The Sri Lankan government’s promises made on improved market access to three billion people are not yet realised except for GSP Plus, says Rohan Samarajiva, founding Chair of LIRNEasia.
According to Samarajiva, Sri Lanka’s goods exports haven’t diversified enough and market access is still spoken ofin the future tense.
Sri Lanka’s exports have gone down in relation to its competitor. During the period 2000-2014, the country’s goods exports increased by 2.1% while Vietnam goods exports by 9.5%.
Sri Lanka has only received FDIs in non-tradable sectors such as real estate and telecom during this period, while Vietnam managed to attract export-oriented FDIs.
The composition of goods exports has too remained stale with over reliance on garments.
“Asia is where the growth is going to be. In Asia, the largest unexploited market would be around Bay of Bengal. However, our ability to explore emerging opportunities has been stalled by lagging FDIs and labour shortage. Even if we get this market access, the country is not in a position to respond because local industries do not have the capability to expand due to lack of FDIs and labour shortage.
In this situation, we can’t think in the same old way or walk with the 70s and 80s focus on innovation.”
According to him, Sri Lanka needs to re-examine and modify under-utilized tax incentives that were put in place a few years ago to promote R&D while encouraging domestic high net worth individuals and firms to enter into angel and venture financing. Samrajiwa further noted that Sri Lanka could easily emerge as a regional leader in innovation and become a home to Sri Lankan and global firms in diverse industries who research, design, innovate and test world-class products and services in a highly competitive business environment.
Sources : dailynews