Timely measures are necessary to save the local industries

We have learnt from newspapers that due to many disagreements between the President and the Parliament, Cabinet meetings have been suspended pushing the country to a further uncertain situation

The security situation in the country is gradually improving since the Easter Sunday bombing which brought social life and economic commitments to a standstill. The day-to-day life is getting back to normalcy. International travel adversaries have been softened by many countries. 

Despite all these improvements, the business community in the country, especially the local industrialists perceive that the economy and the business environment need long term measures to be taken by the Government to create a conducive environment for the efficiency and stability of the local industries. This article speaks of some of the issues faced by the local industrialists that will create doubts as to their existence and growth. 

One of the grave issues faced by the local industries is the high cost of production resulting from increased taxes, high interest rates and removed protection to local entrepreneurs, thus losing their competitive advantage.  Similarly, the signing of poorly negotiated FTAs have placed local economic activities at a disadvantageous position. In this respect, we urge the Government to explore the possibility of revisiting the recently-signed FTAs and amend the conditions in a manner that it gives reasonably fair benefits to both parties and encourages and uplifts the local entrepreneurship and production-based businesses. 

Economic growth has declined year-by-year and in 2018 it declined to 3.2% which is higher only to Afghanistan in South Asia where countries such as India, Bangladesh and Nepal have maintained over 6% annual growth. 

The rupee has depreciated by over 35% in the last four years and the Government is facing a severe foreign exchange crisis. Trade deficit in 2018 crossed $ 10 billion for the first time in its history. The Government should encourage local manufacturers and align Government policies accordingly to come out of the current economic crisis. 

Unfortunately, our economic policies are basically based on the colourful political promises made to attract the voters which sometimes, neglect the macroeconomic fundamentals since they take new faces with Government changes. 

During the last four years, many of the local businesses have been facing challenges for their own survival. Further, as at date, Sri Lanka does not have a trade policy or an industrial policy. The Ceylon National Chamber of Industries (CNCI) requests the Government to engage with the business community to develop a trade policy and an industrial policy. 

Among all the commercial activities, the industrial sector is an important element. Currently the Ministry of Industries and Commerce is focused on resettlement of protracted displaced persons, Co-operative Development and Vocational Training and Skills Development and has no time to dedicate itself to the industrial sector. As such, we request the President to allocate a separate ministry to the industry treating it as a special case.

When certain ministers were accused of having direct links with terrorists who were involved in the Easter Sunday bombing and the pressure was mounting for them to resign, nine ministers and deputy ministers have resigned creating another problem of many ministries virtually becoming non-functional. 

During the last four years, many of the local businesses have been facing challenges for their own survival

After many days from the above resignations, three acting ministers have been appointed on 10 June. However, we have learnt from newspapers that due to many disagreements between the President and the Parliament, Cabinet meetings have been suspended pushing the country to a further uncertain situation. 

All the above incidents are creating further problems to industrialists who are already in deep trouble due to the many reasons explained above. Therefore, we urge the President and the Prime Minister to resolve their problems immediately and bring normalcy to the country before all industries collapse due to a grave lack of governance in the country.

(The writer is the Chairman of the Ceylon National Chamber of Industries.)