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| Sunday, 11 April 2004 |
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Business |  |
| News Business Features Editorial
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Business community hails UPFA victory : Quick work - need of the hour by SUREKHA GALAGODA and HIRAN SENEWIRATNE A lot of expectations were aired by the vibrant business community with the United People's Freedom Alliance (UPFA) victory at the April 2 general election and the swearing in of the new Prime Minister Mahinda Rajapakse. The "Sunday Observer" spoke to a cross section of top business personalities, trade chambers and they hoped the new government would buckle down to work immediately, expediting the peace process, resurrecting the economy, eliminating bribery and corruption, employing young professionals in the public sector and also devloping the infrastructure in the long term to attract investment. The Sri Lanka Fruits & Vegetable Producers, Processors and Exporters Association (SLFVPPEA) Chairman Sarath de Silva in welcoming the UPFA victory requested all politicians to increase the export earnings from Rs 3000 million to Rs 6000 m per year. The policies of the UPFA were pro agriculture and pro exports. "During the last two years the farmer community which constitutes 70% of the population was neglected. Removal of the fertilizer subsidy, high cost of production and the increased freight rates led to exporters losing their profit margins which affected the farmers in the long run. Despite large scale manufacturing and industrial growth were good they were time consuming compared to agricultural pursuits which had a production base. " We have the export markets but we lack sufficient production. Therefore if we put our act together we can certainly increase the present rate of earnings and double that amount within six months. This will yield the much needed foreign exchange to the country in double quick time." He said that a change of mindset and financial assistance from the government by way of an export subsidy with the latest modern local agricultural methods, especially water management techniques, would boost agricultural pursuits and make the country flourish. Managing Director Lanka Tiles, Mahendra Jayasekera, said:" I am cautiously optimistic. The UPFA will have to restart the peace process and identify the economic sectors where reforms are necessary while taking a pragmatic view of the policy over agriculture and industry. "I felt the UNF government handled the peace process well given the circumstances, but their economic policy lacked balance.we always thought only a balanced economic policy can develop agriculture and local industry." The JVP which is advocating a more controlled type of economy which may not be very practical, given the requirements we have to meet regarding the donor agencies. "It is the duty of the private sector to work in co-operation with the UPFA government and guide them on the right track , if it warrants so. The Joint Forum of Chambers of Commerce and Industry Employers Organisations and Trade Associations of Sri Lanka (JBIZ) while congratulating the President and the Alliance for obtaining the mandate of the people, wishes to express their support for the government to develop the economy of the country with a consensual approach in formulating and implementing their future policies. According to a statement released by the JBIZ the priority areas of action are the peace process, the economy, bribery and corruption and infrastructure development. " We have no doubt that the President and the new Prime Minister will take early steps to revive the peace talks with the LTTE and attempt to ensure that progress is made towards achieving peace which is acceptable to all citizens of the country." The JBIZ is of the view that an economic policy based on export led growth and a plan for the development of the country during the next six years should be formulated with targets established for each year and an independent monitoring mechanism to ensure that the ministers and others responsible achieve these targets as planned. Immediate steps should be taken to appoint the third member to the bribery commission and the commission strengthened and activated to inquire into all allegations of bribery and corruption against individuals irrespective of the party to which they belong. The release further states that early steps should be taken to expedite the Southern highway, Colombo Katunayake highway and Colombo Kandy highway. An early decision regarding the coal power plant should be made to enable the plant to be commissioned within the next five years. Steps should also be taken to initiate action on development of the South port of Colombo and the Port of Hambantota. All domestic airports should be rehabilitated and opened for internal air travel for tourist traffic and others who require domestic air service. The entire road network system including the railways should be rehabilitated and strengthened. JBIZ is of the view that the private sector has a very important and vital role to play in all aspects of the development of the country, not merely restricted to the development of their own businesses. The JBIZ looks forward to establishing a strong private sector government relationship which will be beneficial to the country as a whole. Sri Lanka Foundation for Development of Small and Medium Industries (SMI Foundation) while welcoming the assurance given by the UPFA to strengthen the local agricultural and SMI sectors requests that top priority be given to adopting a suitable import policy for the country. The Foundation suggests that until such time a properly prepared import policy is adopted to restore the status quo which prevailed in the year 2001 when the PA got defeated. At that time a 40% import duty surcharge was in place. Most of the essential consumer products, industrial raw materials which were not produced locally and production machinery were allowed to be imported duty free. Although these measures would have resulted in a substantial revival of the local industrial sector, the then government did not survive for long to see it happening. The reintroduction of the 40% surcharge would not only be a strong revenue source for the government but would also act as a deterrent to the free flow of imported goods at very low prices. A well laid out Industrial development programme and a national industrial policy should be introduced as a long term measure. Starting work immediately is very important since the economy which suffered immensely due to the non existence of a stable government during the past few months would suffer further unless immediate action is taken. Chairman Ceylon National Chamber of Industries (CNCI) Ranjith Hettiarachchi said the "UPFA has a major responsibility as people have shown maturity. Therefore the government must have a definite program and show results. The government should start working immediately, with a concentrated, focused development plan for each ministry. People are not expecting the government to perform a miracle overnight but they would want a direction with specific plans and schedules, he added. Singapore Informatics Deputy Chairman Prof.Lakshman R.Watawala said the new government should give more prominence for the country's infrastructure