FCCISL positive on SME policies of Mahinda Chinthana

"The recognition and emphasis given to the Small and Medium Enterprise sector in the manifesto of Prime Minister Mahinda Rajapakse has to be praised. What is admirable in the "Mahinda Chinthana", the development vision of Prime Minster, Mahinda Rajapakse is that it proposes a strategy and a vision rather than a set of activities for the development of the Small and Medium scale enterprise sector, which is the backbone of the economy of the country," President of Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), Nawaz Rajabdeen said.

Every successive government after independence talks about the SME sector and its development only during election times, and once the elections are over they keep on promoting anti-SME policies which have retarded the creation of a dynamic SME sector in Sri Lanka.

The late President R. Premadasa was the only leader who was an exception to this and during whose period the SME sector saw a remarkable growth.

The SME vision of the Prime Minister resembles the SME development strategy of late President Premadasa. For instance, the proposal to establish a large scale industry per each Divisional Secretary Area has the same development objective of the popular 200 Garment factory programme of President Premadasa.

It is the President Premadasa who declared the entire country as a free trade zone in order to boost private investment and industrialisation in the regional areas. The Mahinda Chinthana also recognises the creation of 12 investment zones covering the entire country to achieve the same objective.

The high priority given to the local industries, which manufacture products for overseas markets by using more than 75% of local raw materials, is a very welcome move to promote local value addition and employment creation.

The agriculture sector and dairy development are also two issues that have been highly politicised in the election campaigns so far. However, considering the vast potential these two sectors are having and its ability to accelerate the pro-poor growth the strategic approach taken by the Prime Minister is commendable.

No country in the world has developed their agriculture and dairy sectors through total liberal economic policies. Certain amount of protectionism is required to develop agriculture and dairy sector. This is a widely known reality in any country including India, Japan and the United States.

So why not in Sri Lanka? All previous governments have exposed our poor farmers to the stiff competition of the open economy without any incentives unlike in other courtiers which have made the poor poorer.

The "Mahinda Chinthana" recognises the need to protect agriculture and dairy sectors against the open economic forces in order to stimulate growth and self-sufficiency in the two sectors. This will also give the farmer the opportunity to gain more profits, which will have a direct positive impact on reducing their poverty level.

The "Mahinda Chinthana" for the first time in the history recognises the inter-relationship and the need to create a balance between the Foreign Direct Investments (FDIs) and the SME sector. It is important for the overall economic and industrial development to maintain a system where the two sectors co-exist and interdependent within an open market framework. This strategic point has been adequately stressed in the manifesto of the Prime Minister.

The sectoral industrial development or the sector specific industrialisation is also move in the right direction in order to capitalise on the competitive advantage of each of the sectors. Sector specific industrial development initiatives and policies outlined with regard to apparel sector, construction sector, tourism sector, minerals sector etc. do make a lot of sense in terms of boosting local industrialists.

Achievement of all these depend on visionary leadership, peace and a strong administration.