Sri Lankan exporters blame stagnant exports on politics
In the absence of any political will, Sri Lanka’s exporters on Tuesday stated that they wanted future governments to commit to consistent policies without the imposition of ad hoc taxes on sectors that generate revenue to the country in order to remain competitive in the global marketplace as local exports see a decline in demand.
Exporters have even detailed these concerns to Presidential candidates who they hope will continue the policies without bringing about significant changes as it disrupts the future plans of the business sector.
“We feel our exports especially the merchandise exports are stagnant or declining,” National Chamber of Exporters (NCE) Chairman Jayantha Karunaratne said at a media briefing held at the Galadari Hotel in Colombo on Tuesday.
Inconsistent policies cause disruptions to future plans of corporates as the political environment in Sri Lanka is susceptible to sudden changes not just from government to government but also between Ministers of the same government as well, he said.
Sri Lanka is short on investments, it was pointed out adding that a number of bottlenecks in the Ease of Doing Business and lack of transparency were key factors to drop in investments. “In Sri Lanka you need to know somebody to do business here,” he said.
Exporters also called for the revival of the railway transportation for cargo and which had faced certain road blocks; the need for commercial banks to remain flexible; assistance for SMEs that are still downsising, he explained.
Apparel sector called for a removal of the conversion requirement that helped sustain the economy during its crisis period but is now not necessary.
Joint Apparel Association Forum (JAAF) Secretary General Yohan Lawrence also pointed out that the large savings in the foreign exchange is not a good factor and these rapid rate increases also serves no purpose since this is not impacting on the industries either.
In addition, the energy prices are at a significantly high rates and in this respect, the apparel sector had requested authorities to ensure a reduction in renewable energy.
However, the cost of renewable energy rates is higher than the rates quoted elsewhere globally, it was noted.
Tea Exporters Association (TEA) Chairman Ganesh Deivanayagam highlighted that while the government has done a tremendous job in reviving the economy, they too had complied when authorities requested them to tighten their belts.
He noted that the authorities were slow in the payment of tax refunds and according to a sample survey of 19 tea exporters the VAT refunds due to them since 2010 was at Rs.497 billion.
Sri Lanka Shippers’ Council Chairman Sean Van Dort insisted that authorities need to ensure the implementation of digitalisation at the Customs Department.
He noted that during COVID this was carried out but now they have reverted to the previous manual system. “Border protection agencies have created bottlenecks and a fear psychosis” that result in increased costs to them which is then eventually passed down to the consumers. “Right now we have to cow and bow to these officers,” he said. Further, Mr. Van Dort noted that the Sri Lanka Air Force continues to carry out checks at the entrance to the airport that result in damage to cargo which when they reach their destination are then subject to reduction in payments.
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