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Friday, 23 July 2010

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Private sector role recognized

The Government has given many clear indications of recognizing the role of the private sector, Ceylon Chamber of Commerce Chairman, Dr Anura Ekanayake said at the 171st Annual General Meeting which was held recently.

The appointment of several distinguished business leaders in the Standing Committee 'A', to head State institutions, accepting the need for making Sri Lanka an easy place to business, simplification of the tariff regime and the policy framework articulated in the mini-budget are some of them, he said.

"The stance of the Government of holding on to remaining State owned enterprises and the trend towards State institutions acquiring large chunks of shares of private business appears to give a different message. Again it must be acknowledged that the need to make loss making SOEs profitable has been recognized by the Government. Given that some of the large SOEs are experiencing massive losses, we would urge that a strict time frame be given to their transformation. In the event of failure, more radical measures must be considered in the national interest," he said.

"We lobbied with the authorities for quickly making Sri Lanka an easy place to do business. Today the Government has accepted this need and a high level committee is due to agree on an action plan shortly.

The recent 'mini-budget' for 2010 articulates a policy framework which addresses many issues including taxation, ease of doing business, allowing private higher education etc which we have highlighted over the years in a tireless and a consistent manner.

With two consecutive quarters of high GDP growth - 6 percent in Q4 2009 and 7 percent in Q1 2010 - Sri Lanka is now on a high growth trajectory. The recession is clearly a thing of the past. Tourism, agriculture and fisheries sectors showed immediate positive response to the end of the war. The other sectors should follow with the right policy environment.

Sustaining and even bettering such high rates of growth requires a sharp increase in investment - the need to increase investment from about 25 percent of GDP to around 40 percent and that this entire increase must come from the private sector is now accepted all round. Realizing this step change in private investment is an urgent need.

The single digit inflation, reducing interest rates and improving customer confidence are without doubt, reasons for optimism.

The chronic deficits, Sri Lanka has suffered for many decades, being the trade deficit, and the budget deficit, however, are cause for concern. The policy framework articulated in the mini budget clearly shows that the Government is well aware of these issues and is determined to address them. We earnestly hope that the Government will be able to steadfastly adhere to this framework even if some of them may not be popular in the short term," Ekanayake said.

"Ensuring continuing peace and stability along with transparency and consistency in governance are pre-requisites for rapid business growth and all round economic prosperity. We urge all stakeholders to give these the top most priority in the constitutional amendments envisaged.

Above all we will continue to promote business and investment throughout Sri Lanka. We will build linkages among small, medium and large enterprises, between those in the metropolis as well as in the regions, and connect Sri Lanka with the global economy, develop value chains and play a key role in winning the economic war along with the Government and the other stakeholders. We are committed to go along this path with all other fellow travellers including other chambers and relevant civil society organizations," he said.

"In the immediate aftermath of the war, the top national priority was the welfare of the IDPs and thereafter their speedy resettlement.

In parallel we renewed our links with the business community in the North and the East and in building value chains. We wanted the normal economic activities to resume as fast as possible. These activities are reported in greater detail in our annual report, and needs no repetition here.

At the same time, we started showcasing post war Sri Lanka as a great destination for business and investment by participating in relevant international events, hosting international business delegations in Sri Lanka and taking Sri Lankan delegations abroad," Ekanayake said.

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