The fourth session of the KPF series in 2013 was held on 17 December in Galle. The forum was headed by Minister Dr. Sarath Amunugama, Minister of International Monetary Co-operation and Deputy Minister of Finance and Planning.
The forum organised by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) and the Galle District Chamber of Commerce and Industries was themed on ‘Investment Opportunity and Incentives available for entrepreneurs in the Southern Region’. The Asia Foundation under its Local Economic Governance Program, which is funded by the Australian International Agency for Development (AusAID) is supporting to bring KPF in to the regions.
Kumar Mallimaratchi, President, FCCISL welcomed the Chief Guest Dr. Amunugama, members of Galle Chamber and participants. Delivering his brief welcome, Mallimaratchi stated: “We are glad to have Dr. Amunugama who is one of the top civil servants and an eminent political personality in the country, as our Key Person today. Our entrepreneurs who do well not only could win Sri Lanka but need to keep in mind on global perspectives when they are expanding. All the forums we had in previous year confined to Colombo. We felt that it is the appropriate time to get these forums in to regions and allow a dialogue between key policy makers and the business community. All the forums had in outside of the Colombo were very successful and I hope that you make use of this opportunity. Hon. Minister can explain latest developments, new trends, trade and investment policies and many. Please utilise this opportunity to clear your queries with regard to the business and these subject areas.”
Nalin Attygalle, CEO/SG of the FCCISL who was the moderator of the forum, mentioned few words about the programme and how it is been realised. He said: “FCCISL gone all around the country reaching the entrepreneurs in entire Sri Lanka and found the real spirit of Sri Lankan entrepreneurship through the Sri Lankan Entrepreneur of the Year Awards 2012. Sometimes we used to talk what we have been doing all the times, but this is a great occasion to discuss current scenarios of the businesses and national economy and build confidence of the SMEs, giving them the opportunity to voice in a common platform with key policy makers and eminent persons in responsible with expertise knowledge and decision making powers. Today’s Key Person Forum is enriched by such a knowledgeable, experience politician plus a civil servant. Next session of the Key Person Forum will be held in Kandy.”
The Minister addressing the forum stated: “I must tell you that all around the world, countries face lot of issues, gloomy picture remains in the global economy. Comparatively Asian countries, especially in China and India are in better situation. China is becoming the superior economy and India is securing its path. The main facet of the India and China economy is it is based on production and exporting to EU countries. The cost of labour is 3:1 in India and Western. Since the western heavily invest in China, now the western countries find difficult to continue the same approach. Today India’s domestic market is worth more than US$ 400 million and China more than that. They can still carry on catering to the domestic customers. Compared to those countries still Sri Lanka is in a better position, why, the war has ended by defeating terrorism and a new era has begun. The opportunities are arising and now return on investment is more predictable.”
The Minister also said that the current per capita income is US4 2,400 and plans have been drawn by the Ministry of Finance to increase it to US$ 4,500 by 2015. “The south is very famous for its entrepreneurial men and women. 35% of the national economy is depending on the SME sector. China’s development cure was drawn by the Deshaon. They had the plans of transforming their SMEs to millionaires. They are the backbone of the country and you have to get rid of from the ‘mudalali’ mentality. You have to position yourselves as the main source of the national economy. The investment a Government can afford on offering jobs is limited. Now the Government is trying to merge new graduate appointments with programs like Divi Neguma, in order to contribute to the development of the national economy.”
He also said the private sector can offer more jobs than the Government and the ratio of producing jobs between the private and public sector is 4:1.
“If the country needs to be developed, the private sector needs to be empowered and the government needs to support it. As entrepreneurs you need to look at what your comparative advantages are. Always look at avenues how you can differentiate yourself from the other competitors and serve what others can’t and serve it better.”
He also said that the banks have been requested to provide more services to facilitate SMEs instead of spending for purchasing luxury items. This adversely affected the economy and the import and export deficiency has also gone up, where the ratio lies at 3:1. So banks need to provide more and better service to the SMEs than in the past.
During the discussions, the following points were highlighted:
Red tape – One hotelier from Galle said that he is engaged in constructing a hotel project in Unawatuna. He faces lot of problems with regard to the electricity when he tries to get the 16 amp connection. Though he followed all the procedures required for approvals, that alone took one year.
Even a small approval to change an address in the water bill of a business makes difficult according to one participant from Crystal Pharmacy, Galle. He said as this particular officer is holding it for no reason, he can’t launch his new business venture with Baurs. The Minister accepted that such bureaucratic behaviour prevails in provincial councils and even central governmental bodies. The Galle Mayor attended to this issue immediately.
Trained and skilled staff migrating to the urban areas and abroad – it is also said that hoteliers find it difficult to recruit and retain trained and skilled staff as they migrate.
Savubhagya Loan Scheme – The Minister had a discussion with one representative from Commercial Bank. It was said that the Savubhagya scheme is available but the priority is given for the Uva and Sabaragamuwa Provinces. When an applicant is receiving a loan applied under the Savubhagya loan, he has to pay an interest of 18% until he receives the approval from the Central Bank. With the concern of priority for particular provinces, the Minister suggested introducing a quota system.
Banks to be flexible and find solutions for practical issues - One participant who is engaged in travel and tourism suggested that he can save lot of interest he pays which occurs due the different calculation done by IATA and the banks when it comes to defining the financial year. He requested banks to be flexible and find solutions to such issues.
Issue of overdraft, construction industry – This was raised as contractors are not getting their payments from the Government on time.
Small tea holders – The small tea factory owners raised an issue that they get their payments after about one-and-a-half months from the auction. But they have to make the payments once they purchase the tea. He was asked by the Minister to present a letter to the Minister through the Galle Chamber.