- Committee under Treasury to ensure seamless access to intermediate goods required by exporters
- Import restrictions on items deemed as non-essential extended for further six months effective July 2
- Sri Lanka has long neglected building and assisting its domestic industrial base for cheaper imports
It is inaccurate to say that import controls have hamstrung the local manufacturers and will impinge economic growth, as those who are engaged in domestic value addition industries can continue to import the required inputs, while essential industries such as agriculture and pharmaceuticals among others have also been freed from any restrictions, the Central Bank (CB) said.
To this end, a special committee has already been set up within the Treasury Department to provide seamless access to imported raw materials—often referred to as intermediate goods—for those industries and businesses engaged in local value addition for export purpose.
The committee is also mandated to look into any specific requests made by industrialists, who want import access to certain fresh inputs used in their export-oriented manufacturing.
“There will be a case-by-case determination by the Treasury and the committees that have been appointed. So, there won’t be any difficulties for industries, particularly for the export-oriented industries to get their imported raw materials and the intermediate products,” Central Bank Governor Prof. W. D. Lakshman said.
Sri Lankan extended its import restrictions, mainly on items deemed as non-essential for a further six months effective from July 2.
However, the Central Bank said the second circular issued by the government is “a much more relaxed version of the original one.”
The pandemic may have dealt a crippling blow to the local economy, but it has given a fresh impetus to the local industries to up their game while giving rise to new industries, specially in import substitution sectors as the recent lockdowns made the danger of over-reliance of imports clear.
Many governments around the world banned certain products, which could be manufactured locally and suspended the import of certain non-essential goods until the situation improved and invited local businesses to manufacture those products matching the world-class standards, under State patronage.
It was only a fortnight ago the Sri Lankan confectionary industry announced they joined hands with the Coconut Research Institute to develop a suitable and speciality coconut oil to be used in the industry, moving away from the imported palm oil fats when government increased taxes
on the same.
If the joint research becomes successful, it will open up opportunities for local producers—both existing and new—to start manufacturing this variety of coconut oil fats required by the confectionary industry, opening up new investments and new jobs in the sector.
The results may come in the medium term and there could be short-term pain for local industries and the consumers who have long been got used to easy imports.
Sri Lanka has long neglected building and assisting its domestic industrial base for cheaper imports, specifically from China, allowing the country’s handful of heavy-duty industries that existed through late 1970s to crumble.
This resulted in over a million people to seek foreign employment mostly as unskilled labourers, while another million now drive three-wheelers, mostly the ones in their prime working age, depriving the country of a crucial labour force, which otherwise would have been put to use for more productive purposes.