"In that context I welcome the Sri Lankan government’s efforts to improve the business environment by tackling existing barriers to trade and streamlining bureaucracy. I also appreciate recent efforts by the government to ask local business leaders what they need from government to help them succeed," he said speaking at the AGM of the Sri Lanka Apparel Exporters Association.
The High Commissioner paid a tribute to the country’s garment industry as well.
"I applaud the continued industry move away from low-value products towards high-value niche garments, using the latest high-tech fabrics, particularly in sportswear and women’s underwear," Rankin said.
He also touched on the loss of GSP+ trade concessions to the EU.
"The loss of duty concessions under the EU’s Generalised System of Preferences does not so far appear to have greatly affected the volume of Sri Lankan exports to Europe. Indeed overall exports are still on track to rise year on year. But I recognise that margins may have been tightened."
Excerpts of Rankin’s speech follows:
"With the increased investment in ports and roads that is taking place in this country, I believe that Sri Lanka is well placed to position itself as a logistics hub for clothing manufacturers across the region.
Western Economic Challenges...
The United Kingdom, and Europe as a whole, is of course the single biggest market for your exports. You will all have seen in your newspapers this morning the comments of Christine Lagarde, the Managing Director of the IMF, that Asia will not be immune from the current economic challenges facing the Euro Zone, and which also affect the UK and the USA. But I am pleased to note that so far your sector has been resilient in the face of the economic downturn in these western markets. While I will resist a prediction of the precise outcome of the current economic turbulence for your sector, I can tell you that the UK companies to whom I have spoken in my work continue to see Sri Lanka as a primary source of high quality, affordable clothing .
Having said that, there is no doubt that retailers in the UK, as elsewhere, will be keener than ever to keep a tight rein on costs. So I hope that customers and manufacturers can work together even more closely to increase productivity, shorten lead times, streamline logistics and innovate where possible.
I am aware of the controversy over the loss of GSP+, which occurred prior to my arrival in Sri Lanka. The loss of duty concessions under the EU’s Generalised System of Preferences does not so far appear to have greatly affected the volume of Sri Lankan exports to Europe. Indeed overall exports are still on track to rise year on year. But I recognise that margins may have been tightened.
Sri Lanka could still profit by regaining the GSP+ concession. But, it is for the Government of Sri Lanka to decide whether it wishes to meet the GSP requirements and re-apply for its benefits.
In the nine months I have been here I have tried to develop a hands-on understanding of your industry. I have visited a number of clothing factories and would note how impressed I have been with what I have seen so far - clean, modern factories with good working conditions for their staff. And I applaud the continued industry move away from low-value products towards high-value niche garments, using the latest high-tech fabrics, particularly in sportswear and women’s underwear.
During my discussion with representatives of your industry I have also heard that the long-term sustainability of the industry is likely to depend on increased automation and increased use of Computer Aided Manufacturing and Design machines.
This new emphasis on design is an important one. The UK has long been a centre of design excellence, with our world class fashion designers. But I’ve been delighted to see the growth in Sri Lanka’s own domestic design process – creating your own unique brands.
The Sri Lanka Design Festival, in which the UK’s British Council and UK designers play a strong role, showcases the local industry, including both modern clothing and traditional hand-loom garments and craft items. Sri Lanka is also taking a regional lead in South Asia on implementing ‘green’ measures and ethical manufacturing practices which I welcome. Marks and Spencer’s first carbon neutral lingerie was produced here in Sri Lanka.
Developing the economy...
I look forward to encouraging more UK companies to consider Sri Lanka as an ethical and profitable trading partner. In that context I welcome the Sri Lankan Government’s efforts to improve the business environment by tackling existing barriers to trade and streamlining bureaucracy. I also appreciate recent efforts by the Government to ask local business leaders what they need from Government to help them succeed.
The answer that I have heard from UK companies, and more widely, is that they hope the Government will provide four things: certainty and stability; increased transparency over Government contracts; tax incentives to allow them to grow; and confidence that their investments will not be subject to arbitrary action. Above all they want more ‘room’ for businesses to simply get on with what they do best - doing business.
The UK Government has recognised this, by taking decisive action to tackle its budget deficit and by gearing its economic policies heavily in support of both foreign investment and exports. We believe this is the only way to achieve strong, sustainable and balanced growth.
Despite challenging times for Western economies, I believe that the prospects for bilateral trade between the UK and Sri Lanka remain bright. In 2010 Sri Lankan exports to the UK totalled over US$ 1 billion, and imports from the UK were worth some US$ 186 million. That made the UK Sri Lanka’s second largest trading partner by volume. And there are over 100 companies in Sri Lanka with a UK affiliation including major companies in the garment sourcing sector such as Marks and Spencer, Tesco, Triumph and Next.
This year, the UK Trade and Investment Section of the British High Commission is having a record year in terms of enquiries from British companies wishing to do business in Sri Lanka and develop trade partnerships – including in the garments industry. This reflects the continued and increasing confidence in the quality of the goods that you all, as members of this Association, produce. Long may you continue to do so."
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