Chamber leaders plan policy advocacy ahead of election

By Senuri de Silva

The annual Chamber Leader Summit and National Lobbying and Policy Advocacy Forum was held recently, to identify common issues and develop strategies for lobbying for policy changes ahead of the upcoming elections.

The main focus of the meeting which is organized by the apex organisation for national chambers, councils and organisations, the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), was the upcoming elections, top officials informed the media.

The primary aim was to gauge the pulse of the business community about issues that impact the economy of the country in order to advice the new government. FCCISL Secretary General Ajith Perera said: “The national chambers of commerce and industry have a duty to inform the new government of the financial facts of this country and its impact on economy.”

The FCCISL consists of 62 national chambers, 30 regional financial institutions and eight international financial institutions as well as 20 national associations which have gained membership with organisation.

Of this, 20 national chambers of commerce and 20 business associations were in attendance at this event. Additionally European financial experts and reputed human resource experts were also present in the capacity of observers at the forum.

One of the focal points of the forum was the shortcomings of the Free Trade Agreement signed between Sri Lanka and India in the year 2000. Business owners have expressed that the agreement has not been uniformly upheld in India as in Sri Lanka. Regional laws in India have placed limitations on its application.

Perera explained: “Unfortunately the regional governments of India have implemented certain limitations and bans on products exported from Sri Lanka.”

The Indian business community, however, is also very keen on solving this issue. There has been an ongoing dialogue between the two parties regarding this matter and it is said to continue at the 4th annual Indo-Ceylon Economic Dialogue (ICE-Dialogue) that will be held in Kochi, India before the end of September.

He mentioned that the export of local spices such as pepper had taken the biggest hit from these regional laws. However, officials are optimistic that the economic relationship between the two counties can be enriched by these discussions held between Sri Lankan and Indian business communities.

“We also identified a future threat that might be faced by the export industry of a small country such as Sri Lanka,” Perera said, referring to the free trade agreements that are to be entered into between the USA and 13 developed countries including some major buyers of Sri Lankan products.

Due to its potential for being a huge game-changer in the export industry, many business owners have expressed concerns about what such an agreement would mean for the future of the Sri Lankan export industry in terms of market availability. Business owners also find it a point of concern that the Sri Lankan authorities failed to recognise electronic documentation for imports. The use of such documentation has become commonplace in the import-export industry and yet, as Perera pointed out, “At present the recognition of such documents by our authorities has been limited to exports.” Therefore business owners have requested steps to be taken for such electronic documents to be identified when importing products as well.

Perera added a number of other concerns that had been important points of discussions during the day-long forum.

“Members also raised the issue of a lack of trade policies and I think this is a really important point as well,” he said, adding that it would be far more effective if the business community was consulted before entering into free trade agreements or creating national economic policies regarding their industries.

At present the business communities are informed only after the decisions have been made and he pointed out that if they had  been consulted beforehand it would be possible to get better policies that would better benefit the country overall.

Further, the SME sector needs to be given additional support by the government by granting them opportunities to get loans at reasonable interest rates. Additionally he expressed disappointment in the fact that there was no proper act to regulate the microfinance industry. Some microfinance organisations are not even able to take saving deposits and such limitations can be lifted through a proper legal framework which regulated the ways in which such businesses were run.

He also conveyed some concerns raised by stakeholders in the rubber industry about the fluctuating rubber prices as well as raising questions on the CESS tax which is charged for research and development in the field. “They have raised their concerns about whether the CESS tax is being used for that purpose,” Perera said, indicating that members wished to know what the revenue collected from this tax was being used for.

Members also hoped that the price of rubber would be maintained at a competitive rate and that the Government would aid the industry to create such an outcome.

Owners of nurseries that grow flowers such as anthuriums for export purposes have also requested that steps be taken to create more scientific and long-term solutions to increase productivity of their yield. At present growers enlist various practices on a trial and error basis. Soil is selected on such a trial and error method and this causes a severe decrease in productivity. Compared to countries like the Netherlands, the yield of Sri Lankan planters is very low as a result and farmers would like steps to be taken to rectify this issue.

Among the other issues discussed, he also highlighted the request of VAT concessions for two years for startups in order to support new businesses till they take off. Perera also pointed out that the country was losing Sri Lankan ingenuity to foreign nations by failing to recognise and develop local talent such as engineers. Suggestions had been made to create an ‘Engineers Act’ to regulate and take forward the construction industry.

Pix by Shehan Gunasekara