Government and exporters have been urged to develop export markets in the Asian region, as developed western countries are becoming more protectionist with the deepening of the global recession.
“The report takes note of the protectionist stance adopted by many developed countries and urges intra-regional trade among Asian countries,” said the Deputy Director of the Institute of Policy Studies, Dr Dushni Weerakoon, speaking at the launch of the UN report, ‘The Economic and Social Survey 2009 of Asia and the Pacific,’ this week.
In addition to protectionism, the recession itself, will cut demand from western countries, because western consumers will have less money to spend. “So unlike the previous Asian financial crisis, Asian countries cannot depend on ‘industrialised countries’ to ‘export’ their way out of the current global recession,” said Dr Weerakoon.
Economists are urging export promotion targeting more non-traditional markets, while retaining traditional western markets, as much as possible. This is also expected to help the government budget.
“Government expenditure will increase very much over the next few years because of the need for fiscal stimulus and the need to rehabilitate the North and East. So government revenues also need to increase accordingly. But this is where we have a problem.
The agriculture sector receives a lot of government transfers but the agriculture sector does not pay taxes. The sectors that pay taxes are exports and industries. But these are the sectors most affected by the global recession,” said a senior economics lecturer from the University of Colombo, Dr Sirimal Abeyratne. “So we must look at other alternatives, like export promotion not just to western countries but high-performing Asian countries. This will help to increase revenues,” said Dr Abeyratne. |
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