Oct 22, 2015 (LBO) – Sri Lanka should move in to production based on high innovative technology as the traditional methods of production do not help Sri Lanka to be competitive in the global market and achieve higher productivity, an ex-Central Banker said
“We must go for new innovation,” W.A. Wijewardena, former Deputy Governor of the Central Bank told a forum organized by Institute of Policy Studies recently.
“We have to move away from the production that based on simple technology to a production based on complex technology.”
In many instances politicians have said that value addition is the key for export growth for Sri Lanka but whether Sri Lanka is equipped with the right technology is a growing question.
An innovation driven nation is a one option.
“Innovation do not come immediately. Innovation comes in only after we develop country’s constitution, institutions which generate innovation culture in the country,” Wijewardena argues.
“That is why the government is going to spend a 6 percent of GDP on the education over the next five year period. The large segment of that will be spend on research, development and now a new concept of marketing. These three have to come together. Because research has to be done by institutions, has to be developed by the private sector and it should be marketed.”
“This is why we will be gaining the prosperity because we cannot depend on agriculture anymore to bring prosperity to the country,” he said.
“Services sector can be great if Sri Lanka do it for an exceptional rate and that leaves no choice for Sri Lanka but to improve its research and development and also the marketing portfolio.”
Over the past few decades Sri Lanka’s agriculture sector exports have experienced drop in commodity prices. The manufacturing exports are also not going exceptionally well nor are they going too badly.
Economists and researchers say regaining GSP plus concession would help Sri Lankan exports.
“Over 40 percent of our garment sector actually going to EU, regaining GSP plus will help to catch the share of the market in the EU. If you look at the countries like and the Vietnam Bangladesh they have been able to capture higher share in the EU market.” a researcher from Institute of Policy Studies said.
Sri Lanka’s Export earnings dropped by 2.6 per cent to US dollars 932 million in July 2015, reflecting a year-on-year decline in both industrial and agricultural exports Central Bank data showed.
Exports of all sub categories of industrial sector, except transport equipment, petroleum products and animal fodder, declined in July 2015, owing to the weak global demand and reduction in export prices.
Industrial exports declined 2.6 percent in July 2015 to 682.4 million US dollars compare to the same month last year while agricultural exports declined 2.7 percent 245.3 million US dollars.
Wijewardena said there are list of innovation strategies that the government of Sri Lanka could implement.
“To do that we have to be linked with universities. You cannot do it alone,” Wijewardena said.
“Research institutions also have to be funded while we build new research parks. These are the some of the things which the government should do under its megapolis development programme,”
“Because without that the future sustainability of the industry with this marginal tax concessions will not get Sri Lanka anywhere.”