g. Bangladesh) has a much better offer on the table. If an exporter, who is not offered any incentive and is going to have to pay 30 percent income tax when he could get a tax break by investing somewhere else, why would they invest in Sri Lanka?” he questioned. 

Even if Sri Lanka’s apparel sector has made significant advancements in technology adaptation and product innovation compared to the other countries in the region, the country’s export sector overall is in pressing need of stable and long-term economic policies to catch up in the global race for investments, according to Lawrence. 
“Unless we have a clear, consistent policy and have some action behind these words they say, we just won’t be ready,” he said.