BUILDING AN EXPORT ECONOMY IN SRI LANKA
Posted on November 9th, 2021

BY EDWARD THEOPHILUS

Building a strong export economy is a positive strategy and a gigantic challenge to revive the prosperous status of the economy. First, policymakers need to understand that an export economy comprises a broader spectrum that focuses on the export of goods and services and the effort needs to stress on many areas that are ignored in the current structure. If anyone read The Airport Economist, by Tim Harcourt. (2008)” it would be helpful to understand what areas should be concentrated for building an export economy. Market investigation and identifying areas that Sri Lanka could achieve is the key to building a strong export economy. While it is considered an export economy, one needs to understand the limits to development and growth. But the environment in Sri Lanka is showing no actions, only taking (NATO). Although policymakers want to build a strong export economy, if the country is not ready to do it, it wouldn’t be successful.

It is a general assurance that Sri Lanka had a prosperous economy during the reign of kings and queens. It is quite difficult to estimate the rate of contribution from the export sector in the past. It can assume that agricultural products were exported, and some have the opinion that shipbuilding and export were in history. There is no concrete evidence for this assent. It is observed that people in Sri Lanka excessively talk about the prosperity had in history than contributing to the economy at present. Despite the rhetoric, policymakers of the country don’t consider many ways that could apply to revive the economy.

As president, Mr. Rajapaksa stated recently the Covid pandemic has heavily affected Sri Lanka and the policymaking, policy implementation, policy monitoring, and remedial management have been weakened and the risk of a pandemic is subject to talking points in all areas of the economy whilst focusing on making a strong export economy has not been practical and the opposition politicians have motivated to create instability in the country disregarding the reality.

While working on building an export economy, it shouldn’t ignore that an export economy is subject to external shocks, and the economic diversification to positively face shocks would be a far-reaching aspect for constraint. Countries like Sri Lanka with very few natural resources that support making an export economy would be a giant task. Many talks about Singapore’s achievements and they ignore that international politics contributed to the success of Singapore’s strategies and Sri Lanka has no such an environment to build a strong international service environment. Although the Hambantota port development project focused on building a unique style of an international service centre, it has not been developed as fast as expected by the government. It might take time and the international competition and politics may concern with the government expectations.                                                                                                  

Sri Lanka has a politics of blaming and demanding from the government rather than contributing to production in the country. Economic advisors of ILO in the late 1960s advised that the significance of the expansion of non-traditional exports with traditional exports, tea, rubber, and coconut, and currently people in the world, are concerned about organic agricultural productions and electronic services. There are many export items based on agriculture and they would support foreign exchange-earning and increase foreign reserves of the country. Policymakers concentrated on tourism and foreign employment and limited areas when there are many opportunities for non-traditional exports. Foreign employment has a positive effect and many negative results, especially administrative, social and other problems created by employing local people in overseas countries. The experience in Sri Lanka shows that very few areas. have been brought into being and the over-emphasis in very limited areas needs broadly considering in the trust of developing a strong export economy.

Foreign employment has severe competition from other countries and the critical negative aspect of foreign employment is transferring exchange earned from foreign employment to purchase houses overseas and the deaths of COVID-19 have created competition from developed countries to attract overseas employees. The government of Sri Lanka has no either option or policy to change this situation.

The net result of building an export economy shows that earnings from exports have been misused for importing vehicles and other unnecessary items. For example, the government has permitted to use of earnings from non-traditional exports to use for people who make money from illegal businesses such as illicit liquor and drug dealing, and many others. Corruption in the country absorbs lots of export earnings and many politicians protect such business based on undisclosed advantages. Therefore, building an export economy has become a compact task, and the policy scrutiny is unsuccessful.

Without building an export economy, Sri Lanka will have constraints to stabilize the foreign and domestic values of the monetary unit and foreign reserves. The current economic environment is a strong challenge for policymakers. Politics in Sri Lanka is a short-term matter because over 80% population expects economic benefits from the government while building an export economy is a long-term process. 

The export of organic agricultural produce could be contributed to Sri Lanka’s economy like tea and coconut. Few policymakers understand this strategy and organic agricultural produce and use of them for industrial products such as making various juices would have worldwide demand. Many fruits, such as pineapple, mango, orange, and other tropical fruits, could produce using organic manure and Ayurvedic medicines for insect controls. Such fruit juices will have a demand for more than coke. They can export to developed countries and consumers enjoy organic fruit and fruit juices.

Organic agricultural produce and related industrial could attract higher prices and attract high demand and prices in developed countries. This strategy helps gain the 50% contribution to GDP and more foreign exchange to the country. Organic farming attracts tourists and needs developing model farms for demonstration and attracting overseas buyers. 

Within ten years, a very strong export economy and the market could be disentangled and the result would be a higher foreign value for the monetary unit and less inflation. A lower rate of interest in the economy could be maintained for borrowing organic producers and entrepreneurs.

The indirect advantages of the new export market based on organic products and services would be the possibility of reducing import costs by medicines, chemicals for agriculture, and many others. The most arduous task would convince Sri Lanka has organic agricultural products                                                                                                                   

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