Bandula meets EDB team, discusses exports revival

• Moots revival of export promotion villages islandwide, to provide 45% of seed capital
• Plans to submit proposal in January to get Rs.5 billion budgetary allocation from Finance Ministry
• Asserts no changes in existing export development programs including National Export Strategy 

 By Charumini de Silva

Bandula Gunawardena, the International Trade and Investment Promotion Minister appointed by the Sirisena-Rajapaksa Cabinet, on Wednesday met with top level Export Development Board (EDB) officials for a performance review and to discuss future plans to bolster the export sector.

The International Trade and Investment Promotion Minister Bandula Gunawardena

The discussion mainly centred on the current performance of the export sector, ongoing export development programs andthe sharing of ideas from top level officials on future strategies to expand Sri Lanka’s international trade.

“I have proposedthe EDB and Department of Commerceofficials to come up with a concept to introduce 5,000 export processing villages island-wide, which will help to further expand our exports from the grassroots level, while empowering SME industries to upliftthe rural economy,” the Minister told Daily FT. In a recent gazette issued by the Government, the Department of Commerce and Export and Import Control Department, which was previously under the Industry and Commerce Ministry,was moved under the purview of the International Trade and Investment Promotion Ministry.

According to the Minister, the 5,000 export processing village concept will be structuredwith input from the EDB, Department of Commerceand private sector advisory committeesas a public-private-partnership (PPP) initiative. The concept will consist of export product processing villages as well as export services processing villages. The ministry hopes to meet agro-based private advisory committee next week to discuss the proposed concept, current challenges faced and way forward.

“There are over 14,000 villages islandwide and of that if we can develop at least 5,000 export processing villages that will enhance our existing exports to a great extent, while empowering small and medium-scale exporters to earn a sustainable income,” he added.

Gunewardena also said that they hoped to provide 45% of the seed capital to these village level exporters under this new concept. 

“Although there are small and medium-scale exporters already providing raw materials to major export companies in the country, they are not functioning in anorganised manner. Thus, we want to encourage small clusters at the village level to form their own companies, where they will be provided with Rs.1 million or 45% seed capital and 55% ownership of the company, while the balance 45% will be held by provincial level officials,” he explained.

He said the companies would be operated as a PPP, where the prices for export products and services will be decided by the formed company and overseas buyer.

“I am keen to submit the final proposal to the Finance Ministry regarding the export processing villages in January to formally include it in the Budget proposal to allocate Rs.5 billion for the project,” Gunawardena added. 

According to the Central Bank’s latest External Sector Performance report, earnings from merchandise exports increased by 3.7% year-on-year to $ 1,037 million in August 2018. It was also the third consecutive month that earnings from merchandise exports surpassed $1 billion.The EDB has set an ambitious export earning target of $17.4 billion by the end of this year.

The Minister asserted that they were going ahead with the existing programs without any change at the EDB, including the National Export Strategy (NES). In addition, he said that he had no intention to make any changes at the top level officials of the EDB. 

The key objective of the five-year NES is to increase capacity of Sri Lanka export sector, improve trade performance, competitiveness and ensure different sectors of the economy become more competitive to get a share of the global market in reaching its goal of $28 billion in exports by 2022.

International Trade and Investment Promotion Ministry Secretary S.T.Kodikara, EDB Chairperson Indira Malwatte, EDB Director General Jeevani Siriwardena and all department heads as well as other senior official of the EDBwere also present at the meeting.