Following are excerpts from the address delivered by Aloy Jayawardene, PHF, JP, President of the Sri Lanka Chamber of Small and Medium Industries at the 48th anniversary celebrations and ‘Industrial Excellence Awards 2011’ held at Waters Edge last week. Chief Guest at the ceremony was Australian High Commissioner Kathy Klugman
I feel privileged and sad because I happen to be the only one left holding membership of the chamber of that band of dedicated friends who founded this organisation 48 years ago. The last 48 years have seen our organisation grow from a small industries association to its present status in our land. With us this evening are two past presidents of the chamber, my dear friends, who were with me at the inaugural meeting 48 years ago, but they are no more members of the chamber, they are Mr. Granville Perera and Mr. Pathmasiri Dias. Thank you for your presence, Granville and Pathmasiri.
‘The Industrial Excellence Awards’ is being held for the sixth consecutive year. A special feature of this ceremony is the emphasis on the small enterprises in six provinces of the country with the Regional Development Bank being the Principal Sponsor of the event with 255 branches in the seven provinces. The respective banks invited their clients to participate at this event competing for the special six recognition awards. We received over 500 applications from the said provinces. We are extremely thankful to Mrs. Janaki Kuruppu, Chairperson of Regional Development Bank, who is with us this evening for having accepted our invitation to be the Principal Sponsor for this event.
In return for the very kind gesture, the chamber will provide resource persons from our membership to deliver lectures at their workshops ‘Welanda Sabhawa,’ to improve the activities of both the saving habit and business activities, of their clients.
The first such seminar the chamber participated was in late September at Dankotuwa in the Wayamba Province. Mr. Nandadasa Rajapakse, Past President of the Chamber and Chairman, DSI Group delivered a lecture, which was extremely impressive. I too participated at this workshop, where over 300 clients of the Bank in the Kurunegala and Puttalam Districts participated.
The chamber did provide resource persons for two other workshops in the Provinces of Uva and Central. The Resource Person was none other than Mr. Luvi Siemon, Managing Director of Impressions Labels Lanka (Pvt) Ltd. and Vice President of the Chamber.
We also received 10 applications from the Northern Province and we have selected one winner from Jaffna for recognition this evening.
Ties with Australia
In the first quarter of 2011, I visited industry chambers in different states of Australia – Tasmania, Victoria, New South Wales, Western Australia and Queensland – where I discussed bilateral trade between Sri Lanka and Australia. My first visit in 2007 was meeting chamber representatives in Victoria, New South Wales, Queensland and Tasmania. Thereafter, I led a 10-member delegation in 2008. The visit in 2011, I was promoting products of our members exporting to various countries and interested to find markets for their products in Australia. We signed a Memorandum of Understanding with the Aus-Lanka Business Council in Victoria for the mutual benefit of members to improve trade and investments.
Mr. Kumara Semage, Past President of the Chamber, joined in my visits to the States of Western Australia, Queensland and Victoria. The benefit of my visits will be when the chamber organises the second trade mission with 15 of our members visiting Victoria, Western Australia and Queensland, which the chamber is planning for the third quarter of 2012. With us this evening is Her Excellency, Mrs. Kathy Klugman, the High Commissioner for Australia and I am confident we will have the support of the High Commission Office in Colombo to make the proposed visit a success.
In February 2012, we are organising a trade mission to Myanmar and I am presently in communication with the Myanmar Federation of Chambers of Commerce and Industry and also with our Sri Lanka Ambassador in Myanmar. We will invite an official from the Export Development Board to join us on this mission and seek assistance for the mission. We are in communication with our Embassy in Myanmar.
Credit line for smaller industries
Friends, there was concern that the financial US$ 50.8 million World Bank credit line for Small and Medium Enterprises would fall into the hands of larger enterprises rather than reach start ups and smaller enterprises which would benefit immensely from the concessionary rate of interest charged on these loans. I personally met Minister of Industry and Commerce Rishad Bathiudeen and Mr. Ameer Ali, Chairman, National Enterprise Development Authority and told them that the said credit line would be absorbed by larger companies unless the Government took immediate steps to make a clear policy decision to set aside a percentage of this credit line for smaller industries.
The chamber was of the view with the SME definition adopted for the credit line which is classified using a combination of two indicators. Small enterprises – Rs. 10 million to Rs. 100 million assets value and medium enterprises – Rs. 100 million to Rs. 400 million in assets value will benefit the larger units.
