Lanka should not depend on subsidies to develop markets - Dr. P B Jayasundera

"The biggest obstacle to our development, terrorism, is over. In the post-terrorism era, the biggest beneficiary is the private sector. And today's challenges are different. New challenges are wage rate hikes, worker unrest and even lack of workers. We will not ask for GSP. We should not grow markets on the basis of subsidies. Then the country will become vulnerable," said Finance and Planning Ministry Secretary, Dr P B Jayasundera, at a forum on 'Government Strategy for Industrial Development of Sri Lanka' at the Industry and Commerce Ministry in Kollupitiya.

Finance and Planning Ministry Secretary, Dr P B Jayasundera addresses the gathering. Minister of Industry and Commerce Rishad Bathiudeen looks on

Ninety-five leading exporters, businessmen and industrialists, Industry and Commerce Minister Rishad Bathiudeen, Ministry Secretary Anura Siriwardena and top officials of the Ministry were present.

"Under the vision of President Mahinda Rajapaksa, you have got a bonus. He took a policy decision to rationalise tax. On the other hand, I ask exporters, if you can't pay 12% export tax, then why export? Our taxes for SMEs and the tourism sector is 12%. You need to get your (export) products in good shape and make Sri Lanka the wonder of Asia," Jayasundera said.

"The government is criticised by many people with regard to recent policy decisions but we took painful decisions and kept a balance in the economic system.

"Our economy is strong. We can raise money by a mere phone call. The Bank of Ceylon raised $ 500 million at short notice. And the Central Bank has done a first class job with the Rupee. For the fourth consecutive year, we have a declining budget deficit, the last being 5.8%, Dr Jayasundera said.

"The long term indication of this trend is that more 'good money' will come your way. And I am optimistic about how Sri Lanka's environment will turn out.

But I am not in favour of a change in rates of taxable computed profits. Taxes should be paid. Please help us to protect this tax regime as the government needs money to provide facilities. Countries will prosper, if tax rates prosper, and country will slide, if taxes fall," he said.

"More improvements are needed in the Doing Business Index. We have to look for new markets. Don't worry about competing. First, ask for unrestricted market access from trade partners. When we met the Chinese we showed them our list of products, that is all.

China has responded to us positively. We need to give a Sri Lanka a brand identity, under the Mahinda Chinthana. This is the vision that we all should share," Jayasundera said.

"You can continue to talk theories on exports and on export competitiveness. But as practitioners, you should understand that exports need not always be aimed only at lucrative markets. For example, there is a food import need in several African countries through the UN or WHO due to famine."

"I believe that we need to deepen our economic ties with India and Pakistan. These two markets provide unlimited potential if you are ready," he said. "Unless you overcome your productivity problems, you cannot overcome new challenges.

Industrialists must objectively debate as to how labour markets work. We cannot stop brain drain because it is an individual freedom of choice. I blame our Chambers for this.

They need to educate the industries but this is not happening," Jayasundera said.

"I am agreeable to royalty payments on brand promotions. I shall recommend this to the President so that it could included in the next Budget. Take a long term view of the products you manufacture, rather than a stop and go method, which will lead our country to become an assembly plant," he said.