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The Exporters Association of Sri Lanka (EASL) has called upon the Government to assist them with cutting down finance, energy and shipping costs and introducing the deregulation and simplification of export procedures in order to leverage export industries and improve export figures this year.

A. S. M. Muzzammil Chairman EASL in a letter to Finance Minister K.N.Choksy said that country's exports are still in a declining situation and therefore, such assistance is a necessity.

Muzzammil said: "2001 was a disastrous year for exports with a drop of about 13% in dollar terms over 2000."

The drop of about 2.5% in dollar terms in 2002 over 2001 only confirms that exports are still declining and in dire straits.

This situation could worsen with the impending war situation in Iraq.

During the year 2001/2 the spiraling cost of energy and the rising cost of living further added to the costs of exporting companies making many of them even less competitive in world markets.

In addition to this, further taxation on costs was introduced on exporters. We are certain that a study would reveal that many markets have been lost to our country as a consequence.

Many companies have suffered in silence and their investments rendered unproductive and employees made redundant.

It must be emphasised that these companies have now become less viable due to circumstances beyond their control.

Under this scenario, the issue of incentivising more investment into the sector becomes less important.

Incentives based on profits too will only benefit ventures that are still viable. The objective should therefore be to safeguard existing investments that have become uncertain and make them more competitive.

The need therefore is to remove all the disincentives that plague the export industry as the primary strategy should be to reduce costs."

The EASL proposals are:

Finance Costs:

* There is potential to reduce the finance costs of exporters by the banking sector recognising the need for supporting this important sector at this time of need.

* Removal of the Debit Tax and Ports levy both of which were introduced as a temporary levy for a period of six months but has now been extended.

* Ensure that all monies due to exporters are promptly paid including tax and VAT refunds.

* The exchange rate to reflect the real value of the rupee.

Energy and Other Costs

* To lower the cost of energy to the export sector as this is amongst the highest in the region

* To lower other costs such as Port charges, communication costs

Shipping Costs

* The Government taking the initiative to persuade shipping companies to avoid using anti -competitive practices to earn extra revenue such as terminal handling charges, bill of lading charges etc.

Deregulation and Simplification

* Set target dates and monitor the implementation of deregulation and simplification of export procedures.

* Speedy implementation of EDI with the clear objective of reducing costs.

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