Exporters demand swift action from government

From left: Sri Lanka Association of Manufacturers and Exporters of Rubber Products Chairman Pushpika Janadheera,  National Chamber of Exporters President Jayantha Karunaratne, Exporters Association of Sri Lanka Chairman Ranil Goonethilake, Sri Lanka Association of Software and Service Companies  Chairman Jehan Perinpanayagam, Sri Lanka Shippers' Council Chairman Sean Van Dort,  Tea Exporters Association Chairman Ganesh Deivanayagam and Joint Apparel Association Forum  Secretary General Yohan Lawence
PIC BY PRADEEP PATHIRANA

•  Join hands to share current challenges faced
•  Point out long list of woes hasn’t got any shorter
•  Stress need to sort prevailing hurdles before SL loses competitiveness, which is not too far ahead

By Nishel Fernando 
The senior representatives of Sri Lanka’s key export sector came on to one platform this week to shed light on their list of woes, which only seems to be getting longer, with little being done to address the challenges faced.

Coming together, six associations: the Exporters Association of Sri Lanka, Joint Apparel Association Forum of Sri Lanka (JAAF), Tea Exporters Association (TEA), Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP), Sri Lanka’s Shippers Council and Sri Lanka Association for Software and Services Companies (SASSCOM), along with the National Chamber of Exporters (NCE) took turns to share their growing concerns. 

They reiterated that with the government not paying attention to the issues pointed out could be detrimental to the national economy, especially as Sri Lanka is looking to move towards a positive territory.  

The exporters called for the government’s urgent attention to resolve a range of issues, including time-sensitive matters, which are undermining the competitiveness of the exports.
NCE President Jayantha Karunaratne pointed out that the merchandise exports are somewhat stagnant or even declining. Over the last 20 years, the exports have remained at the same levels.  
“In 2000, exports as a percentage of GDP were 39 percent and it was 22 percent in recent years. The economy has grown and the exports have come down.
We need the government to have consultations with us, so we can work together for the sustainability of the export sector and betterment of the country,” Karunaratne said.
According to JAAF Secretary General Yohan Lawrence, the apparel export earnings, which account for around 40 percent of the country’s merchandise export earnings, are likely to start declining, due to the uncompetitive exchange rate.
He noted that the recent rupee appreciation along with the mandatory export conversion rule is drastically reducing the competitiveness of Sri Lanka’s exports.
“Next eight to nine months, we will see a reduction in exports,” he added.
While the strengthening rupee increases the prices of Sri Lankan exports, Lawrence pointed out that the elevated utility costs have made it impossible for Sri Lankan exports to bring down the prices, to remain competitive.
“Even with this reduction, the cost of power is still Rs.12 cents per kWh, which is still 10 percent higher than the competitors such as Bangladesh and Vietnam,” he added.
He stressed that over Rs.100 billion in profits earned by the Ceylon Electricity Board last year depict the unfairness of the current pricing formula.

While renewable energy is mooted by the industry, he pointed out that the inefficiency and lack of transparency in the government procurement process are unlikely to bring down the cost of power, even in the future. 
“The recent power agreement with Adani at 8.8 cents is well above the rates of renewable energy globally. We should have a transparent and efficient method of purchasing electricity,” he added.
Meanwhile, TEA Chairman Ganesh Deivananygam noted that the Value-Added Tax (VAT) on tea and the absence of an effective VAT refunding mechanism for exports are severely impacting the competitiveness of the US $ 1.3 billion tea export industry.
Millions of rupees in VAT refunds are owed to the exporters since 2010 by the Inland Revenue Department.
“We did a sample survey of 19 of our export companies; at the end of 2021, there were Rs.467 million worth of VAT refunds (owed to these firms) ranging from 2010,” said Deivananygam.
Meanwhile, SLAMERP Chairman Pushpika Janadheera raised concerns about the declining natural rubber output in the country, which could bring serious implications for Sri Lanka’s rubber exports. He urged the government to implement the Rubber Master Plan to meet the industry’s full export potential.
The chambers also emphasized the lack of cooperation of Sri Lanka’s missions abroad.
The stakeholders identified the inconsistent policies and anarchic laws have created a less than conducive environment for the exporters to operate in Sri Lanka, resulting in low investments leading to a deficit in knowledge and technology.