'Export markets need to be aggressively diversified'

Sanjeevi JAYASURIYA

There is a need to aggressively diversify the export markets and look for greater regional integration. More concentration should be paid to markets with larger emergent middle classes in Asia, Latin America and Africa, Dr. Jayantha Roy Senior Economic Adviser of Deloitte Consulting LLP said.

South Asian economies especially Sri Lanka and Bangladesh are export oriented and are highly depended on imported fuel. This increases the vulnerability during an oil crisis, he said at a presentation on "the impact of global downturn and the strategies and action for South Asian economies to retain competitive" organized by Ceylon Chamber of Commerce (CCC) held recently in Colombo.

The continued high raw material prices create inflationary trends in South Asian economies. There is a need to diversify the export basket, look forward for developing integrated regional production networks to create greater product diversity and competitiveness. Developing long term procument relationships, increasing regional integration in commodity trade and investing in alternative fuel technologies are suggested as a way to curb the escalating commodity prices, he said.

He pointed out that the goal should be commercial intelligence and effective B2B platforms. Another key aspect would be business-government partnership in developing commercial intelligence in growing markets by developing close working relationships with diplomatic missions abroad.

Increasing investment in HR for inclusive growth and developing national competitiveness is vital. PPP approaches that have worked successfully in countries such as Germany, Austria, Singapore should be looked at as possible models.

He highlighted the importance of encouraging and investing in inclusive growth through grassroots entrepreneurship. Such bottom of the pyramid entrepreneurship adds great value by widening the domestic consumption and production base. He commended the CCC for its YBSL programme, which is "doing great work in this area". He also observed that it is imperative to invest in new product development to reduce dependence on a limited basket of exports. Product development and R&D can be dirty words in emerging countries, with many firms feeling that they just don't have the resources to divert to such activities.

However, creativity and new product development does not always need deep pockets. Develop innovation clusters and knowledge platforms, Dr. Roy said.

Countries such as Sri Lanka and Bangladesh can take advantage of the institutions being developed in India through Public- Private platforms and develop linkages with them. He urged to aggressively develop South Asian regional markets and production networks. Businesses need to become champions of policy change leading to greater South Asian integration.

Dr. Roy noted that being the home of SAARCTrade.info portal, CCC is an innovator in this respect.