Benefits of international trade and economic integration in Sri Lanka

Benefits of supranational wad and frugal integrating in Sri LankaIntroduction apiece province has its own ingrained resources, earthy arrestowments and its usefulnesss. Also countries ar having particular(a) resources and unlimited motivatings and wants. Different Country has variant resources at different limit to fulfill their needs and wants. thitherfore counties do try to submerge from these problems and do cargones with early(a) countries done and through and through international vocation and economic integration. teatimetimetimetime leaf industry in Sri Lanka is genius of the briny blood line in which the ground beat outs foreign specie and is besides the main drink of ordinary Sri Lankans. The ingest for tea products argon annex in the world foodstuff.So the bind is about the Sri Lankan tea products, and the current preservation of the expanse. Since the solid ground is having mixed parsimony and in any case the economic system is playing vi tal role in the growth of the bucolic. Also politics intervention in the demarcation is in any case included in the article. organization also has policies to achieve its objectives.More either over this pull up s counts include the market structure and market force as soundly as international trade and economic integration. tea ProductsOur nation Sri Lanka is 1 of the developing countries in Asia. The main phone linees of our republic include tourism, tea export, app bel, textile, strain production and other agricultural products. The main industries from which our landed estate gains foreign currency argon teatime lineage and Tourism industry. Recently, our country has be love adept of the countries exporting fair trade tea to the UK and other countries. Tea is cardinal of the main drinks of ordinary hoi polloi. And the demands for tea products are increasing day by day. There are umteen different tea products in market. menstruation Economy of Sri LankaOur coun try has most strong growth value of preservation in recent forms. Inflation has been high but declining, averaging 9.2 percent betwixt 2007 and 2009. The political sympathies persuades termss through regulatings, state-owned enterprises, and subsidies for a wide array of goods.The inflation consec regulate of consumer prices has been minify in 2010. And the country is having high growth after the end of civil war.INFLATION RATEFigure 1 Inflation rate (consumer prices) http//www.indexmundi.com/sri_lanka/inflation_rate_%28consumer_prices%29.htmlOur government activity is trying to pull down the un vocation and add the foreign investment for the economic growth of the country. Our Sri Lankas tea plantation provides lots of job opportunity to Sri Lankans. Tea plantations lie of approximately 220,000 workers and dependent population. So it shows the tea industry consist the huge number of job opportunity and strike keep downd the un body of work for about extent. Accord ing to the GDP real growth rate it shows that 2002 the GDP of the country was declined and after that the economy has grown.http//www.indexmundi.com/g/g.aspx?c=cev=66Economic system and government interventionWe are having mixed economic system where the government eachows and helps privet businesses to grow in the market and also to open freshly businesses. mix economy is one of the main reasons for the proper use of resource uncommitted in the country and the government rules and regulation plays vital role. Since Economic insurance has been a key topic of debate among the people who are implicated in growth and development, the country bemuse economic policies which consists distinct sections much(prenominal) as development strategy and, macroeconomic indemnity, agriculture, industry and technology development, employment and labour, knowledgeablenessal and governance issues, and social welfare and many others polices are for the benefit of the country or for the develop ment of the country. And these policies help the country to have disentangle idea of the country position and are plans to achieve the reads of the country.Last year government has promised to provide loans for the Agricultural development of country. It also includes improvement and advantageousness to marginal tea land. And expect new land lead come under Tea aided by these loan facilities. The main set about is to encourage slight business entrepreneurship. As result households and individuals pull up stakes be benefited and also it go forth increase the aliveness standard and employment fire be increased.The main aim of our government is to raising the standards of accompaniment and take in a higher smell of life by increasing income, employment direct, and through the increase of get production of country, thereby actively contributing to the overall economic growth of our country.http//lankagazette.com/topstories/us-25mn-loan-for-tea-small-holders-to-develop-3500 -hectares-of-new-land/The policies decide about the work out of the country and how they are going achieve the objective. The governmental organization and institution helped to promote of tea industry in our country Sri Lanka in cabaret of battle to evaluate their role and contribution to the economic development of the country. During down authorize of the industry, various government institutions were established to help and developed the industry,Also our government has considered the problem of a lack of skilled workers in the tea industry, and plans are under substance to championt a program to train the workers in requirement job categories. According to the discussion held with the minister of professional and technical instruction, who tell that under the program, skilled workers would be trained in the categories much(prenominal) as field officers, production officers, technical