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The Ceylon National Chamber of Industries(CNCI) has called upon the Government to formulate a sound economic policy giving emphasis to the exchange rate, tariff, fiscal and wage policies to develop the country's industrial sector.

A special committee headed by the Chairman of the Chamber Asoka de Z. Gunasekera has prepared a Memorandum in this regard and it has been sent to Prime Minister Ranil Wickremesinghe and the Ministers in charge of Industrial Development to be considered in the evolution of a long-term economic policy for the country.

The CNCI is the pioneer industrial chamber incorporated by an Act of Parliament and has about 350 members from the small, medium and large sectors.

The Memorandum has proposed formulating a realistic exchange rate policy and a tariff policy which will neither undermine industrial growth nor over-protect industry. It has been also proposed formulating a fiscal policy to promote steady investment growth while avoiding inflation and a wage policy linked to productivity.

The letter sent by the Chamber also stated: "In a survey conducted recently by the Ministry of Enterprise Development, Industrial Policy and Investment Promotion, it has been found that 230 industries have already closed down. An analysis of the reasons for such closure indicates financial and marketing difficulties, and also due to large scale dumping of low quality and low priced imported products in the local market, which adds on to difficulties in marketing. It could also be surmised that many more industries are on the verge of closure due to similar difficulties. This dangerous trend has to be arrested not only for the sake of maintaining industrial production, but also to safeguard the employment potential, which is getting gradually eroded."

The chamber has attributed the current situation of the industrial sector to the result of a series of difficulties the sector had been facing over the last few years.

"The progressive increase in the cost of funds, restricted access to funds and lending restrictions on the part of banks and unfair trade practices adopted by exporters of competing products to Sri Lanka, the rising inflation and unemployment rate and the increased cost of living have taken its toll over the industrial sector.

The CCPI has passed the 3,000 unit mark this January.

Meanwhile, there has been a downward trend in economic growth as a result of a decline in active export performance and a decline in domestic production. This has been due to lack of support for import substitution industries and an insufficient response from foreign capital due to several reasons. The cumulative effect of all these factors has had a dampening effect on the industrial sector."

The Chamber called upon the Government to take confident building measures with a sense of urgency in order to rehabilitate the already collapsed industries, consolidate the position of those who are still in operation amidst difficulties and to create an atmosphere of confidence for new investment including foreign investment in the industrial sector.

Among the other issues highlighted by the Chamber in its Memorandum were high cost of credit, lack of technology, labour issues and specific issues faced by the garment sector.

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