Sri Lanka’s Colombo Port benefits from Bangladesh’s record export growth.
The Morning: Forex-starved and crisis-stricken Sri Lanka has been able to benefit from the exports of Bangladesh that are shipped to its market countries through the Port of Colombo, The Morning Business learns. Speaking to The Morning Business, Shippers’ Academy of Colombo CEO Rohan Masakorala stated: “The ports and shipping sector benefited from Bangladesh exports and imports, since Bangladesh relies on Colombo, as there is transshipment that happens via Colombo to Bangladesh.” According to the data released by the Export Promotion Bureau (EPB) of Bangladesh, they were able to earn a revenue of $ 52.08 billion during the last fiscal year (FY) 2021/2022 exceeding their target of $ 51 billion. The current target of Bangladesh remains at $ 65 billion for the ongoing fiscal year, reported bdnews24.com on 3 June.
Masakorala stressed the fact that it is time for Sri Lanka also to adopt a policy strategy focused on export development countries such as Bangladesh, India, and Vietnam instead of adopting “backward policies”. Referring to the apparel sector, he said it has a $ 8-10 billion target for the year. Nevertheless, he said, Sri Lanka does not have to rely on apparel forever, but can explore electrical and electronic component manufacturing, and various segments of tourism for export services. He elaborated that Bangladesh has been able to manufacture goods with a lower cost of product and has been able to upscale beyond Sri Lanka even though Sri Lanka also has been able to make apparel its top export product, as tea, rubber, and coconut together have not been able to achieve the revenue generated by apparel exports.
Responding to the inquiry made by The Morning Business as to whether Bangladesh has become a competitor to Sri Lanka, Masakorala said that Bangladesh does not directly compete with Sri Lanka; however, it is the buyers who nominate different countries. Thus, Bangladesh receives more orders from retailers and manufacturers due to the lower production costs. He added that Bangladesh has been exporting its products for two to three decades, and when it comes to apparel, 80% of the country’s export revenue comes from apparel exports. In 2022, Sri Lanka expects $ 20 billion in export revenue. The Sunday Morning Business reported on 10 April that exporters are optimistic on achieving the revenue despite the ongoing economic crisis, while the National Chamber of Exporters of Sri Lanka (NCE) remains uncertain due to the economic crisis.
Sri Lanka’s geographical positioning in the Indian Ocean has placed it in a unique position to be benefited from the developments in other countries in the region. It is in this backdrop that Sri Lanka is looking at reaping the benefits of the record growth in Bangladesh’s exports. Sri Lanka also enjoys strong bilateral and trade ties with Bangladesh that are expected to further strengthen with a proposed free trade agreement (FTA). Sri Lanka already has two operational FTAs with India and Pakistan. Therefore foreign businesses/investors interested in doing business in the region could look at setting up base in Sri Lanka to engage with other economies in the region. Also, businesses in the region could look at using Sri Lanka as a sales point given the country’s strategic location.
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