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Friday Nov 15, 2024
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In the 1970s, the International Trade Centre (ITC), the United Nations Conference on Development of Trade and Tariff pushed the establishment of Trade Promotion Organisation (TPO) in member nations with the objective of promotional development of export trade. The establishment of the Export Promotion Secretariat in 1972 by Sri Lanka to support export development became a fiasco. This enthused the business community to open dialogue within their community to determine the urgent necessity of a national body for the promotion and development of export.
The Sri Lanka Export Development Board (EDB) was established on 1 August 1979 under the Sri Lanka Export Development Act No. 40 of 1979. The first significant step of this Act was to enforce EDB with wide powers on export promotion and development for performance of its duty at the highest standard in the best interest of the nation.
Unique structure
The structure established for the EDB was unique. An Export Development Council of Ministers was formed under the Chairmanship of the President. The Ministers of Trade and Shipping, Industries, Fisheries, Finance, Foreign Affairs, Planning and Rural Industries were the other members of the Council. The objective of the Council was to advise the EDB with directives for prompt execution of the decisions taken by the Export Development Council of Ministers. This feature could not be perceived in any of the government institutes. Hence it is an attempt of a direct showcase of national interest on export promotion.
As a leading government institution in respect of export development , the EDB was entrusted with duties of greater responsibility such as to advise the Council of Ministers on national export development policy; to formulate National Export Development Plans; to facilitate the supply and diversification of products and services; execution of research and market development programs; to help resolve the issues involving the exporters within the government; develop exporting skills; extend advisory assistance to the exporters and improve international relationship with related agencies et al.
Remarkable contribution
Recalling past experience, it gives a great pleasure to print a brief note on the remarkable contribution made by EDB, worthy of emulation, during the past 35 years. Incontrovertibly, it is a magnitude of activities covering a vast area in development of export trade. Implementation of National Export Development Plans, simplification of export procedures, formulation and implementation of financial assistance schemes, organising exporters’ forums, inward buying missions, buyer seller meets, trade fair participation, solo country exhibitions , national expo exhibitions, operation of trade centres, publishing business magazines, developing branding strategies for selected export products, strengthening relationships with TPOs of other countries are some its valuable accomplishments.
It is an obvious fact that Sri Lanka exports before 1980s totally depended on considerably a limited number of products exported by a handful of exporters. The major exported items were not products but only commodity items. Today Sri Lanka prides herself in exporting nearly 3,600 products to the world over with an approximate number of 4,500 exporters directly involved in export trade. During the last 35 years it has managed an average growth rate of 7% annually except for the last few years.
This is a showcase of the effort dedicated on development of supply base, diversification of products and services and export markets and introduction of new products during the last 35 years. Remarkably this vast progression of development has opened avenues of employment opportunities in greater extent uplifting the social life of the nation. EDB is complacent with slender pleasure as a responsible partner to the progressive development of the export trade by its dedicated contribution made during the years.
Challenges
It is a recognised fact that globalisation, development in high technology, huge competitions and new social change have revolutionised the entire global atmosphere. This unprecedented environment has created new challenges to the progress of TPOs in developing countries. As a leading TPO in Sri Lanka the EDB should be prepared with proper strategic plans to brave any challenge that will come across in future for the benefit of the nation irrespective of personal interest. EDB should realise that today there are various other institutions in the business arena for export development.
At the initial stage of beginning the open economy, a very few number of chambers and institutions were functioning in Sri Lanka. As a newly-instituted statutory board, EDB with its skills and competence was able to attract the admiration of the Business Community. Obviously, a large number of business institutions have come into operation with massive development structure today. A fair number of exporters have become members of these new institutions, leaving business transactions with the EDB. The time is ripe for EDB to give high priority to attract those exporters back to EDB with new strategies and incentives while strengthening the existing activities.
It is important to review as to why the exporters leave EDB and mostly deal with the other association. EDB should immediately draw its attention to win their influence in building trust with them.
National Export Development Plan
The implementation of the National Export Development Plan is a main responsibility of EDB Plan. The objective of the strategic plan prepared by EDB for 2010 to 2015 was to achieve US$ 15 billion exports by end of 2015 with a 13% annual growth rate. The plan for 2010 to 2015 was prepared at the unfavourable situation due to international crises in Europe.
Most experienced officers and professionals advised that the actual realistic target is a 9% increase. But those who drew the plan made an annual increase of 13%, which was a harder target. On the other hand, no new strategies seem to have projected except the same long time promotional tools followed throughout. Today other associations related to exports are now working to have the micro plans presented to the Government with realistic targets.
It is understood that the new Export Development Plan is being prepared projecting for the next five years. The noble objective of the Plan should be to serve the nation not to satisfy the political needs. Therefore it is the duty of the Board to take necessary measures at the earliest to call for views and suggestions from all parties concerned including general public in an attempt to achieve best results by a better plan.
Expo exhibitions
Other concern factor is the outcome of the Expo Exhibitions. Sri Lanka Expo 2012 has been recognised as the most important event as highlighted by the EDB with visit of 1,000 buyers. At the press conference of the Expo exhibition, the EDB Chairman declared that that Sri Lanka’s export sector looking at a revenue expectation of $ 12 billion as a direct result of the Expo.
As per the Expo website, confirmed orders to the value of Rs. 8 million ($ 66,000) have been received. This is a very negatable negotiable value compared to the previous Expo exhibition organised with less facilities. It is obvious that the Expo 2012 has been mainly used to build personal image and not the interest of the nation. It may also be a cause for exporters to turns towards to other institutions.
