Colombo, January 18 (The New Indian Express): Apart from Non-Tariff Barriers (NTBs) in other countries, domestic trade barriers of various kinds also hamper Sri Lanka’s agricultural exports, reveals a recent study done by Verite Research (VR), a Colombo-based think tank.
Briefing the media on the findings of the study here on Wednesday, economists Nishan de Mel and Subhashini Abeysinghe said that it would be wrong to point an accusing finger only at the NTBs in other countries for Sri Lanka’s poor performance in agricultural exports. A look at the role played by domestic barriers would show that they have contributed significantly to the decline in agricultural exports as a percentage of the GDP and the poor export performance of Sri Lanka in relation to other countries in South Asia and the Far East.
Countries like Bangladesh Myanmar, Vietnam, Cambodia and Thailand are doing better than Sri Lanka, they pointed out.
They classified the domestic barriers into three categories: 1.Regulatory 2) Administrative 3) Information
Taking the Regulatory Barriers first, the study found that while parliament had passed a Plant Protection Act in 1999, no regulations have been made under it. With the result, the import of plants and plant materials is still taking place under the regulations found in Gazette 165/2 of 1981.
A Seed Act was passed in 2003 under which a Seed Council was to have been set up. But till date, there is no Seed Council.
As regards Administrative Barriers, there are a number of checks an agricultural exporter has to go through at the border (airport), and each of them takes valuable time, which can prove to be costly and ruinous if the product being exported is perishable. Even eight years after the war, there is a Air Force check which, according to Zuraish Hashim, Chairman of the Fruit and Vegetable Exporters Association, is useless and redundant. Perishable products which have to be kept under certain conditions are opened four times by four different agencies at the airport, adversely affecting the quality of the product exported.
The Sri Lankan Airlines is too slow compared to airlines in other countries .It seeks a six hour lead time to load goods while the same thing can be done in Thailand in an hour and a half and in China in three hours.
In addition there are information barriers too. Websites are not updated with the result the exporter is confronted by surprise demands at the border. Rules framed are not publicized so that the exporter is forewarned as regards the procedure.
The researchers pointed out that domestic barriers have led to many exporters quitting the field and have stopped new ones from entering it. The net result of all these barriers is that Sri Lanka has not been able to realize the full potential of its agricultural exports.
Agriculture accounts for 10 per cent to the GDP; 30 percent of the employment; and 23 percent of exports. Exports could be much higher and the on-going decline in the ratio of exports to GDP could to be arrested, if the domestic barriers are re-oriented conceptually and are implemented to aid rather than retard exports.
The ratio of exports to GDP has declined from 33 percent in 2000 to 12.7 percent now. In terms of efficiency and transparency at the border, Sri Lanka’s position had declined from the 87 in 2014 to 97 in 2016. Thailand is in the 44 th position; India in the 75 th; and Vietnam in the 86 th.
As per the latest Doing Business Index prepared by the World Bank, it takes 76 hours for an exporter to comply with documentary requirements in Sri Lanka, compared to 38 hours in India, 11 hours in Thailand and 50 hours in Vietnam.
The multiplicity of ministries and agencies which an exporter has to contend with needlessly delays and complicates matters. The problem is further complicated by a lack of coordination between these various agencies.
According to Dr.de Mel, it is time the Sri Lankan bureaucracy learnt to perform better as many of the problems of the exporters are administrative. There is no point in having legislations if the officials do not frame the required rules under the them and implement them. The Sri Lankan bureaucracy needs better qualified and motivated personnel and not rejects of the university educational system such as holders of external degree, Dr. de Mel said.
(The featured image at the top shows Verite Research economists Nishan de Mel and Subhashini Abeysinghe)