development to attract foreign direct investments. He said the government should play a catalytic role as a policy maker and leave the private sector to implement all economic activities. The private sector, being the engine of growth in this country, should work closely with the government to achieve set goals, Watawala said. Creating an investor friendly economy to generate employment opportunities for the country should be top of the agenda for any government that is in power. Meanwhile the public sector bodies should be strengthened such as BOI, Export Development Board, by appointing young full time professionals to enhance the efficiency level to serve the private sector, which is considered to be an utmost importance at this scenario, he said. Serendib Freight Services CEO M.S.M. Niyas requests the government to appoint professionals for the commercial public sector to enhance efficiency and productivity in the business sector. He emphasised the new government to stick to its election pledges and implement its manifesto in a more business friendly manner . Confifi hotel group Managing Director Stefan Furkhan said that the prime task of the new government was to create political stability in the country. He said that managing the economy more friendly towards investors , would be the most important factor to attract direct foreign investors to the country. He said that the new government should resume peace talks, as soon as possible, as a lot of scepticism had been developed within the industry. "The tourist industry to flourish peace and harmony within the country is the need of the hour," he said . Good governance and proper maintaintace of fiscal dicipine should be given top priority at this juncture, he said. The Ceylon Chamber of Commerce (CCC) congratulate the Elections Commissioner and all those associated with him including the Police and armed forces, all political parties, election monitors and the public for conducting a free and fair election almost devoid of violence. By all accounts this election was the most peaceful in recent times and we take this as an indication of a political process that is reaching maturity. The CCC as the senior most Chamber in Sri Lanka, has over its 165 years of continued service, maintained an apolitical stance. It is therefore our duty and responsibility to extend to Her Excellency The President and the new Prime Minister and the UPFA Government our unstinted support in their endeavours. The Ceylon Chamber will fail in its duty if it does not recognise the positive measures taken by the previous government to find a settlement to the ethnic conflict and to instil fiscal discipline and strengthen macro economic fundamentals during the period of their stewardship. The work of the new Government must now begin and we wish to put forward the following priorities for its consideration. These priorities are based on our belief that an appropriate Public - Private partnership with clearly defined roles for each is essential if the aspirations of the Sri Lankan people are to be met. It is the position of the CCC that the Government must focus on the security of the nation, law & order, health, education and an appropriate policy framework to ensure the competitiveness of local industry and services and to achieve an equitable distribution of wealth across the nation whilst leaving economic activity in the hands of the private sector. A lasting peace is the country's first priority. Without peace Sri Lanka will not attract the levels of investment it needs for accelerated growth leading to full and gainful employment. Urgent steps must, therefore, be taken to defuse the current tension between religious groups, lest it gets out of hand and escalates into an ethnic conflict. Accelerated economic growth is the country's second priority. Next to a lasting peace, the most pressing issue impacting economic activity is the supply of uninterrupted power at reasonable rates. This is not a new phenomenon but unfortunately little attention has been paid by successive governments to this pressing issue. We trust the new government will act quickly to forestall a possible power shortage in the not too distant future. Development of other areas of infrastructure is crucial to improving Sri Lanka's competitiveness. Highways linking the major cities of Sri Lanka, the development of the Hambantota Port, and adequate health care and schooling facilities outside Colombo are pre-requisites to make areas outside the capital attractive locations for investment and business activity. Extending economic development to different parts of the country should be a cornerstone of policy. Rapid economic growth will help reduce unemployment, this is Sri Lanka's third priority. Indeed, the country must strive for full and gainful employment. In this context, a modern education system that will meet the requirements of an increasingly competitive knowledge based global village is critical. Sri Lanka being a small economy, growth must necessarily be export driven. Thus policies that enhance the competitiveness of our export businesses would be welcome as would be the quick finalisation of the FTA with the USA, ideally before the possible negative fallout from expiry of the Multi Fibre Agreement (MFA) in 2005. Fiscal discipline is the country's fourth priority. A low budget deficit leading to manageable levels of public debt and a low interest rate regime are essential if Sri Lanka's economy is to move forward. We are therefore concerned with the proposals to expand the public sector and to extend the role of the state in commercial activities. Both of these are a step backwards and we urge the government to re-consider these proposals in the best interest of the Country. Strengthening democracy via an institutionalised framework is the fifth priority facing Sri Lanka. The recently concluded elections have demonstrated the effectiveness of the Elections Commissioner and the Police Force now that they have been given wider institutionalised powers. This mechanism must be extended to cover other areas as well as was intended by the 19th Constitutional Amendment. Further, in order to strengthen democracy within the country we believe that the state media at the very least be run independently under an institutionalised framework that prevents political interference. Maintaining law and order, eliminating bribery & corruption and the practice of Good Governance, eliminating barriers to trade and investment, reducing transaction time and cost and improving the enforceability of contracts are essential to enhance the competitiveness of Sri Lanka. Economic development will be accelerated only if we as a country become competitive in the global market. We believe that these priorities cannot be met unless the different segments of Sri Lankan society come together in the best interest of the nation. Indeed a strong public - private partnership is of vital importance at this juncture and the new Government can rest assured of our fullest co-operation and assistance in guiding Sri Lanka and her people towards peace and prosperity in the coming years. Leading Marketer Rohantha Athukorala said that it is incumbent upon the new government to identify global market forces such as tourist industry, to exploit the opportunities. |
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