The present EDB Chairman also highlighted to the press after ‘Reflection of Sri Lanka’ organised to coincide with CHOGM increased exports were expected as a direct result of ‘Reflection of Sri Lanka’. It is now time to evaluate the real results of ‘Reflection of Sri Lanka’. Most importantly, a virtual follow-up procedure will showcase expected results. There is a possibility that this situation might affect the future of the EDB.
Presidential Export Awards
The EDB should be proud of its presentation of the Presidential Export Awards (PEA) because it is the highest and most prestigious award presented in appreciation of professional competence exhibited by the export community in boosting the national economy.
Many other similar awards came to light after the introduction of the PEA by the EDB. This presentation was celebrated from 1981 until 1994. After a lapse of 13 years, this presentation was again introduced by President Mahinda Rajapaksa’s Government in 2007 in consideration of its prestigious value of honour to the business community.
The writer has written two articles on the importance of the Presidential Export Awards highlighting how it affects building for new export culture. In analysing the PEA of 2010 and 2011, it was found that most important parts relating to the PEA evaluation have been omitted and this could be seen in PEA applications for 2012 too. Another factor is that the allocation of an award made from the beginning for the service provider has not been listed this time.
The confrontation of challenges from external forces supported by internal forces against the implementation of PEA after 2007 was braved with courage over an intense struggle in a bid to protect it. The recognition of its prestigious value and national significance was the main supporting factor to protect the PEA. But in view of the present situation, suspicion will arise if the PEA is scrapped in the near future.
The EDB Act
Another important factor that EDB should seriously consider is the powerful EDB Act which has not been amended for the last 35 years. It empowers the EDB to promote development activities and fund raising through the Export Development Fund for strengthening export trade, a facility which has not been provided in certain other Acts.
In view of the above context, it is the duty of EDB to put in its utmost effort to utilise the powers entrusted by the Act with the noble intention of helping build the nation.
The entire nation with a proud history of export trade will appreciate the excellent service rendered by the EDB throughout. Apparently, the EDB still carries out activities and applies tools introduced in the earlier stage of its inception. Therefore, the time is ripe for the EDB to introduce new renaissance within the institution to strengthen a meaningful development. It is advisable if priority is given to KPO/BPO, application of new techniques branding strategy, reactivate the council of ministers, frequent meeting of National Exporters Advisory Committees, etc. Reopening trade centres and display centres overseas, successfully running at a time, and appointing official agents will help revitalise the situation.
Emerging opportunities
As a matter of fact, the situation is Sri Lanka still faces challenges as our major exports still depend on the Western market. Due to the non-offer of GSP+ Sri Lanka loses a significant amount of exports. According to the authorities, $ 784 million was lost during the last few years. Sri Lanka is striving for a larger Asian market in an attempt to overcome the situation.
Opportunities seem to be emerging with the development of new relationships. The Proposed Free Trade Agreement with China and Bangladesh BIMSTEC Free Trade Agreements have opened avenues to initiate new export orders. It is the responsibility of the EDB to play the major role under the new scenario of FTAs as expected by the export community.
The role played by the EDB on development of SMEs, product sectors like leather, ornamental fish, handloom and packaging is commendable. Uplifting SMEs is virtually a very difficult task. It was an intelligent step taken to establish regional offices island in the early 1990s given the necessary institutional support.
The EDB still maintains its high reputation achieved with a professional staff of skill and experience to brave any challenge in the field. Regrettably, unqualified appointments to high level positions by political influence have considerably damaged the competence of the institution. Therefore, it is important that personalities with integrity and knowledgeable experience should be considered for appointments in the interest of the nation.
Meaningful move
The Government under the leadership of President Mahinda Rajapaksa has continuously given high priority to improve export development. The President as the Finance Minister in his budget speech every year makes various proposals and grants incentives to help develop the export trade. The most commendable step taken by the President is the detailed discussion held with the business community in his effort to find solutions to their issues with any suggestions before presentation of the budget.
This meaningful move adopted by the Government has encouraged not only the export community but also institutions like the EDB to further strengthen their dedication for export development. In view of the President’s intent with assistance to help promote export development, the responsibility lies upon the EDB to avail itself of the optimum in the interest of the nation.
Cause for pride
Today EDB can stand tall given its invaluable contribution made not only to socioeconomic development but also its dedicated effort to develop Sri Lanka’s image. It didn’t happen by itself. It is the excellent performance by the skilled and experienced staff even during difficult periods braving every global challenge with a strategic approach that helped build the national economy.
On the other hand, the nation salutes international personalities like Victor Santiapillai, Asoka de De Lanerolle and K. Gunaratnam, the then leadership of the EDB, who astutely strengthened development of exports with methodological strategy. They always focused attention on the needs of the export community with positive views of the knowledgeable bureaucrats taken into consideration. Still the bulk of activities operated were introduced during the regimes of these three Chairmen of EDB.
Time is ripe for the EDB to recollect its past achievements and continue delivery of its professional competence for the sake of the nation keeping its long-standing theme ‘Sri Lankan Pride across the World – EDB’.
(The writer is the retired former Head of Corporate Affairs and Communications – Sri Lanka Export Development Board and Ex-Director of Sri Lanka Trade Centre in Maldives. He can be reached at [email protected].)
