* Long-term policies to revive the economy
* More opportunities for youth
* More funds for research and development
Sri Lanka needs to improve industrialisation for better economic gains. The long term policy framework in the three main sectors of the economy viz: agriculture, services and industry, will have far reaching benefits. There should be policy consistency and strong push for exports, President Federation of Chamber of Commerce and Industry Sri Lanka (FCCISL) Ruwan Edirisinghe said.
The way forward for the country is to export knowledge and attract more FDIs, he said in an interview with the Business Observer.
However, he said that the quality of politicians should be improved to enable them to govern the country in a better manner.
Edirisinghe is also the President of the SAARC Chamber of Commerce and Industry and Chairman of Ceylon National Chamber of Industries Sri Lanka.
Excerpts:
Q. The FCCISL had been one of the key chambers promoting the trade and industrial sectors in the country. However, it has not been very prominent over the past few years.
a). What is the reason?
b). How do you plan a more critical role in promoting trade and industry this year?
A. I do not agree with this statement. The FCCISL has been engaged in many activities during past years. The establishment is the focal point of chambers. The FCCISL represents the whole cross section of the Sri Lankan business community. Sixty-three national and regional chambers from Colombo to Batticaloa come under our membership. The 17 national level business chambers in the Federation have rendered enormous service to the country.
We are improving our local relationship. Sri Lanka is a founder member of the SAARC Chamber of Commerce and Industries. We have a greater exposure with the Asia Pacific Trade Agreement (APTA) with seven countries, including China, South Korea, Bangladesh, Laos and Mongolia where the President designated is from Sri Lanka. Our connectivity is also high. We focus on new areas in expanding businesses locally and internationally.
Q. What are your thrust areas?
A. The Federation is at the pinnacle of all the regional and national chambers of the country. All trade and business are broad-based from micro to extra large categories with over 25,000 membership. We promote recognition through the flagship event, the entrepreneur of the year award program, and provide training to members through the Australian Aid hospitality industry related program.
We are working with China closely through the Sri Lanka-China Business Forum which will be held on June 12 in the Kunming city. Prime Minister Ranil Wickremesinghe will be the chief guest.
Q. Policy inconsistency has been an issue over the years. A majority of the business community has highlighted this over the years. What is the solution?
A. I completely agree with the statement. Sri Lanka does not have policy consistency. This is unfortunate. The policies of the government, especially, with regard to the industries are not consistent. The economy should be guided by consistent policies.
I have seen in my 22-year business career that our policies are changing from government to government. The 225 Parliament members are biased towards their political parties.
Parliamentarians take decisions on policies for the country. We as business leaders are not biased towards any political party, but contribute to develop the economy. The country ended the three-decade war against terrorism and established peace. We have launched projects from Jaffna to Hambantota.
What Sri Lanka gained economically after the war is marginal. Political leaders are looking at their future, not the country.
I urge people to be careful when electing members to Parliament and provincial councils. It is time to give opportunities to professionals and public servants to use their knowledge for the betterment of the country.
I am an engineer by profession. There should be a system where 25 percent of ministerial portfolios can be allocated for those who are qualified. The rest also should be given to educated and capable people. The national list should be used for professionals.
About 20 years ago, Sri Lanka’s export value was US $ 2 billion, and Bangladesh and Vietnam were at the same level.
Export values of Bangladesh and Vietnam have exceeded $ 32 billion and $ 214 billion today. Twenty-five ministers in Vietnam have a strong focus on national policies. The government allows local businesses to excel and explore the world. They encourage more FDI.
The tax and duty structure should remain for at least 15 years. The country cannot be developed without an industrial focus and national policies. Sri Lanka should adopt consistent national policies and should review development after 10 years. The geographical location and educated workforce should be taken in to account. The production cost is a key to investors.
Q. What is the trend in young people getting in to the business world?
A. The trend is there in Sri Lanka that young people getting in to business. The opportunity is the problem. . We have a free education system in the country. The government is supporting the whole population in the education and health spheres. There is no country that is giving all these facilities to people. These are positive initiatives. The government has given a lot of employment in the public sector which is 100 percent more.
We urge the government not to give employment on political basis, but consider capabilities. The scope in lot of young people seeking business opportunities is enormous. Anything is reachable to anyone through a mobile. They are good at IT to find opportunities and improve business. The more you are educated the more opportunities are there. The young generation is more dynamic and looking at every opportunity. The government should provide opportunities within the country for the young generation in giving back to the country for what they gain from free education and health.
We do not have to export cheap labour. We should sell our knowledge at a higher rate. Unfortunately today our politicians are talking high about exporting mothers and sisters forcing the next generation in to disaster as there is no proper guidance and protection for the children of migrant worker families.
