‘Appoint high-powered working group’:

Take measures to overcome obstacles in business - SLBDC MD

Ramani Kangaraarachchi

A high-powered working group consisting of public servants and businessmen should be appointed with the mandate to identifying, within three months, the obstacles for doing business and taking prompt corrective measures, Sri Lanka Business Development Centre’s (SLBDC) Managing Director, Charith Ratwatte told a seminar at the Sri Lanka Foundation Institute on Thursday.

Focusing on the findings and policy recommendations of a study commissioned by the Pathfinder Foundation to identify policy actions required to unleash the potential of the private sector including larger corporates, SMEs as well as individual initiatives, he said that this working group thereafter should be a standing group that will assess the situation regularly and make suitable recommendations for adoption.

He said that the difficulties of commencing businesses in Sri Lanka alarming and it has mainly fettered the small businessmen, since the large magnates are in a position to overcome them through the social networks they have established.

People, engaged in the production of goods and services for use by other fellow citizens or for export purposes, operate in the real sector.

Hence, the improvements suggested for this sector contribute to the empowerment of people and include them on a wider basis in the growth process.

Ratwatte said that the individuals who operate in the real sector as entrepreneurs include, at the bottom of the pyramid, farmers, fishermen, small businessmen, wayside mechanics, three-wheeler and taxi drivers, traders, a large number of small and medium entrepreneurs and at the top of the pyramid, a few large corporate magnates.

Hence, any policy to empower people and develop their capacity will benefit a large number of individuals who have the skills, talents and initiative to undertake successful business ventures, he said.

Referring to the obstacles created by exchange controls, he said that the exchange control legislation in force in Sri Lanka is a misfit to the system in the current context, where countries have more flexible exchange rate systems and responsible inflation fighting strategies.

When people have lost confidence in their own currency, no amount of legal barriers could stop them from resorting to such practices. Hence, the solution is not to apply exchange controls, but adopt sound macroeconomic policies, he said.

Exchange controls have also created a barrier for Sri Lankan entrepreneurs to move out and invest in other countries so that they could gain experience and add to the national wealth by way of increased earnings.

The study recommends to complete the liberalisation of the economy as fast as possible and replace the Exchange Control Act with an exchange management legislation, he said.