Wednesday 26th of January 2022

English Tamil

The country does not have a trade policy 

2021-04-27 6168

This is the magnitude of the internal tragedy of the economy


Only 10% -12% of the budget proposal is implemented


Customs officials sell the data and take the money home


Sri Lanka's international monthly trade data is 107 months old


Policies should be based on actual data and information



(Sujith Mangala De Silva)


An Economist and the Director of the “Verité Research Institute, Ms. Subhashini Abeysinghe questions as to how the country can be economically developed in the face of a lack of capacity and rights for the public to know whether the budget proposals have been implemented or not.

Ms. Subhashini Abeysinghe who pointed out that only 10% to 12% of the more than Rs. 1 billion budget proposals are implemented also emphasized that Sri Lanka does not have a trade policy.

Subhashini Abeysinghe was speaking at the public conference, organized by the National Movement for a Just Society at the Janaki Hotel in Colombo on Wednesday (21) under the theme 'The Future of the Sri Lankan Economy while further expressing her views……..

The export percentage of the country which was around 20% from the GDP has dropped to 14%. Some of the solutions for this problem are politically challenging. Political leaders must have a good political will to implement such solutions. It is not easy to find politicians who have such a will and think of the people of the country without thinking of themselves and their next mandate.

It must be said that the solution to the problems, faced by a country can only be found by formulating policies and implementing those policies properly. As a country, Sri Lanka has a great deal of difficulties in formulating and implementing such policies. However, no government in Sri Lanka has been able to achieve the economic goals proposed in its economic manifesto.

Every government elected so far has strived to increase per capita national income to US $ 5,000 or US $ 10,000, increase economic growth to 6%, 8% or 10%, reduce the budget deficit to 5% and increase the country's foreign debt to 60%.

Governments need to look at the extent to which these promises, made to the country and people annually by their budget proposals, are being fulfilled. The Minister of Finance presents this budget proposal to the country at the end of every year before the Parliament at the expense of the people. These resolutions state how the tax money, collected from the people is spent for the benefit of the public.

However, did you know that only 10% to 12% of budget proposals worth over Rs. 1 billion are implemented?.

The most unfortunate situation is that the public does not have the ability to know whether a budget proposal has been implemented or not. The reason for this is that even under the right to information act, the relevant government agencies do not provide such information to the public even though they request it.

It must be said that no matter how much we talk about economic policies, the development of the country is very challenging in the face of the non-implementation of the country's budget proposals and economic policies and the irresponsible and non-accountable way, those who are responsible, act.

Meanwhile, there is a great deal of dialogue in the country regarding trade agreements and the biggest criticism within that dialogue itself is that these trade agreements are not being studied properly.

No study is carried out as to what are the pros and cons of these trade agreements. The most unfortunate situation is, we do not have a trade policy as a country.   If we really want to implement a proper trade policy by considering the pros and cons of these each trade agreement, we should have information on what trades to invest, what are goods and services we should export, for what countries and where we face the competition.

We need data to analyze the pros and cons of formulating and implementing a formal trade policy or signing a foreign trade agreement and implementing it. Those are data, related to import and export.  

Do you think that obtaining this data is easy? This data is collected by the Sri Lanka Customs. Every country in the world except Sri Lanka, provides this data to its citizens through the internet free of charge. But our country's Customs charge for this data. There is no way to know how much this data is cost and from whom to get it. However, the right to Information Act clearly states that if a government agency charges a fee for providing its data, the details of those fees must be published. But Sri Lanka Customs has not issued such a statement. It is not even possible to go to their website and find out who to call to get that data.

To do an effective study about the international trade, it is not enough to analyze Sri Lankan data alone.  We need to have a good understanding of the world's import-export and the competitors that compete with us. We can get that details from the UN Commercial Trade Database which had been established jointly by the United Nations and other organizations, related to International trade.

As a country, if Sri Lanka signs a foreign trade agreement with any country in the world, we need to have a better understanding about the countries that  export the same goods to that county ,the nature of the  competition and the reliefs and facilities those compactors get.  Therefore, the data files in these databases are very important but the monthly data in Sri Lanka has not been updated in the UN Commercial Trade Database after 2017. Sri Lanka's international monthly trade data is 107 months old. But the international monthly trade figures for India and Pakistan have been updated up to October 2020.

Why, Sri Lanka Customs are acting in this manner? In every country in the world, public institutions spend huge sums of money to collect huge amounts of data. Every country in the world recognizes this data as public property.

However, the Ministry of Finance has authorized the Sri Lanka Customs authorities to sell the vital data, collected at the expense of the public and transfer 40% of the proceeds to the Consolidated Fund and take the remaining 60% home. Thus, the sale of this data by the Customs authorities in 2017 only, was Rs. 8 million.

While governments in other countries are working to develop the accessibility to this data free to relevant parties, including relevant researchers, the government of Sri Lanka is doing the exact opposite.

Import taxes in Sri Lanka are very high. Therefore, tax relief is very important. We are aware that a list of duty free items are issued by the Ministry of Finance after each budget proposal. However, Sri Lanka Customs does not provide information on goods and services that are imported which are entailed for tax concessions.

Once a policy, condition or program has been put in place, it is important to evaluate whether it has fulfilled the expected objectives, achieved those goals and got the expected results. Of course, as a country, Sri Lanka does not make such an assessment. If Sri Lanka Customs provides this data, it is possible to assess whether the policy objectives have been met. 

A country is implementing a tax relief scheme with the intention of getting a specific benefit. But none of us know if anyone has used those tax reliefs and benefited from it. Therefore, as a matter of policy, the government and public institutions should release relevant data through the internet free of charge.  

Hence it should be emphasized that the policies of the country should be formulated on the base of analyzing factual data and information. It should also look into whether those policies are being implemented and whether there are action plans in place. There must be an action plan to implement a policy. In order to formulate a proper action plan for a particular policy, it requires a time frame and funding for the proposed activities. It also requires formal supervision.

Public institutions submit their performance reports to Parliament. What are those performance reports? All of these reports are purely activity-based reports which are not results-based reports. It must be said that this situation is a big problem. Therefore, in order to solve the problems of this country and develop the country economically, it is essential to rectify these serious mistakes that are relevant to policy making and policy implementation.