This is not worth as their remittances are accompanied with more socio-economic burden. The economic contribution and output of the young generation, especially the children of these families is less. There are 1.2 million trishaws which blocks about 2 million young working class in this country which is accounted for 20 percent of the workforce.
There contribution to the country is negligible. This is a disastrous situation. A training and development of young people using government institutions is vital so that the next generation will end-up with professional career and social standards will go up and the middle class of Sri Lanka could be developed. If these measures are not taken , Sri Lanka will have to import people with special skills from South Asian countries. We need to re-look at the young generation coming out from the education system.
There are bottle necks to address. However, the 13 year compulsory education is a boost to the country’s economic development.
This should not stop at this and should be give other services such as training focusing a job. If there is an excess in trained people they could go out of the country. The young entrepreneurs who like to create jobs will have a better opportunity. The government should have a national policy for the next 15 years focused on subsidies until they are employed and have stable business. This will definitely support social economic development of the country
Q. How do you plan to promote entrepreneurship among the youth?
A. Entrepreneurs are the role models of the world. Entrepreneurship is a performance of people who seek to achieve targets for others who serve him using his time and money, achieving targets and facing defeats.
Funds do not create an entrepreneur unless a person understands what his contribution in entrepreneurship where he should use good business ethics, social practice, create wealth and job opportunities, create products which are marketable, show others upward paths and make sure his business is sustainable.
Q. In an era where artificial intelligence (AI) is taking a prominent place, how could Sri Lanka’s education system change to match the needs of the future workforce?
A. AI could be referred to as a general way of what we are doing. AI evaluates every thing and makes use of available facilities for a better rate of performance. We have borrowed a large amount of money for unnecessary things. We have to evaluate and use the knowledge base to meet requirements. We have to make use of AI separately for the government sector.
Q. How much can business and the private sector do to really drive change?
A. The industries to drive change to enhance economic growth should come collectively from the government and the private sector industries. Their objectives and making national policies by the government with the support of the private sector for a sustainable industrial and economic model. As an example, the government is trying to get the support of another government to improve our exports more benefits for the products imports from their country.
Before getting on to that, our government policies and political burecacy should have a proper development strategy of the sector prior to starting negotiations. Also the government should make sure to discuss with the private sector institutions that are going to be affected by the agreement. As a business chamber, we push the government to come up with a national policy to make sure all the sectors are properly secured and covered by the bilateral agreements.
As Sri Lankan business leaders and professionals we expect a better future. The government policy makers should first look at the Sri Lankan perspective and come to a decision prior to negotiations. The local party representatives should also be invited to the negotiation table for more favorable agreement. What mostly happens in Sri Lanka was that government bureaucracy is trying to implement another country’s ideas without a proper knowledge of the after effects. Accordingly, most of the bilateral agreements we have entered have blocked Sri Lankan business opportunities to export those products to other countries which have more opportunities created for other country to grab the opportunity in our country. Ending so in close of Sri Lankan business so the government should provide facilities, subsidies and low interest rate facilities through local business to encourage Sri Lankan industrialists to reach substantial level to recover the financial assistant until the business is develop to sustainable level. All government organizations need to support the industrialists by providing fast track assistance to investors completely beyond political interference.
Q. How do you propose to increase PPPs in industries? Can you name a few projects suitable for PPPs?
A. The Sri Lankan Railway and Sri Lankan Transport system can be made profitable institutions. The government money as loans to support them is wasted due to weak management of those institutions. The railway system has not improved in the past 15 years except the new railway track to Beliatte recently. Railway compartments and tracks need modifications. The transport system should be privatised for a comfortable and safe transportation system.
Q. What are the immediate steps that the government should take to tackle the slow GDP growth?
A. The GDP growth depends on our earnings. If our earnings are less, the GDP is less and the budget gap widens. To bridge the gap, the country borrows from local and foreign sources at higher interest rates. Due to this, our exchange rate is affected and cost of living is increasing. The only way out is industrialisation.
Without damaging the environment, improving services and agricultural sectors is necessary. The government should introduce national policies for ministries and other organisations to attract local and foreign investments.
Q. What measures Sri Lanka can take to increase FDIs and exports?
A. Government institutions responsible to manage FDI, local investments such as the BOI and other relevant institutions, such as the Ministry of Commerce and Industry and other organisations should bring in policies for 15 years and ensure consistence policies in duties, taxation and other levies to encourage FDI and local investors in the country.
When investors are satisfied with political stability and favourable national policies by the government, the confidence enables more investments. Our country is spending only about 0.17 percent of the GDP for research and development.
This should be brought up to one percent within next two years. The private sector should also take a leadership in research and development. Sri Lanka has more opportunities in manufacturing high-end products at a lower price using our educated workforce.