Sri Lankan exports are expected to drop this year with demand from traditional western markets shrinking due to the global recession. “Our exports have reduced in December 2008, and we expect some negative growth this year as well,” said an Assistant Governor of the Central Bank, Dr H N Thenuwara, answering questions after a public lecture on the global economic crisis, organised by the Centre for Banking Studies.
However, Central Bankers say rupee devaluation is no guarantee for export success in a global recession. “The Central Bank is not reluctant to depreciate the rupee. But the source of growth of exports is not price adjustment. This may be one option, but it may not be very effective,” one senior official told The Sunday Times FT.
Productivity improvements, human resources development and innovation, are seen as a better way to survive the recession and fuel economic growth.
Meanwhile, others noted that local export companies also need to invest in individual business strategies, to survive the current global situation.
“The biggest problem affecting our export businesses is not the exchange rate or the interest rate. The problem is that many don’t have a business strategy. Some businesses don’t even know their end-users. The reality is, most of our companies rode the wave during the good times and they grew with no effort of their own. But this is not possible anymore,” said a Business Consultant, Dr Asoka Jinadasa.
The recession is also expected to drag on for longer than originally thought. Analysts originally expected a quick recovery. But now, the feeling is that recovery may take longer.
“The IMF earlier expected the current depression to take a ‘V’ shape. From what we hear unofficially now, the depression may not be V shaped. It may be a flattened out, prolonged depression,” said Dr Thenuwara. |
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