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| Saturday, 20 March 2004 |
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A full-speed industrialization program powered by PA by a Correspondent Having realised the importance of a vibrant private sector to increase economic growth, the PA Government continued with the private sector-led export industrialisation strategy during its tenure from 1994 to 2001.
The strategy was aimed at expansion, diversification and upgrading of the domestic industrial base and export base, creation of new employment opportunities, efficient management of physical and manpower resources and the promotion of regional industrialisation. In addition the government offered a wide range of incentives to both local and foreign investors to encourage investment in the industrial sector and raise productivity with the objective of improving competitiveness of industries. Recognising the need for a sound mechanism to resolve the problems of the entrepreneurs promptly and efficiently to enable them to enhance productivity and competitiveness the government in 2001 appointed a high powered Industry Facilitation Forum (IFF) under the aegis of the Ministry of Constitutional Affairs and Industrial Development (now Ministry of Enterprise Development, Industrial Policy, Investment Promotion and Constitutional Affairs). This Forum was meant to establish continuing dialogue between private and public sectors on bottlenecks and problems faced by the industrialists. A Committee on Deregulation was formed under the Industrial Promotion Act to study and make proposals to remove bottlenecks that hinder the flow of both domestic and foreign investment to the industrial sector and to improve the country's competitiveness. The committee commenced studies on regulatory impediments to business progress, regulations for a modern and efficient energy sector, regulatory problems from an international perspective and regulations in the tea sector. With the objective of creating a dynamic SME sector to enhance its capabilities and competitiveness through strengthening the enabling environment improving access to finance through commercial channels and enhancing capacity of the business development services sector to deliver services efficiently and effectively, a SME Development Program was launched in 2001. A Presidential Task Force on SME development and supporting working committees were also set up during this period. The programs were mainly targeted at youth who possess entrepreneurial ability or who have initiated small enterprises which have potential for development. In addition a business/industry incubators program was launched by the Ministry of Industrial Development during the year, provided infrastructure facilities to small and medium scale industries. The Competitiveness Initiative Project that commenced in 1999 with funding by the US Agency for International Development continued into 2001. An industrial sub-contracting and partnership exchange (SPX) was launched in 2001 with the assistance of UNIDO. The Industrial Restructuring Unit at the Ministry of Enterprise Development, Industrial Policy, Investment Promotion and Constitutional Affairs was responsible for identifying incipient sick, and defunct industrial enterprises and suggesting remedial measures and the Ministry was able to intervene and resolve many a problem during the same period. The PA Government also provided many other incentives to the industrial sector. The fiscal incentives scheme introduced in 1996 to encourage domestic manufacturers to adopt advanced technology in production processes to improve quality, productivity and competitiveness of the domestic manufacturers was extended for a further period of two years in Budget 2001. This scheme offered duty free import of approved machinery and equipment for both new and existing enterprises and a five-year tax exemption on incremental profits. During 2001, 18 new projects and 4 existing projects were given approval to import modern machinery and advanced technology. A restructuring program for domestic textile industry was also launched in 1998 to encourage domestic textile manufacturers to undertake the modernisation of their textile mills. |
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