'Interest rates more conducive for borrowers'
Most companies represented here, grew during an era of terrorism over
the past 25 years, which prevented it from showing its true potential.
However, despite such constrains, some companies particularly those in
the apparel sector and also a few others, have proved that they are,
'world class', Industrial Association of Sri Lanka (IASL), Chairman
Nilam Jayasinghe told members at the 23rd Annual General Meeting of the
Excerpts of the speech.
"Everything around us is not perfect and there are some impediments
and it will be so even in the future. But, today, we are free to go
about our business, interest rates are far more conducive to borrowers,
exchange rates are free of sudden volatility, inflation is relatively
stable, infrastructure developments has taken place at a pace that we
haven't witnessed before.
"However, despite all these healthy indicators, private sector credit
growth has seen a sharp decline during the past three years. Private
sector credit growth, which was 34.5% in 2011, declined to 17.6% in 2012
and further declined to 7.5% in 2103.
It is now estimated to be 2% upto June this year. This is not a
healthy trend if we are to aspire reaching those economic targets ahead
It is acknowledged that the contribution to GDP by the services
sector will remain high at nearly 60%, 58.1% to be exact in 2013. The
industrial sector is the second largest contributor to GDP at 31% and
has grown by 9.9% in 2013.
Most of our members represent the factory Industry sub sector that is
the largest contributor to the manufacturing sub sector that has grown
by 7.9% in 2013 and contributes 15% towards GDP. Is this adequate?, he
As in the more developed countries, cannot the contribution from the
factory industry sub sector be increased to 20% of GDP in the next 10
years to enable a more significant contribution? If there is a sound and
clear industrial policy framework and a conducive and investor-friendly
environment this is achievable.
Today, there is a clear need for trained labour and managerial talent
within industry on a day-to-day basis. Sri Lanka's overseas remittances
have become one of the most significant revenue streams for Sri Lanka.
Worker remittances in 2013 amounted to Rs 827 billion, which will
probably increase to Rs 900 billion this year.
In 2013, 293,000 Sri Lankans travelled overseas on employment, an
increase of almost 4% over the past year. When we are in need of
indigenous labour and knowledge at home, can we continue to trade our
knowledge and sweat on a continuous basis?
Cannot we reverse this trend and redeploy the professionals and
workforce in local industries in a more dignified manner in their own
surroundings with minim social costs.
Geographically, Sri Lanka is in a strategic position, equipped with
an able, literate and a trainable workforce.
Our costs are yet not too uncompetitive. With all these positives
that prevail, it is time that we formulate an industrial policy for the
'New Sri Lanka' that will stimulate industrial growth to meet economic
Often, we compare ourselves with the Singapore of the past. In recent
years with increased costs, more industries have moved out of Singapore.
But with limited space and absolutely no natural resources, but a
literate workforce, Singapore has a per capita GDP of almost US $ 55,000
against Sri Lanka's GDP per capita of US $ 3,200.
Apart from the routine functions that are performed by the IASL to
represent and be an advocate of the members. With the assistance of the
committee I will:
* Engage and work with the Ministry of Industry and Commerce and
create a forum that could address the common problems and constrains
that effect all members and others, which are specific to members.
* Review the National Industrial Policy Framework that was developed
by the IASL in 2029 under the Chairmanship of Dr Anura Ekanayake, with
the Institute of Policy Studies and with World Bank financing and
re-present it to the Government through the Ministry of Industry and
Commerce for consideration.
* To improve member engagement and increase membership to 100.
The manufacturing and industrial sector has many challenges ahead of
However, if we are to reap the post-terrorism dividend, let us not
grumble and complain but look at the numerous opportunities that are
ahead of us in reaching a GDP per capita of US $ 7,000 by 2020.
I call upon the government to provide an industry and
investor-friendly environment particularly by enabling a clear direction
and a consistent policy framework."