President, National Chamber of Exporters (NCE), Ramal Jasinghe said that the business environment is conducive for the country’s entrepreneurs and the infrastructure system is supportive for business development. However, he noted that there are some common and specific issues with regard to the regulatory environment and the NCE continues to assist the entrepreneurs in solving these issues in going forward.
“We provide support to address the ‘red tape’ in the sector where the exporters’ concerns are given a hearing,” he said in an interview with the Business Observer.
Excerpts:
Q: What are the key priorities that your Chamber is concerned about at present?
A. First and foremost, the Chamber should at all times be of relevance to all its stakeholders, including its members, the wider exporter community, the entrepreneur and business community at large, government departments, as well as the state policymakers and decision makers. To do this, the Chamber Secretariat and staff are committed to continuously update themselves on current developments and future trends in both domestic and international trade and commerce matters as well as with relevant areas and issues which impact the export value chain and export structure.
In the light of the priorities, the Chamber is addressing pressing common issues that impact the entire cross section of the 54 Export Sectors, which the Chamber represents. The current priorities are:
The shortage of skilled labour to run the export drive and the difficulties faced by our members to enlist skilled personnel to work in their factories and manage the high labour turnover faced by almost all of our members and the exporter community at large.
The sustainability of our export markets challenged by non - tariff barriers faced in certain territories within the global market place, being competitive in terms of price, consistency of quality , and consistency of supply of the products and services we provide to the various export markets in which we have or attempt to build a presence in.
The rising costs of production due to imported inputs which at times can constitute about 95% , in terms of value added exports , where the depreciating rupee against the US Dollar has a serious impact in maintaining the price competitiveness of our export items.
The role of Research and Development and the engagement of our Research and Scientific Institutions to nurture and develop ‘Import Substitution’ as inputs to our export items is another priority. If the full benefit of a depreciating Rupee is to be enjoyed by the exporter , ‘Import Substitution’ as an input and component needs to be continuously developed.
Engaging with the Scientific Community, to provide testing facilities where some of our export items require speedy, efficient and accurate results to meet the demands in a competitive commodities and perishables export market in a timely manner.
Urge the Science and Technology community including the State and Private Research Institutions to play a larger role in working closely with the export drive, particularly in making decisions with regards to agricultural and industrial practices , ensuring that proper protocols are followed in policy planning and decision making which could have an impact on our exports in foreign markets.
The ‘Ease of doing Business’ and streamlining of Ministries, Authorities and their functions to facilitate the export drive in relation to the speed of obtaining approvals and coordination of functions to gain efficiency in carrying out the activity of exports. This is important in the light of a shrinking global marketplace and increasing pressure on price and timely delivery to overseas markets.
Addressing the concerns that would arise as a result of the country signing Free Trade Agreements (FTA’s) with larger countries that have an advantage of scale as well as ‘Concept/Product to Market’ efficiencies and possess greater price diversion capabilities and hence competitiveness, are among the many concerns our exporters and industrialists have in terms of receiving fair terms for our products and services in capturing a foot hold and gaining access to the markets of the countries with which we sign such agreements.
Ensure the early implementation of the Anti-Dumping Act, and countervailing Duties Act, and Safeguard Measures Act which have been passed by the Parliament.
Creating an environment for the ‘Export Entrepreneur’ which would build the backbone of developing more SME-based exporters, who if nurtured well, could lead the export drive that is vital for the strengthening of our domestic economy.
Training and Development of our members’ knowledge and skills in international marketing practices through our Education and Training arm, the National Institute of Exporters ( NIOE) , which at present collaborates with the International Trade Center (ITC) conducting various courses including online programs to upgrade the professionalism of our exporters. ‘’
Carrying out extension activities and coordinating with the outstation Trade Chambers and Trade Organizations of the country, by taking delegates from Colombo to the provinces to introduce and forge Buyer/ Producer ties with a view to involve and engage the provinces to join the export drive and value chain.
Extending this activity (item 12) with foreign trade chambers and business organisations by arranging our exporters to join trade delegation visits overseas highlighting our products and services, including the setting up of B2B meetings with delegates of overseas markets.
Q: How have you gained commitment from your team to achieve these goals?
A. The results achieved by the Chamber in being relevant to our stakeholders speak for itself. We have a young and dynamic team serving at our Secretariat with an average age of 32 ! Almost all of our team members possess a tertiary level of education, which makes a difference in motivating and driving a results oriented team. Furthermore, in keeping with the present day gender balance trends, we in fact have a ‘gender imbalance’ with the female gender far outnumbering the males in our team. We find that this factor helps the dynamism of the Chamber and its activities as the youth factor of our staff members foster a ‘can do’ attitude and have a thirst for learning and seeking challenge. We view this as a distinct advantage. The activities of the Chamber and guidance to our team of professionals is driven by our young and dynamic Secretary General/ CEO Shiham Marikar.
Q: Is the regulatory environment in the country supporting the opportunities for entrepreneurs today?
A. We feel that the basic infrastructure is supportive of the entrepreneur in general. However, each entrepreneur could have issues, some specific and others common with various areas of the regulatory environment. We feel that refinements would be needed as and when issues are faced with, and if a member of the National Chamber of Exporters (NCE) faces a situation with regard to ‘red tape’, the Chamber comes forward to the aid of the member to address such issues which may arise. We find that to a great extent a hearing is given to the airing of these various issues.
Q: Is it hard to be optimistic about growth in industries when you look at where the world is today?
