Sri Lanka jewellers hope to benefit from easier regulations

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(Srilankamirrror) – Sri Lanka’s gem and jewellery industry is expecting to improve their competitiveness in international markets after new customs procedures were promised which will cut delays and costs.

Sri Lanka’s customs authorities and the National Gem And Jewellery Authority, a state agency had come up with a simplified procedure to clear imported raw material for the industry.

Macky Hashim, chairman of the Sri Lanka Gem and Jewellery Association, had thanked director general of customs Neville Goonawardena and Prasad Galhena, chairman of the Gem and Jewellery authority for easing procedures, a statement said.

Exporters and importers gem and jewelry will have a special customs office at Sri Lanka’s main international airport to process consignments.

Consignments would be placed in a secure pouch and released to the importer within three working days at the National Gems and Jewellery Colombo office for inspection and release.

“Both clearances procedures will be allocated to those dealers who obtain foreign exchange as per the 2012 Budget proposal to procure gems from other producing countries,” an industry statement said.

“The major outcome of these decisions will be to increase the global competitiveness of this burgeoning sector with a resultant increase in foreign exchange earnings and the generation of new job opportunities.”

Sri Lanka has ‘shortages’ of foreign exchange ever since a money printing Central Bank with an unstable ‘soft-peg’ was set up in 1951 abolishing a ‘hard peg’ or currency board.

Under a currency board the interest rate floats according to credit demand and the exchange rate is fixed.

A central bank on the other hand prints money to fix an exchange rate and runs into ‘foreign exchange shortages’ when it tries to fix the exchange rate.

Sri Lanka is now in the middle of another bout of currency trouble after interest rates were manipulated down from the second half of 2011 with printed money, after credit demand spiked from loans taken by state energy utilities to manipulate prices.

Last year Sri Lanka had exported 520 million US dollars worth of exports, up 29 percent from 400 million US dollars in 2010. Up to April 2012, 183 million US dollars of gem and jewellery exports had taken place.

(LBO)