Not the right way…
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If you go to the Department of Imports and Exports Control at Hemas Building in Fort these days, you would most probably find scores of representatives of private sector companies trying to fill forms or talk to a harried official on importing toilet paper or computer parts!The stress is actually not on the department officials but the private sector representatives who have to go from pillar to post, trying to convince an official to give them a special licence to import any of the recently-banned 300-odd imported items and its importance for the sustainability of the business.
Whenever the government enforces bans on a segment of imported goods, it causes a lot of misery to companies that deal in them, leading to closures and job losses. And in the current negative economic environment, this is not the right kind of policy. On the other hand, the country is losing its professionals, with scores of medical professionals going abroad while unskilled workers (many from companies struggling to survive) are seeking jobs in West Asia. State workers being offered five years of no-pay leave so that they could work abroad, also means a drain on the country’s resource of skilled and unskilled workers.
Economists believe it would take at least five years for Sri Lanka to recover from the current crisis and return to the economic levels prevalent in 2018, which means companies will struggle during this period and less revenue would result in state coffers being bare.
As one industrialist put it, there doesn’t seem to be any scientific basis for the current list of 300 banned items as it even affects some export industries. This was the focus of my conversation with Arty, the intrepid entrepreneur who was certainly not being adventurous on this Thursday morning; more worried about his own future.
“This country is built on small enterprises. Why are they banning all these items when jobs will be lost and SMEs crash?” he asked.
“It looks like the officials have looked at a list of items and randomly picked them to be banned with no science in the selection,” I said.
Policy think tank Advocata said that the ban tightens already existing restrictions on imported goods while completely banning the importation of goods ranging from chocolates and household appliances to raw materials such as aluminium bars and rods. “This policy change comes into effect in a market that is already facing acute shortages of essential goods. Imposing such a suspension of imports will have a significant negative impact on an economy which is already facing a severe crisis,” it said in an analysis.
Among the complainants is the soft tissue paper industry engaged in the manufacture of essential hygienic soft tissue products such as toilet rolls, paper serviettes, hand paper napkins, facial tissues, paper hand towels, industrial towels and rolls and various other related products.
The IT sector was also worried with the Federation of Information Technology Industry Sri Lanka (FITIS) saying there is a serious danger of technological platforms in the country breaking down due to the government’s import ban on IT devices and peripherals. FITIS pointed out that the inclusion of IT devices and peripherals in the list of proscribed articles could have been due to a genuine oversight!
The IT sector is one of the most productive sectors in the country and a valuable forex source targeting US$5 billion in export services by 2025.
During my conversation with Arty it was revealed that the officials who don’t have a clue about business and industry and its impact on the economy are the ones who have to decide on special licences to import these products. The ban itself is listed as “temporary restrictions” but it’s an indefinite ban with no date as to when it ends.
Officials appear to have gone through last year’s list and imposed the ban on items that were high in imports then. Some of these items are essential and needed for operations and would result in these industries coming to a standstill and job losses.
Officials at the Imports Control office are not experienced enough to understand the importance of these imported items and are likely to turn down most requests for special licences. Under current rules, banned items can be obtained under a special licence scheme but this is subject to the official understanding the need for this particular item to be imported, and in such a situation that expertise is missing. For this reason, the government needs to consult experts!
Now, what happens to items on the banned list which have already been shipped from a foreign port? In this case, one month’s grace has been given for such shipments. However, when items are shipped from ports as far as the United States or Brazil, it takes more than 45 days to reach Colombo. When the one month grace period is over, all kinds of penalties are slapped on importers.
“It’s frustrating doing business these days,” Arty said, adding that the rigmarole of getting special licences or convincing officials to release shipments without penalties would affect Sri Lanka’s ranking in the ‘Ease of Doing’ business index.
Among the extensive list of banned items are chocolates, aerated water, marble products, perfumes, construction products like tiles, pipes and hoses, fittings, paving blocks and bricks, tiles and some forms of apparel and clothing accessories, t-shirts, various forms of footwear, tableware, kitchenware, some forms of printing machinery, batteries and telephone sets,
While on the ‘last leg’ of my column, I was momentarily distracted by the conversation of the trio under the margosa tree. Apparently, Mabel Rasthiyadu had gone to her village for a few days and returned with a ‘bagful’ of ‘news’.
“Godak minissu den ath-weda karanawa goda-nagili adavi wala. Anith aya pita rata yanna hadanawa (Many people are doing odd jobs on building sites and other are trying to go abroad),” she said.
“Ow, eka hari. Samahara company wala lipikaru kattiya saha nopuhunu kattiyath rassawal hoyanawalu meda peradiga (Yes, I was told that in some companies, clerical and unskilled staff are seeking jobs in West Asia),” added Kussi Amma Sera.
“Eth godak rassawal thiyenawada meda peradiga (But are there many jobs available in West Asia)?” asked Serapina, with Mabel Rasthiyadu replying: “Eh ratawala inna samahara lankikayo ape ayata rassawal hoyanna udaw wenawalu (There are some Sri Lankans abroad who are helping our people to get jobs).”
As I reflected on these thoughts, my mind wandered to the future as to whether Sri Lanka would have a serious brain drain and a shortage of workers when the economy recovers from the present crisis.
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