SL's economic buoyancy issues

This country's export performance is bound to bring a relieving sigh to the state and to many of those who have been monitoring this country's progress in the current post-conflict years. As we reported yesterday, our export performance in the first half of this year has exceeded expectations and recorded an over 40 percent growth rate compared to 2010. In March this year alone, our export earnings notched a record US $ one billion. Thus, Sri Lanka's economic buoyancy seems to be beyond doubt.

It is notable that textiles and garments are accounting for over 42 percent of our export earnings so far this year. This proves that our garments exports are quite capable of braving the international restrictions which have been brought against them. However, while forging ahead bravely on the export development front we also need to bear in mind that a realistic appraisal needs to be constantly made of economic opportunities and possibilities that are opening up for us. Export Development Board chairman Janaka Ratnayake's comments, we believe, are very relevant in this connection. While stating that Sri Lanka is 'poised to capitalize on the global recovery', he added that the country 'needs to reduce its dependence on EU and US markets by finding new markets in the long run.'

There is considerable substance in these observations. True, the long winter of economic discontent in the West is showing signs of easing somewhat, but is the worst over? It is too early to claim that one has placed his fingers firmly on what went wrong in Britain over the past couple of weeks, but some of the available evidence on the current problems seems to be pointing in the direction of economic issues as playing a major role in the mass rioting. As some knowledgeable observers put it, how come tens of thousands of youths got into an explosive frenzy of smashing residences and shopping malls and grabbing high tech equipment and other luxury items, in particular, at one and the same time? Evidently, the gap between the advantaged and the disadvantaged has been growing steadily. Popular discontent, that is, has been steadily creeping- up on Britain.

But Britain may not be alone. Europe-wide, a winter of economic discontent has been spreading surreptitiously, prompting some commentators to already speak about 'The Decline of Europe.' Greece, Portugal and many more comparatively minor economic powers may not be the only countries which are feeling compelled to make ends meet with some difficulty. With time many more countries may feel the need to go in for IMF bail-outs and in this development we will have the proof that the worst is not over for the West from an economic point of view.

All of this and more points to the need for countries such as ours to seek new markets for our exports in the global market. After all, it is the purchasing power of people that finally matters and if this capability is shrinking we have no choice but to be on the look out for new economic opportunities to keep the national economy ticking.

As is well known, it is to the BRIC economies that one must look, for new market opportunities, in the global economic order which is opening-up. That is, the future of the world economy depends considerably on Brazil, Russia, India and China, which are fast establishing themselves as the economic power houses of the world. Right now, their collective economic growth is running neck-to-neck with that of the US and may be already nicking it. With some 40 percent of the world's population and 25 percent of the world's land mass, the future could be said to lie with BRIC and Sri Lanka would not be wrong in looking BRIC-ward for export opportunities and other openings for material advancement.

In strategizing her economic advancement, we believe Sri Lanka should take into account those countries whose middle classes are growing fast and whose consumer base is seeing a phenomenal expansion. This is certainly true of India where middle class consumers are not only growing in leaps and bounds but whose urban growth is proving considerable. These middle class consumer markets must be catered to by our export industries and it is best that we conduct market surveys of these up-and-coming economies in the course of drawing-up our growth plans.

With these comments we have touched on only some aspects of the growth prospects currently offered by the international economy. More work needs to be put in, to ascertain how we could forge ahead with our economic growth plans. Suffice it to know, however, that East Asia is the new growth centre of the world.