26 February 2016 10:58 am
By Shabiya Ali Ahlam As Sri Lanka’s exports continue to slow down, Colombo-based economic think-tank Verité Research has urged policy makers to look towards further exploring export finance, an enabling policy that could potentially mitigate challenges faced by the nation’s struggling export sector. While export finance could provide exporters and financial institutions the means to manage risks of international trade, it would essentially allow the export environment to expand and diversify into newer markets, products and players. “It (export finance) remains a highly relevant, yet a severely underutilized set of tools,
to revitalize Sri Lanka’s sluggish export sector,” emphasized Verité Research. While the government in its 2016 budget endorsed the setting up of an Exim Bank, Verite stressed measures should also be taken in three key areas i.e. introducing new and innovative export finance s o lu tions, improving access to reliable and updated information, and improving professional capacity and credibility of the institutions.
The key weaknesses in facilitating export finance and promoting exports include the limitations in resources and expertise on the subject. This, Verité said is in addition to the low level of policy focus, government support and initiative to facilitate the same. “I t is essential for the government to take a proactive role in helping build capacity and encouraging institutions in-turn to play a proactive role in facilitating this endeavour,”
stressed Verité Research. To introduce new solutions, Verité stated due emphasis must be given to this area so that alongside the increasing of capacity and competitiveness of exports, steps could be taken to improve cash-flow liquidity of exporters, incentivise access to new markets, and develop innovative and tailor-made financing facilities to increase participation of SMEs and domestic market oriented companies in exports.