Signing CEPA, an unwise move - COYLE

by Rohana Jayalal

Certain Sri Lankan officials who engaged in discussions with India regarding the Comprehensive Economic Partnership Agreement (CEPA), are openly supporting Indian views, while turning a blind eye to concerns raised by Sri Lankan entrepreneurs, Chamber of Young Lanka Entrepreneurs (COYLE) member and Chairman, Multichemi Group of Companies, Samantha Kumarasinghe told an event in Colombo on Thursday.

“If the Government has agreed to sign the agreement, we think they’re either misled or making an unwise decision,” he said.

COYLE also called for a tightening of regulations in relation to foreign investments and calls on the future Government to take steps to ensure the protection of all local entrepreneurs including SMEs.

There was ample evidence to show that CEPA was not beneficial to Sri Lanka, he said, referring to media speculation about the signing of the controversial agreement following a recent economic summit.

“This particular economic summit was conducted by one of the Chambers which comprised many foreign businesses. They may have an interest in it but really we don’t know if it was the view of the Government,” he said.

“If any Government in the future tries to sign the agreement, we will do our best to oppose it. CEPA is an agreement that has been carefully and shrewdly drafted by India and forced on us,” Kumarasinghe said.

A strong economy needs the strengthening of entrepreneurs. SMEs contribute about 75-80 percent of the country’s economy.

SMEs are centred around an entrepreneur, whose contribution to the economy is evident, COYLE Member and Chairman, Epic Technology Group, Nayana Dehigama said. Citing an example, he queried as to what would happen if a billion dollar Indian company launched operations here without any taxes? What would happen to Sri Lankan companies in the same trade? They could dump products for a couple of years forcing the local companies to fold up. Thereafter they could increase prices.

The entrepreneur community is the driving force behind this country. Everything should not be given on a platter. “Although there are policies in place to protect local entrepreneurs there are loopholes. Please address them. Do something to close the loopholes,” Dehigama said.

COYLE will inform President Maithripala Sirisena and the next Government to be appointed following the parliamentary elections, of the problems faced by local entrepreneurs who have the capacity to develop the country economically.“We are not against foreigners investing in Sri Lanka. In fact, we welcome foreign investment, but the Government should take measures to safeguard local entrepreneurs,” he said.

Dehigama emphasised the need to introduce restrictions on foreign ownership in all businesses to a maximum of 49 percent, other than BOI export oriented industries within the Free Trade Zones. The rule of 51 percent ownership by local entrepreneurs should be strictly enforced in value-added businesses using natural resources such as mineral sands, water, gems, oil and gas.

Retail trade should also be reserved only for Sri Lankan entrepreneurs and foreigners should not be allowed to enter this trade even through the Securities Exchange, the Chamber said, adding that the new Government must maintain import taxes at zero level on advanced high tech machinery and raw materials not produced in Sri Lanka, he said. “The number of unemployed engineers in India is close to half a million. When we have 6,000-15,000 engineers graduating from our universities and if we don’t provide them with jobs, there will be youth unrest. If there are no employment opportunities for Sri Lankan youth, they will start rioting,” Dehigama said.

Coyle member and Chairman. KIK Lanka, Lalith Kahatapitiya criticised the rumoured move, implying that it could pave the way for an employment crisis.

Kahatapitiya called for Parliament approval before signing bilateral agreements. “If everyone agrees, then by all means sign. But don’t grant decision-making powers to a few people and create a situation where a handful of people decide the future of the country.”

COYLE seeks assurances from the future Government on, inter alia the implementation of international standards on all imports including strict legislation with regard to dumping, product standards and labeling, child labour and environmental standards, Kahatapitiya said

He said that the BOI should be completely restructured to be on a par with rapidly developing free trade zones in the Middle East and Vietnam.

Similar to the autonomy granted to public services through the setting up of the independent Public Service Commission, the Government should set up an independent Public Enterprise Commission to appoint chairmen and boards of directors, and ensure that those appointed are independent and strictly comply with regulation and best practices in doing business, he said