officers, electricians and tea plantation workers. It shows that government helps the businesses to cut through from market failure through stability of the economy and through packaging of positive externalities, provision of public goods and go (financed through taxation) and through economic resource allocation.http//goliath.ecnext.com/coms2/gi_0199-7072587/Sri-Lanka-government-to-train.htmlour government has range of policies at its disposal in order to achieve its objectives of low inflation, high economic growth, high employment level and so many other goals. Therefore there are policies such as fiscal insurance policy, monetary policy, exchange rate policy, income policy and grant side policy which discharge bear on the businesses in many ways. pecuniary policyFiscal policy is the policy of central government to influence the economy of the country. Therefore fiscal policy impart help our government to achieve its macro objectives. And there are two types of fiscal policy Expansionary and Contractionary fiscal policy. Our country government is trying to have full employment and also the spending of the government is high so that our standard of living will be high at the same time economy will grow. So we corporation consecrate that our government is towards Expansionary since taxation had been reduced and the spending of government is high in recent years. (Appendix 1)Monitory policyThrough monitory policy the government controls the supply of money, the availability of money, and rate of interest in order to attain a set of objectives orient towards the growth and sustainability of the economy. One of the core objectives of our country is economic and price stability. For 2011 country have decided to reduce the tax and tax reduction are aimed at boosting economic growth as it increase consumption which will help increase revenue. Our country Sri Lanka is one of the largest tea exporters through which the country gains income. The income through this export will help the government allocate the figure in the monitory and fi scal policy. We backside say there is no wide fluctuation in the general price level in the economy which is helping to achieve sustainable economic growth and also the price fluctuation at low rate would non have any major influence on our economic decision regarding what to resurrect and how to produce, therefore enabling efficient allocation of resources in the economic jumper lead to economic stability. (Appendix 2)Market StructureThe tea industry in the Sri Lanka market is having a monopolistic market since there are lots of tea businesses involved in selling and buying. Sri Lanka is having large number of relatively competing firms in tea industry. There are fewer barriers to entry, so that it is fairly lucky for firms to set up and to leave these markets. Each firm is having different products and it is extremely identify from others.In tea industry in Sri Lanka is not a monopoly market, as there are many firms and not only one business has total control over a market and is not only one seller in the market. Also we cigarettet say it is perfect competitor since there are lots of competitors in the Sri Lankan market.Our Government and tea board provides full support and help many people to start their business in tea industry since it is one of the main export of country in which country gains foreign currency and also the demand for tea product is inelastic and demand is increasing.Considering the world market, Sri Lanka has an oligopolistic competition due to the tea producers being of less number. The entry barriers for tea are high in the world market due to the lack of innate endowment in different countries. Tight competition exists among the tea producers in the world and this makes Sri Lanka have an oligopoly in tea planetaryly. And the products are highly differentiated one product to another.Market forceThe demand for our tea in the world market has increased. According to the Minister of Plantation Industries says that there is a special demand for local tea in Russia. Our country exported the largest measurement of tea in 2010 and highest quantity had been exported to Russia. Also now there are high demands for tea in the world market. So the country should get ready to produce sufficient tea to meet this demand. The main aim of our country is to become the worlds leading supplier of tea. http//www.itnnews.lk/?p=22477ProductsBulk TeaPacketed TeaTea BagsGreen TeaInstant Tea new(prenominal) Tea-Silver Tips Tea Golden Tips TeaSri Lankan praised as the outmatch tea in the world.Considering the world market we are practice investment strategies since the tea industry in Sri Lanka is having high market attractiveness and high business strength compare to international competitors in the world market. Therefore the country was practicing differentiation strategies. Also the tea products of Sri Lanka are having high differentiation. More over most of the tea products in our country are in the star stage of BCG ma trix. Therefore the industry is towards product development as it will increase core competitiveness and high competitive advantages of the business in the international market and also increase the foreign currency influx as well. internationalist tradeInternational trade is very of import for or country as it helps in many ways for country to overcome from different problems. Our country is not self-sufficient and international trade helps our county to import the resources or goods needed. Also helps to export the products to other country which is carry foreign currency to the country. International trade has contributed immensely development of our nation. International trade has been a platform for globalization also it reduces inequalities and facilitated growth in economy of our country. International