More avenues for economic growth

FCCISL has important role to play:

Message from the former President Federation of Chambers of Commerce and Industry of Sri Lanka Kosala Wickramanayake for Annual Report 2009

Following the defeat of terrorism at the banks of Nandi Kadal, Sri Lanka stands at the cusp of a momentous new era. Peace has returned after three long decades and with it a renewed sense of purpose. There is optimism everywhere. The opportunities for the growth of business are immense. We live in a land of great potential and the FCCISL - as the apex body representing the chambers of trade and commerce - has an important role to play.

Kosala Wickramanayake

The accelerated economic development now underway brings with it a promise of prosperity. We must ensure that its full potential is harnessed.

This is not an easy task, but our organization, with its scope and reach, can do much to overcome the challenges.

Economic performance

Given the country’s recent economic performance, there is good reason to be hopeful. Despite the financial, fuel and food crises around the world, which turned into a full-blown economic recession, our economic demonstrated its resilience by recording a 3.5 percent growth in 2009. Even more remarkably, it achieved a growth of 6.2 percent in the final quarter of the year.

This, in my opinion, is the beginning of a new era of economic prosperity. Other indications are also promising. Inflation was brought down to 3.4 percent, and the exchange rates were maintained at relatively stable levels.

The benchmark interest rate saw a sharp decrease to 7.5 percent. Foreign exchange remittances by our expatriate community grew to US $ 3.3 billion, while timely government interventions in the financial and fiscal markets had a positive impact at the macro-economic level.

As expected, the country’s tourism industry received a great boost with the defeat of terrorism. It grew by 49 percent during the year, compared to an average of just 14 percent in the Asia-Pacific region. Meanwhile, the infrastructural base for an economic takeoff is being laid.

This is evident in the large-scale investment in ports, airports, highway networks, power, railways, irrigation and water supply.

It has created an environment conducive to attract both foreign and domestic investment. Also, the proposed reforms in the spheres of education, health and social safety will, hopefully, lead to significant strides in the progress and well-being of our people.

Private sector

There are other encouraging developments. Among these is the decision of the International Monetary Fund (IMF) to help place the country’s macro-economic fundamentals on a sound footing by granting BOP support of US $ 2.6 billion under a stand-by arrangements facility.

We hope that the Government will, as a matter of priority, initiate reforms in certain important areas.

These include the higher education system, the rigid and complex labour laws, the public service, the tax system and the investment regime.

Assistance to the Small and Medium Enterprises (SMEs) is also necessary. Other areas that need greater emphasis are vocational training, agriculture and agro-processing.

Sri Lanka is fortunate in possessing the natural resources and human capital necessary for progress. In fact, I believe that if the proper Government policy framework is in place, we can achieve an economic growth of 8-10 percent.

As I stated earlier, the Federation has an important role to play. With 50 chambers of trade and industry and business associations affiliated with us, and over 12,500 member businesses, we can do more than any other organization in the private sector.

Today, we are present in every region via this extensive network, and so can harness its strengths to spur the economy forward.

To be continued