From medium to long term perspective:

Clear-cut policy can achieve rapid economic growth

HIRAN H. SENEWIRATNE

Newton Wickramasuriya

Sri Lanka should have a clear-cut industrial policy to achieve rapid economic growth from the medium to long-term perspective, said Chairman, The Ceylon National Chamber of Industries, Newton Wickramasuriya.

He said the biggest problem they are facing now is the absence of a clear-cut industrial policy like in India. This resulted in slowing down the growth and new technological transfers in to the country.

Wickramasuriya who is also the Director/Chief Executive Officer (CEO), Central Industries Plc said, the need of the hour is to draft a consistent industrial policy for Sri Lanka in consultation with all political parties and industry stakeholders. This would give direction to the industrial sector to a great extent, he said.

He said that all policies in the country are inconsistent and change with every government that take office from time-to-time.

This discourages foreign and local investors from investing in major industrial projects.

Q: Most business chambers promote business activities focusing on the Western Province and have not gone to the rural areas in the country. As the Chairman of the CNCI what is your view?

A:Most economic activities are in and around Colombo. But now several development activities are taking place in the peripheries. However, CNCI as a leading business chamber we keep contact with other regional cambers in the country.

We have over 260 members. Like all other business chambers we have to manage with membership fees, which limit our activities.

In developed countries such as Germany and UK it is mandatory for every business entity to become a member of any business chamber. But in Sri Lanka the business chamber concept has to be developed.

Q: Sri Lanka’s industrial sector especially the export business is now facing a major crisis due to the global recession. What is your advice for decision makers in the country to improve the industrial sector?

A:We have an artificial exchange rate, which needs to be adjusted to facilitate all industries especially the export oriented sector to prevent it from closure.

Once it collapses it is very difficult to revive it again. If the rupee is devalued, the cost of imports will not go up.

At present there is a Cess on all imported raw materials, which is detrimental to the entire local industrial sector.

Theprices of all imported raw materials have come down globally. The removal of the Cess on imported raw materials will protect local industries at this juncture.

Q: How do high bank interest rates and currency depreciation impact on local industries?

A:Industrialists have to obtain bank loans at a very high rate, which are more than 25 percent. Moreover, the penal interest overdraft is more than 30 percent. Under these circumstances local industrialists find it difficult to survive in the competitive and challenging environment.

The biggest danger from this scenario is that industrialists would not invest in technology due to the global crisis.

Sri Lanka is a small market and most of the industries are high labour intensive. After the recession our industries might be left with obsolete equipment. This is my biggest fear when the global recession ends. Therefore, to avoid this situation, the government should encourage investments in new technology.

Q: What are the advantages we could gain from the global recession?

A:When there is a global recession every country reduces imports. Our apparel and tea exports have dropped due to this crisis. Fortunately Sri Lanka has not been adversely affected due to the global crisis on account of a strong agro based economy.

We should now explore new export avenues and invest in new technology especially in the agriculture related industries.

Q: What is the basic problem faced by the Board of Investment (BOI) industries in the country?

A:The biggest problem of the industries in the BOI Export Processing Zone is that these are high labour-intensive driven, which are not technology savvy.

Therefore, this will result in slowing down the transfer of new technology to these industries.

The advantage of having high-tech industries will improve other feeder industries, which will pave the way to have a strong industrial sector like the developed countries.

Q: What advice would you give national leaders to improve Sri Lanka’s economy?

A:The most important factors are to establish good governance and law and order in the country. If this prevails the rest will fall in to place automatically.

Q: As the Director/CEO Central Industries what are the future plans of the company?

A:The company manufactures PVC pipes and electrical fittings for the local market. Our electrical pipes are sold under the ‘Krypton’ brand. We also manufacture a wide range of plastic water tanks for factories and households.

Our company is the only company that manufactures steel water tanks in the country.

We are focusing mainly on the export market and a small quantity of pipes and fittings are being exported to the Maldives. We have a factory at Kerawalapitiya and our main objective is to penetrate into the export market.

We are planning to expand the factory in Kerawalapitiya and also have an idea of setting up a plant to produce building materials outside Colombo shortly.

Q: As a professional engineer what is your view on Sri Lanka’s professionals in any field?

A:There is a gradual decline in standards in all professions because it compromises quality for the sake of equality. This is something to do with our system of education.

The reason being, our professionals are not capable of handling tools for their profession. Apart from that, our professionals don’t inculcate good qualities and are not practical to handle anything.

Q: What is your philosophy in life?

A:My philosophy is to do the right thing at the right time. I am also a devout Buddhist and practise it as a philosophy.

Q: What is your retirement plan?

A:I will mostly spend time with my camera as I am particularly interested in taking pictures of archaeological sites.

I also like to travel in the country.