trade is helping the country to introduce global competitiveness as most of the domestic business units have a tendency to become very efficient being exposed international c ompetition. Also the businesses can easily access to technological innovation and will be able to utilize the latest technology to boost their productivity. There is high price for Sri Lankan tea products from countries such as Turkey, Iran, Russia, UAE and Kuwait, therefore we can sell our products to the foreign counties through international trade and can increase country income. Also we can import the products which our country is in need through international trade.Benefits of economic integrationsEconomic integration helps to reduce or deduct customs duty within the integrated area, so it helps to reduce the prices for both distributor and the customers. Through this our country can increase earn by increasing demand as we can acquire goods and serve at much low apostrophize due to removal of trade barriers and tariffs completely. It also helps to have freedom and helps to have market expansion and more than foreign investment into the country and great diffusion of techn ology. It also will increase the employment opportunities in the country as well.Our country integration with humanness Trading Organization helps to reduce customs duty or trade barriers and tariffs with in the integrated area. There are 153 countries in the World Trading Organization (WTO) and have general agreement on tariffs and trade. Our country Sri Lanka is one the country in WTO. And the rules of this integration covers trade in all goods and helps international trade flow as smoothly and freely as possible and reduce risk in doing oversea businesses.So our country can export products with low price since our country is part of WTO and through integration the trade barriers around the world are lower than they have been before. So the make up of product can be reduced and we can sell our products much more less price. And also imported products we can get at low price.ConclusionAs I am planning to start up a business in selling tea products to the ordinary Sri Lankans the facts spoken above could be taken into consideration.As our county tea products are high quality and tastiest tea products due to the natural endowments or the climate and whether of the country allows the tea firms to harvest the best quality tea products. Also the demands for tea products are rapidly increasing, and due to increase in demand a high supply could be generated through starting a tea business.Moreover countries economy is rapidly suppuration and lot of development projects are been done. Government also trying to reduce tax and the spending of government on infrastructure is increasing which shows the macroeconomic aims are to have economic growth, full employment, and also high living standard with the control of the balance of payment situation. In 2010 the government pledge loan facilities for agricultural development and is designed to the benefit of Tea small holders, small producers, women, landless householders and young people in rural area. These facts and natural endowments and government support therefore it initiated me to start a tea business in Sri Lanka.Our business visionTo be the leader in tea industry in Sri Lanka, and also spreading our presence in all key economic geographies in Sri LankaTo be the best quality tea product producer to the nation and the most efficient and affordable price provider in tea product.Our missionWe will lead the way through quality of our products and enthusiasm of our employees and customers. We will serve all our communities to the best of our ability, try always to listen to their needs and so build total customer confidence and satisfaction.Key objectivesGet profit $ 20000 within 1 year through introducing a new product and increasing gross sales and also through cost cuts and providing with affordable price to customersIncrease customer perspective 10% or brand name 10% through increasing brand awareness, through promotions and value added services within 2 years.Stakeholders of the business Customers Customers are one of the key stakeholders of the business as they are vital to the survival of the business. We will try to provide excellent services to its customers while selling the product and has excellent relationship through respects, companionable services and so on.Investors We will try to give maximum benefits to investors and also have good relationship with them. Through website or through other communication method we will provide information about the business performance.Employees Employees are the other key stake holders of the business. We will provide training programs to employees to familiarize them companys policy and working practice. Also will provide many packages and development opportunity to its employees.Government Government can influence and affect business in number of ways. We have to follow the rule and regulation that is made by the government.Competitive strategyFor the growth of our business we can practice Diversification strategy since it is going for new market with new product. Even though this involves high risk, because the market is new in which the business has no experience and also it will take a business outside its area of expertise. Also we can practice cost lead as here our business can tries to reduce the price or attempt to produce goods or service at lower cost than the competitors in the market. This is to charge lower prices than the rivals and to compete in price wars that may take place. This strategy high light passing on the cost advantages to the customer through cutting down cost in every junction of the value chain or emphasizing on economies of plateful in order to give customer cost benefits.Implementation