Sri Lanka: The appointment of Mahinda Rajapaksa as Prime Minister and Finance Minister (FM) is being hailed by chambers which believe it would have a positive impact to the ailing economy.
President National Chamber of Commerce, Sujeeva Samaraweera said that Mahinda Rajapaksa is a very experienced political leader. He knows and understands the needs and the problems faced of both the private sector as well as the common man and hence can balance both ends.
Currently Sri Lana needs a Finance Minister who would balance both ends and take the country forward with strong economic policies rather than adhoc and short term policies that were very detrimental to the country.
Meanwhile an official from the Ceylon Chamber of Commerce in a release said that the first priority of the new Prime Minister would be to ensure peace and stability in the country. “We request the political authorities to resolve issues democratically.”
President, Ceylon National Chamber of Industries (CNCI), Raja Hewabowila said that they welcomed this appointment and also thanked President for nominating a very senior and seasoned politician for this position.
He said that they were against to the way in which the previous administration was trying to force the FTA and other Economic partnership agreements without a right consultation with chambers and professionals.
“There were many negative points in the Singapore FTA and the Economic and Technology Co-operation Agreement (ETCA) with India.”
He also said that the new FM should also come up with a quick and long term action plan to resurrect the economy. “The best short term plan would be to aggressively promote tourism which is the third Forex earner for Sri Lanka and on the long term look at Agriculture, ICT and other areas. More facilities and tax incentives should be given to hoteliers and also encourage more airlines to fly to Sri Lanka. Agriculture should be promoted in a more aggressive manner and more tax incentives given to exporters.”
Sri Lankan fruit and vegetables have a high demand in the global market and this segment should be provided all support by way of fertilizer and also lower freight chargers for exports which in turn will bring in more dollars to the country.
The FM must look at promoting the ‘home gardening’ concept aggressively specially in rural areas which in turn will help to take the country towards self sufficiency in fruit and vegetables.
Secretary General/CEO Chamber Construction Industry Sri Lanka, Nissanka Wijeratne said that they welcome a seasoned politician taking over the FM post and said that there were many issues in the industry that has to be addressed soon.
Firstly Sri Lankan construction cost is the highest in the region due to high import taxes and this has to be looked at soon. “The construction cost per square meter in Sri Lanka is US$ 1, 200 while India it is US$ 800 and in China its US$740.”
He said that in addition there is a 107 % tax for tile and sanitary wear exports. “This too is adding to the construction cost. One of the other biggest issues we face recently is the tax that is imposed when we secure a local contract. There is a ban of River sand but an alternative has not being given and these issues have to be addressed soon.”
Immediate Past President Colombo Chamber of Commerce and President Sri Lanka Trade Development Council, Amila Kankanamge said that the SME sector should be aggressively promoted. “Before promoting multinationals to invest in Sri Lanka, the government must try to help the SME sector by marrying them with SME sectors in other countries. This would bring in small FDI’s of around US$ 4 to 5 which in turn would create more jobs and help to trickle out economic benefits regionally.”
Former President of the Federation of Chamber of Commerce and Industry, Nawaz Rajabdeen said that the new FM should try to get the industrial sector reactivated and they should be given more incentives specially to compensate the high cost of energy.
The Vehicle Imports Association Assistant Secretary Prasad Kulatunge said that the new FM should spell out a long term tax policy and should not adjust is regularly as done by the previous Finance Ministers.
One of three other major issues that need attention is to identify the correct importer and give them a certificate. “Today there is 400 registered car importers who pay all the import duty and another 3,000 importers who resell vehicles without any duty.”