A. The pace of growth in emerging economies such as Vietnam, Cambodia and Bangladesh to name a few indeed pose challenges to our industries and services competing for space in international markets. The Chamber’s priorities are also built upon addressing the challenges posed by the relative new comers to the global market scene. The infrastructure within which our industries work and compete in, is tough and very challenging. Every support in terms of infrastructure to facilitate the ease of doing business is vital, particularly in terms of costs of production, affordable power generation in particular, availability of land and skilled labour, achieving efficiencies in delivery by fast tracking export procedures, and most importantly, consistency of governing policies through early implementation.
I emphasize that it is hard to be optimistic or complacent, particularly in light of the fast pace of growth of emerging economies vying for market space in international trade, which could potentially dislodge the position we enjoy for our exports in certain markets.
Q: How much can business and the private sector do to really drive change?
A. ‘The Private Sector is the engine of growth’! This adage came to life over 3 decades ago and has been the driving force behind the development and growth of our private sector, incubating the emergence of new companies and conglomerates in the country over the last 25 to 30 years and still counting. The changing skyline in Colombo and the suburbs , as well as in some major cities underscores the role of the private sector in the economic development in the country.
In my view, it is not just how much or the quantity of the private sector contribution, but how well or the quality of the contribution towards sustainable development and change that supports the economy to achieve goals to drive change. However, it must be stressed that private sector development efforts needs to be supported by a proactive state policy-making and regulatory machinery, which must be like the two levers of a scissor- one lever cannot function without the other if it is to be useful!
Q: How do you propose to increase PPPs in industries? Can you name a few projects suitable for PPPs?
A. I can only speak for the export sector. The Export Development Board ( EDB) has been very proactive in fostering PPP projects in its various initiatives towards the export drive and development. I feel that the extension of this partnership particularly in the fields of marketing and propaganda in terms of the development of exports, tourism and any foreign exchange generating initiative should be a PPP project. There could be other areas such as Scientific Research and Development efforts , Industrial and Entrepreneurship initiatives for Exports which should be PPP , in order to achieve ‘ concept to market’, costs and delivery efficiencies.
Q: How can we increase export earnings? Do we still have niche areas?
A. The economy as it stands is on the brink of an ‘Export or Perish’ situation! Hence, it is vital that we firstly protect the markets where we enjoy a presence and use the full force of the advantages that we possess, to consolidate our presence particularly in the traditional export markets such as tea, cinnamon and spices highlighting its superior quality and also strengthen our position with regard to garments and apparel which has gained a foothold in international retail markets and high end fashion houses.
The growth figures of these sectors in 2017 was very encouraging and we need to keep up this momentum to protect our market position and international appeal for our products. Niche markets are often threatened by cheaper substitutes or imitations where, if we are not proactive, could seriously threaten the unique position we enjoy in the few niches particularly in the case of commodities. We need to build market niches through continuous market intelligence, and research particularly with the emerging industries of which six, including ICT has been identified by the National Export Strategy (NES) initiative under the auspices of the Ministry of Development Strategy, Innovation and Technology. And finally, develop an environment for Export Entrepreneurship to spawn within an SME environment , to nurture inclusivity as done decades ago with the local batik industry. Some of these cottage enterprises launched way back then, have grown into large export companies and conglomerates today, providing garments to international Fashion Houses.
Q: Were the industries ready to fully utilise the EU’s GSP plus benefits?
A. The growth in the export figures recorded in 2017 and in the 1st Quarter of this year is actually attributed to the reintroduction of the GSP facility. Initially, it was the fisheries sector which recorded growth when this facility was reintroduced and latterly with regard to garments and the other 7000 products which attract this facility. It is the slow entry of new exporters to the EU market which I feel is the main factor that impedes taking the fullest advantage of this facility. The reasons for this could be varied and dependent on a specific industry or export sector; Apparels have been attracting the greater attention and hence much comment has been made with regard to this industry’s performance in the EU market. This is certainly an opportunity which urgently needs to be exploited by our export community.
Q: What are the immediate steps that the government should take to tackle the GDP growth?
A. Our economy is dependent on agriculture,services and manufacturing as the main drivers of the GDP growth. It is challenging to see rapid growth from a level of 4 % for any developing economy. We trust that the present challenging situation is, hopefully, a stage of much needed correction of the economy and the planned fiscal consolidation of the Central Bank which is aimed at bringing about future stability , which forms the backbone of our export performance and other economic activity including the strengthening of the domestic economy of the country.
The Export Performance stands at almost half of the Import Bill of the country. Taking a cue from the recently released Central Bank Annual Report , the GDP can be grown predominantly by the increased performance in exports. To achieve this, a strong, supportive and consistent policy platform should be in force, which gives direction to the private sector to plan and perform accordingly. As mentioned earlier, entrepreneurship should be fostered along with support to our local industries and manufacturers to carry out business in a profitable manner. This entails many economic factors which needs to be addressed simultaneously in partnership with the state and private sector.
Q: How could the industries support government’s plans ?
A. If the export sector is to enjoy the full benefit of the depreciating Rupee, “Import Substitution’ is the key, particularly, in context of the various inputs of our value added export products! Active Research and Development efforts need to be carried out continuously by the various industries with the Scientific Research Institutions supported by state patronage to meet with their financial goals. However, this cannot happen overnight. Much work needs to be done in this area.
For industries to help with the government’s plans, there should be a constant dialogue and engagement in aligning the business goals of the industrialist along with consistent government policy.
There could never be a perfect meeting of minds, but it would certainly help to allay any doubts and perceptions leading to the facilitation of reaching a common goal towards achieving industrial and economic development and excellence in a rapidly changing business environment.