More electronic goods manufacture needed to propel growth
While global value chains account for 50 per cent of total global trade, Sri Lanka’s biggest manufacture – the apparel sector is not linked to it. However the manufacture of electronic goods and automobiles is linked to global value chains like in the East Asian countries but Sri Lanka is not part of it and thus the country needs more products in this sector. Local exports are stuck in a low cost, low skilled labour intensive quagmire, said Subhashini Abeysinghe, Director Verite Research at the launch of the Economic Sector Review and Outlook 2020 Report held at the Ceylon Chamber of Commerce auditorium in Colombo on Monday.
She said although the government has set targets for exports as in the past, historically the country has failed to reach those targets and down play them. In 2011 Sri Lanka passed the 10 billion-dollar threshold in exports and in that year the authorities set a target in 2020 to achieve US$20 billion in 2020, only for goods. But the last government revised this target and combined goods and services in a target to achieve $20 billion. This is problematic because collection of data on services of exports is extremely weak and Sri Lanka has not developed a robust mechanism to collect data on export services. In the absence of such data it is easier for governments to massage those numbers as well.
Central Bank Governor Prof. W.D. Lakshman, delivering the key note address, said that a greater degree of unity and co-ordination among different trade and business chambers is desirable to achieve country’s progress. As a country immersed in the ongoing process of globalisation Sri Lanka’s economic outlook in short, medium and long term is closely linked to global development in addition to what happens locally.
The global growth prospects have been further threatened by the onslaught of coronavirus in China and elsewhere. According to estimates Sri Lanka’s domestic economy has remained subdued but in 2020 a revival in economic activity is anticipated supported by appropriate fiscal and monetary measures. A slow improvement is seen in the country’s external account. The recovery after the Easter Sunday attacks in the tourism sector will continue with the impact of the coronavirus. Workers remittances too will remain stable in 2020 and foreign investment is expected to grow with business confidence. The Port City project too will boost development of the country as it is uniquely situated in the Indian Ocean.
Chief Economist of the Ceylon Chamber of Commerce, Shiran Fernando; Dumith Fernando, Chairman Asia Securities and Mahanda Wickremasinghe, CEO and Country Head Fitch Ratings Lanka along with Manjula de Siva, Secretary General/CEO of the Ceylon Chamber of Commerce also spoke. A copy of the Economy Sector Review Outlook 2020 was handed over to Prof. Lakshman by Mr. De Silva.