The Sri Lankan government launched The National Export Strategy (NES) as a part of the Sri Lankan government strategy to achieve its Vision 2025, which sets the objective of transitioning its economy to an export-led more vibrant country with a knowledge based, highly competitive, social marker economy and a regional economic hub of high value exports at the center of the Indian Ocean.
The NES builds on the vision “Sri Lanka – an export hub driven by innovation and investment”. This emerges from a consensus of the entire export community about the upcoming tasks and the heaviest roadblocks to be dislodged. It defines a detailed road map for faster export growth and acknowledges that things need to be done differently to increase the contribution of trade to economic development
The NES highlights 4 strategic objectives to drive the reforms needed for Sri Lanka to reach its potential:
1. To have a business-enabling, predictable and transparent policy and regulatory framework that supports exports.
2. To strengthen Sri Lankan exporters’ market-entry and compliance capacities.
3. To become an efficient trade and logistics hub to facilitate exports.
4. To drive export diversification through innovation and by strengthening emerging export sectors.
Under the NES, 6 focus sectors for innovation and export diversification have been identified. These focus sectors provide a good mix of industries with different growth trends, yet ensure the NES remains focused to achieve the key objective of export diversification during its five-year implementation period.
1. Information Technology and –Business Process management (IT-BPM)
IT–BPM industry recorded an explosive growth in the last 10 years and expanded by 300% to reach US$1.2 billion in export revenue. The sector provides employment to more than 90,000 professionals and contributes 12% of Sri Lankan services exports. Compared with other export sectors, the IT–BPM sector has a huge a potential to increase export revenue. Sri Lankan IT–BPM companies have demonstrated their competitiveness internationally. Software developed by leading Sri Lankan IT companies has been used at ebay, London Stock exchange , Emirates, British telecom, Three Gorges Dam, Expedia and Microsoft, etc. Sri Lankan IT industry’s competitiveness rests on reasonable costs, high-quality services and an educated workforce with exceptional skills.
2. Wellness tourism
Sri Lanka has strategic advantages for the development of its wellness tourism sector. As a part of a 2500 years old civilization, the country has developed a rich ayurvedic and herbal medication for better health and relaxation that can be used to foster a sustainable wellness tourism value chain that is deeply rooted in local communities.
3. Spices and concentrates
Sri Lanka produces a large variety of products ranging from bulk spice products of true cinnamon to value added essential oil. This sector is dominated by smallholders, with over 70% of cultivated land being smallholdings and home gardens. Sri Lanka exports around 30,000 tons of various kinds of spices annually. At present, Sri Lanka is the ninth most important exporter of spices (cinnamon, pepper, cloves,
cardamom, and nutmeg) in the world, with total spices exports reaching US$273 million in 2016. Sri Lanka is the largest producer and exporter of ‘true cinnamon’ in the world.
4. Boating industry
Sri Lanka’s strategic geographical location at the crossroads of the main maritime routes in South Asia, combined with the Sri Lankan boat industry’s long experience, can make the country an attractive maritime hub that provides a full range of services for a boat’s entire life cycle, including assembly, refuelling, refit and repair for numerous types of boats, including both seagoing and inland watercraft.
5. Processed food and beverages
Processed food and beverages is a booming sector in Sri Lanka and is diversifying. Sri Lankan products are high quality and have healthy characteristics due to the excellence of local raw materials and the industry’s commitment to investment in manufacturing processes and improving its market image. Leading firms already established in the sector. Export growth over the last few years clearly shows that the country is in a good position to increase food and beverage processing and transform it into a major industry, turning the sector into a leading foreign exchange earner and a standard-bearer for high-quality Sri Lankan products abroad.
6. Electronics and electrical components (EEC)
The EEC sector is an up-and-coming sector for Sri Lanka, with the potential to stimulate innovation, R&D and investment in the country. It is well-positioned to benefit from the EEC industry’s steadily increasing levels of manufacturing in Asia, and can contribute to the diversification and technological upgrading of Sri Lanka’s exports.