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| Sunday, 10 February 2002 |
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"Deregulation will increase growth and investment" by SUREKHA GALAGODA The objective of the Deregulation Committee is not removing regulations, but fine-tuning them by removing the regulations that impede investments and introducing new and simple regulations and procedures, Dr Bandula Perera, Chairman of the Committee said recently. Addressing a news conference held to announce a workshop on deregulation, he said: "Our recommendation is not just removal of regulations, but we want to find a better, cost effective solution which simplifies procedures". He said that about 13 per cent of capital costs and 30 per cent of profits are lost due to impediments in the regulatory framework. For example, a person who wants to get state land to set up a factory, has to go to 20 different government organisations while around 2000 regulations govern the tea trade. Dr Perera said that many regulations imposed years ago are still in force despite their incompatibility. Therefore, Sri Lanka is in an unfavourable position when competing with countries that have gone through the process of de-regulation. He said the vision of the Deregulation Committee is to position Sri Lanka for an increased inflow of investments, thereby improving the country's competitiveness. He said a key ingredient for increasing competitiveness is de-regulation as it removes the impediments that hamper economic activities. Therefore, deregulation is an urgent need to improve the country's position in the world market and to increase economic growth. "Sri Lanka has accumulated too many regulations over the years, but in most instances, they are not useful and hinder development rather than improve it," Dr Perera said. He said regulations impede business decisions by blocking entry into the market, controlling internal business decisions, and increasing transaction costs. "Some regulations block the entry of newcomers to economic activities such as telecommunications, electricity and gas industries, giving monopoly status to existing suppliers." Price control in the case of electricity and passenger transport is another way of impeding business progress. There are numerous other regulations which define cumbersome procedures to follow and licensing and permissions to be obtained before starting businesses, causing regulatory delays. He said that it is the start of a long process. "Therefore, we will identify the easy things, then it will be much easy to tackle the difficult tasks." The two-day residential workshop on deregulation will be held on February 16-17 at Club Palm Bay Hotel, Marawila. The keynote address will be delivered by Enterprise Development, Industrial Policy and Investment Promotion and Constitutional Affairs Minister Professor G.L. Peiris. Industrial Development Minister Rohitha Bogollagama will also address the gathering. Senior Resident Representative of the International Monetary Fund (IMF) Dr Nadeem Ul Haque will speak on 'The need for deregulation in Sri Lanka and the international scenario on de-regulation'. The session on international comparison on selected countries will be chaired by Chairman, Ceylon Chamber of Commerce Chandra Jayaratne. The presenter is Mahendra Amarasuriya, who has authored the paper with Michael De Zoysa. The countries selected for comparison are Dubai, Singapore, Hong Kong and Mauritius. Impediments to business progress and transaction cost is the theme for the second presentation. The joint presenters are Dr Anura Ekanayake and John R. Cooney, Asian Development Bank's (ADB) Resident Representative in Sri Lanka while the authors are Dr Sunil Chandrasiri and Dr Athula Ranasinghe. The presentation titled 'Impediments to donor programmes' will be presented by the author, John R. Cooney. The session on taxation will be chaired by Dr Saman Kelegama while the presentation will be done by N.R. Gajendran. The authors of the paper are D.D.M. Waidyasekera and N.R. Gajendran. The presenter on Customs and ports is Lyn Fernando while the paper has been developed by himself, Elmo de Silva and H.D.S. Premachandra. The session will be chaired by Lakshman Watawala. The session 'Deregulation in the energy sector' will be presented by Dr Tilak Siyambalapitiya who has authored the paper with Noel Selvanayagam. It will be chaired by Selvanayagam himself. The next day's morning session has been dedicated to deregulation of the tea sector. The presenter and author is Michael De Zoysa while the session will be chaired by Ranel T. Wijesinghe. There will be sub-group meetings and presentations and the workshop will be concluded by the Chairman of the Deregulation Committee Dr Bandula Perera. He will give a summary and the follow-up action to be taken. A member of the Committee Cubby Wijetunge said that after the workshop, "We will request the government to adhere to a time frame to remove the cumbersome regulations." He said that the government is aware that corrective action is needed. Therefore, some of the issues will be addressed in the forthcoming budget of the UNF government. "We will give advice on deregulation for the betterment of the people and to increase growth and investment for Sri Lanka'', he added. The workshop is organised by the Permanent Committee appointed by the Advisory Council for the Ministry of Enterprise Development, Industrial Policy and Investment Promotion. It is supported by the IMF, World Bank, ADB and USAID. The programme is supported by the Ministries of Finance, Economic Reforms, Employment and Labour. |
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