CB tells exporters ‘forget GSP+’ and cash in on peace dividend

Central Bank has painted a glossy picture of Sri Lanka’s exports and dismissed the necessity of a government proposed US$ 150 million assistance package to the apparel exporters, insisting that they are fully capable of handling the shortfall of 78 million euros if GSP+ is removed.
Addressing the media at a lengthy press conference last week Central Bank Governor Ajith Nivard Cabraal noted that the US$150 million support package that was promised verbally by the President earlier would not be needed as the depreciating rupee would equate the 7% concession given by GSP+.

Governor Ajith Nivard Cabraal

“Since the rupee has depreciated there is no loss for the exporter in Sri Lankan rupees,” he said adding that the Central Bank would concentrate on recouping the lost 78 million Euros.
“That is my job and that of the Central Bank. There is no need for the exporters to worry about that.”
Instead he advocated that the industry make full use of the sharply declining inflation and interest cost on borrowings to maintain competitiveness. Improved investor confidence, stable exchange rates and Sri Lanka’s improved rating outlook would all, according to Cabraal smoothen the way for exporters. However he insisted that little could be done if the apparel industry did not try to help themselves too.
“The apparel sector must continue to diversify, continuously improve quality, upgrade technology and facilities and fast track productivity improvements,” says the Governor insisting that the government too would continue to play its role by maintaining a depreciated currency and providing infrastructure.
Recalling that similar negative sentiments had been expressed in 2005 when the quota system or Multi Fibre Agreement (MFA) ended, he emphasised that this was just another risk that Sri Lanka would have to learn to manage.
Nonetheless when asked about possible job losses Cabraal shrugged off the challenge by stressing that it was the nature of business in an open market and that they would find jobs in other factories. (UJ)