Rs. 1,000 bn export losses in 2009

Former Chairman of the Export Development Board Rohantha Athukorala says Sri Lanka’s exports have lost 1,000 billion rupees in 2009 due to the global economic crisis.

Referring to Central Bank data, Athukorala, a marketer by profession, said export earnings declined by 12.9 percent in 2009 which amounts to a loss of US$ 7,084.5 million, almost thousand billion in rupee terms.

Athukorala made these observations in an article published last Monday in The Island Financial Review.

Athukorala said that unless focused policy changes are made on export strategies, Sri Lanka would not be able to capture the opportunities that the global economy would bring, since most economies are now beginning to turn around.

Exporters continue to struggle to stay alive in an unforgiving global market, with margins constantly under pressure due to external factors (such as the global economic crisis, anti-competitive practices of shipping lines and non-tariff barriers of some countries) and domestic factors (exchange rate policy, high energy costs and inflexible labour laws).

Exporters say the Export Development Reward Scheme was ineffectual as the government failed to deliver timely payments under the scheme, while some exporters claim it should have been targeted at exporters who were actually making declining gains.

Export Development and International Trade Minister Prof. G. L. Peiris told a forum last month that the government realises the importance of building the country’s export sector, particularly those of the rural SME sector.

Addressing the AGM of the National Chamber of Commerce of Sri Lanka, Prof Peiris said the government was strongly focusing on developing the rural export economy and urged businesses to work together with the government to ‘address the daunting challenges of economic development’.

He said the government was also constantly searching for new export markets.

Sri Lanka’s export earnings declined to US$ 7,084.5 million in 2009 according to latest data released by the Treasury from US$ 8,110.6 in 2008. Import expenditure declined even sharply from US$ 14,008 million in 2008 to US$ 9,883.2 last year.

"As a result the trade deficit has narrowed considerably during the year, from a deficit of US$ 5,897 million in 2008 to US$ 2,798.7 million. Although this has given us some relief we should not forget that the trade deficit contraction was largely due to contraction in imports, so we have a long way to go," an economists said.

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