MTI Consulting CEO Hilmy Cader - Pic by Daminda Harsha Perera
A powerful shake up of exporters
In a recent forum and discussion on the country’s exports organised by MTI Consulting and Daily FT in Colombo, MTI Head Hilmy Cader threw a formidable challenge at exporters. He said that the country is doomed if exports do not grow in line with the growth in global trade and the exporters should wake from the deep slumber in which they have been savouring complacently. That was not a traditional ‘wake-up call’. Instead, it was a powerful ‘shake-up’ that leaves them with no alternative. They have to lift themselves and thrust forward if they are to fly high in the world of exports. Cader’s synthesis of the issue is as follows:
Sri Lanka’s dismal record of exports
During the 15 year period from 2000 to 2014, Sri Lanka’s exports have grown only by 2.1 times from $ 5.5 billion in 2000 to $ 11.5 billion in 2014. In fact, if one takes into account the country’s dismal export performance in 2015 at $ 10.5 billion which data were not available to Cader at that time, the growth is pretty dismal with an increase of a little less than even 2 times. In contrast, during 2000-14, Bangladesh had recorded an export growth of 4.7 times and Vietnam, 9.4 times. Because of the slow growth in exports, Sri Lanka’s exports as a share of its GDP had been continuously falling. He said that this was not an achievement about which the country could be happy. That was because imports are growing faster than exports leading to a widened trade gap requiring the country to depend principally on remittances to part-finance the deficit.
Concentration on a few product lines
Cader supported his claim by examining the constituent products in Sri Lanka’s export sector. In the export structure, apparel has been the largest segment accounting for 44% of the country’s exports. When the traditional three-tree products, namely, tea, rubber and coconuts, are added, all four sectors account for 73% of the total exports of the country. The balance 27% representing 24 sectors, according to Cader, had been dispersed among 3100 odd exporters. That composition has not changed much in the 10 year period from 2005 to 2014. The most disturbing observation, according to Cader, has been the zero level contribution by the entrepot trading activities to Sri Lanka’s wealth creation during this period.
