Sri Lanka exports jump on EU, US demand for garments

Updated 21 August 2014
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Sri Lanka exports jump on EU, US demand for garments

COLOMBO: Sri Lanka’s trade deficit narrowed substantially this year thanks to increased demand for clothing exports to the US and Europe, the island’s central bank said.
Exports jumped 16.8 percent to $5.44 billion in the first six months of calendar 2014 compared to the same period last year, the Central Bank of Sri Lanka said.
Imports meanwhile declined 1.2 percent to $8.99 billion compared to the same period last year, the bank said.
Overall, the trade gap reduced from $4.44 billion in the first six months of last year to $3.55 billion in the same period this year, the bank said.
Sri Lanka’s exports in mainly garments to the EU jumped 34.6 percent while those to the US increased 12.1 percent, as Sri Lanka’s $4.5 billion clothing sector recovers from a slowdown.
“The rapid growth in the apparel industry indicates the ability of the industry to achieve the target for exports of $5 billion well before 2016,” the bank said, releasing its trade review for the first six months of 2014.
The bank said retailers were increasingly turning to Sri Lanka, instead of traditional garment hubs such as Bangladesh which is under international pressure over safety standards and conditions following a string of deadly accidents.
Tourism earnings also increased strongly to $1.05 billion in the first six months of this year, up 33.8 percent compared to the same period last year.
Sri Lanka’s economy recorded growth rates of over eight percent in the first two years after ending a decades-long separatist war in 2009, but since then expansion has slowed.
Foreign worker remittances also increased 10.6 percent to $3.36 billion over the same period last year, the bank said.
The International Monetary Fund noted last month that Sri Lanka was one of the fastest growing economies in South Asia, but the island was also vulnerable to sudden external shocks because of high levels of foreign commercial borrowings.
Sri Lanka’s foreign borrowings were $42.4 billion by the middle of this year, up from $39.7 billion at the end of last year.


Gulf defense spending ‘to top $110bn by 2023’

Updated 13 min 44 sec ago
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Gulf defense spending ‘to top $110bn by 2023’

  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”