NCE solicits Govt. support to retain employees of export enterprises

The National Chamber of Exporters of Sri Lanka (NCE), which exclusively serves and represents exporters, is soliciting the support of the Government for exporters during this turbulent time to navigate through the pandemic and recuperate their businesses for the benefit of the people and the economy. 

It is obvious that businesses are struggling to maintain normalcy but to no avail. Moreover, exporters are experiencing dual supply chain shocks, where some cannot receive raw materials and some cannot secure orders from clients due to the lockdown in other countries. 

This has resulted in halts in production, whilst many businesses are reaching a critical junction. Further, many of the exporters are facing issues with cancelled pre-orders on already-manufactured batches of products in terms of the economic slowdown around the world.

USA and EU countries, being Sri Lanka’s key export destinations for apparel, may recover from the pandemic in the next three to four months, yet there will still be repercussions for those regions to handle. Hence, formulating new strategies for sustenance of Sri Lankan export enterprises has now become the need of the hour. 

The resilience of our Exporters has been proven beyond doubt when they sailed through a 30-year-long war, a Tsunami, and more recently, through the Easter Sunday attacks, which are of course issues relevant to our country.

However, in this set-up, being a global concern, both buyer and seller countries are affected, creating a ripple effect on the global demand and supply chains. Yet with steady support and guidance, exporters could overcome the challenges once again, proving their steadfastness, strength and valor. 

Recently, the Central Bank announced a Rs. 50 billion refinancing facility for banks, enabling them to expand their lending capacity to businesses and offer working capital at 4% interest. Whilst appreciating the initiative of the Government, the Secretary General of the chamber stated the proportions of assistance that will reach the export sector of the country and the specifics are unperceived. 

In this regard, member exporters of the chamber are keen to receive more information of the type of collateral that will be required by commercial banks in advancing the facilities. It is also questionable whether the SMEs will be able to provide such collateral if demanded by banks. However, partner commercial banks of the chamber assure that they will not burden the borrowers, yet will provide facilities based on their credentials. 

Visibly, every enterprise will not be able to enjoy such facilities, and the Secretary General further elaborated that Sri Lankan exporters generally adopt good financial practices and uphold ethical business standards. It is, therefore, a fair gesture that banks should support open and honest applicants in extending them required financial assistance. 

With regard to the issue of possible pay cuts and the laying off of employees by organisations, exporters who have reserves will possibly sustain the expenses for two to three months. However, most of the member exporters of the chamber will not be able to withstand the financial pressure due to cancelled pre-orders by their regular buyers after goods have been manufactured and made ready for shipment, hence creating a negative cash flow condition. 

It was further highlighted that the Government should announce a robust supportive mechanism for exporters for a period of three months minimum to prevent laying off their employees. They could possibly be required even at a minimum wage under the Wages Board Ordinance related to different sectors. A fact to be reminded of is that exporters make foreign exchange for the country and pay all obligatory taxes to the Government, hence they ought to be sufficiently supported. 

Exporters, being resilient, will mend their way through this ordeal, although this is the first instance in which they’re facing a global crisis of this nature. Yet if the private sector is compelled to lay off workers, it will create another major issue for the Government. It is also prudent to make amendments to the existing labour laws to grip a situation should it be called for. 

NCE, being one of the key service providers to exporters, in collaboration with CMA Sri Lanka, supported by professional bodies, commercial banks, chambers of export, industry and commerce, has set up the SME Help Desk and formed the COVID-19 Business Advisory Services with the objective of assisting the member SME exporters to meet challenges presented by the COVID-19 Pandemic. The Business Advisory Services include experts in the fields of accounting, costing, finance, banking, marketing, human resources/labour, manufacturing, management, IT, together with Sector Experts. 

Member exporters, especially in the SME category, will be able to use this advisory service, as well as get the assistance to overcome challenges put forth by the COVID-19 pandemic expressly related to the above-mentioned disciplines of business organisations

Further expanding its services, the chamber also has linked with Ernst & Young, their strategic business partner, in setting up a designated online help desk, the Ernst & Young Online Help Desk, to assist the members in receiving Government moratorium offered to SMEs via email ([email protected]). Members are requested to avail this service to obtain further information on the debt moratorium introduced by the Government through the banking system of the country. 

NCE highlights and proposes a ‘one-stop shop’ to handle export-related issues, since the time has come for it to be most beneficial in enabling exporters to present their matters to authorities through a single common window.