Sep 25, 2020 (LBO) – The commendable performance of Sri Lankan exporters and the resilience shown during an unprecedented COVID 19 pandemic is to be rewarded by the Sri Lanka Export Development Board, of the Ministry of Trade, through a proposed export stimulus Reward Scheme.
The exporters who managed the risk and the vulnerabilities despite the current global economic crisis to be further encouraged by rewarding their achievements.
The proposal of the Sri Lanka Export Development Board presented by the Minister of Trade, to the Export Development Council of Ministers (EDCM) on an Export Development Reward Scheme (EDRS) at its meeting held on 23 September, has been discussed by the council led by the President Gotabaya Rajapaksa.
The proposed scheme will be operative under two categories; covering SMEs and large exporters for consecutive 2 quarters starting from 01st October 2020 based on the export performance of the exporters. The main objective of the scheme is to encourage exporters to increase their volume of exports in the future to be eligible to apply for the rewards.
The quantum of reward will be calculated based on the incremental export turnover of the particular quarter compared to the value earned a year ago. Large scale exporters with an annual export turnover of over Rs. 750 million will be paid 2% of the additional export earnings earned during the relevant period with respect to the corresponding period of the previous year while SME Exporters getting 3.5% of the additional export earnings earned during the relevant period with respect to the corresponding period of the previous year.
The implementation of this scheme is expected to generate an additional export income of US $ 600 million during the period of 1st October 2020 and 31st March 2021.
Exporters have been adversely hit by the cancellation of orders and declining product demands. However, the exporters are diversifying their production lines grabbing the global new emerging opportunities due to the COVID 19, while some other companies are diversifying markets to avoid the uncertainties. Such positive changes can make a progressive difference in the country's export earnings.
The Sri Lanka Export Development Board is of the view, that in spite of the difficulties due to the global economic downturn, the positive contribution made by the exporters to the Sri Lankan economy be appreciated. This proposed Rewards Scheme will encourage export industries to secure existing markets, penetrate new markets, establish and promote backward linkages, diversify into new products according to the existing demand created through COVID 19.
Due to the adverse effect of Covid-19 felt by the supply chains of the dominant export sectors of Sri Lanka, it is doubtful to maintain the export earnings that have been achieved in the previous year. In such a situation, the proposed scheme will encourage exporters to make progress beyond the export performance achieved last year. It is expected that the EDRS will help the export sector to improve its competitiveness which provides a timely incentive for companies that have demonstrated their commitment and competence by bringing in large volumes of foreign exchange while increasing value addition and diversifying products & markets.
Prabhash Subasinghe, Chairman, Export Development Board commented that “this is a game-changer for our exporters as the rewards will help the exporters immensely as well as help Sri Lanka by increasing our foreign income”
The EDRS will be in operation soon and a formal announcement shall be made by the EDB shortly.