We suggested that 30% of the US$ 50.8 million credit line be reserved exclusively for the industries with an assets value of less than Rs. 50 million while the chamber liaised with the National Enterprise Development Authority to screen applications. We requested that a policy decision has to be made urgently to reserve 30% of the credit line for the exclusive use of the small industries when loan applications are evaluated.
If this arrangement is accepted by the Central Bank we have the opportunity to avoid this benefit being used by larger enterprises and also ensure to the emergence of more diversified and geographically dispersed small industries to address regional economic disparity. We were made to understand that this loan has been dispersed to the tourist sector – for hotels. We now appeal to the World Bank and other foreign agencies, future credit lines be made available to small and medium industry for their development, which have been neglected down the years.
We welcome the Ministry of Industry and Commerce for mooting an Industrial Forum. The Industrial Forum will function as an entry point for the high-level Exporters Forum. Once established it may become the preliminary round before the Exporters Forum.
The chamber is presently preparing a Project Proposal to develop the small and medium enterprises in the country and the Concept Paper had already been finalised.
The author of this programme is the former Director General of Commerce. With the Concept Paper we are to seek funding from a foreign agency and once the agency accepts this document, the Project Proposal is to be prepared.
The Concept Paper was presented to the Country Director and Senior Advisor of the German Technical Co-operation for their study and consideration. The said Concept Paper will be presented to other foreign agencies to support this. We have the Regional Development Bank to partner us in this programme. This will help their clientele of over 300,000. This evening, we sign a Memorandum of Understanding with the Bank to assist their small and medium enterprise sector their clientele once the proposal is accepted by a foreign agency.
Sri Lanka today, although a nation looking towards the future, is one that is facing considerable setbacks by constantly being dragged into its past. It is known that that there are issues still unsolved with the Sri Lankan people of the north and that is the legacy of the war we fought for 30 years. The healing and reconciliation process needs a lot of time.
President Rajapaksa addressing the United Nations Assembly a few months back said Sri Lanka has its own home-grown solutions. He asked our friends in distant lands to drop preconceived notions. He said that Sri Lanka believes in home-grown solutions. It was the home-grown formula that won the war and brought peace to our country.
Our small island was attacked by the most powerful and feared terrorist organisation, which has tentacles worldwide. Though we have completely eradicated terrorism from our country, the front organisations worldwide are active with enormous accumulated funds and with the help of the misguided Diaspora to attack our Motherland.
The healing and reconciliation needs a lot of time. It is not fair on the part of the international community to expect to heal wounds in two years of ending the war that had taken over three decades. Sri Lankan people are requesting the world community to act in friendship for peace and peaceful co-existence, to understand the issues in a correct perspective and work together for a peaceful, prosperous and better future for all citizens in the globe.
The economic crisis that started in Greece has now spread across Europe, while the United States too is expected to take a plunge with four banks closed end October 2011 with a total number of closures for 2011 amounting to 84. Stock markets across the globe have taken a battering and there is now a talk of another financial crisis.
Why are we in this economic mess? Very simply, we are borrowing and living way beyond our means, economically. Unless there is a check on consumption, credit and creation of ‘imaginary money,’ the global economy will continue to be haunted. This is a warning for the Sri Lankan economy, with the trade deficit expanding to well over US$ 6,000 million.
A visit to Viet Nam
A 15 member mission organised by the Chamber visited Viet Nam on an eight-day business tour. The entire programme for the tour was arranged by His Excellency Ton Sinh Tanh, Ambassador for Viet Nam, who is with us this evening – the first Ambassador representing the Socialist Republic of Viet Nam.
The delegation initially visited Hanoi, where we met the Viet Nam Association of Small and Medium Enterprises. Thereafter we met officials of the Ministry of Industry and Trade and with a Power-point presentation they explained the State structure of Viet Nam. Viet Nam initiated economic renovation in 1986 shifting from central planned economy with State subsidies to a socialist-oriented market economy.
The mission members visited two other cities, Danang and Ho Chi Minh. We met the Vice President of the chambers in both cities. We had very positive inquiries in both cities. A joint venture for garment identification products, the Vietnamese partner to provide land and buildings. Our mission member manufacturer of electrical cables, presently in communication with a cable manufacturer who is closing down his factory to buy it outright and continue production on a joint venture basis. All other members of the mission are presently in communication with their counterparts and positive results are in the pipeline.
As Leader of this Mission to Vietnam, I have made some startling and fascinating observation of this country, its culture and its people. I tried to make some comparisons with Sri Lanka and often wondered what has happened to my Motherland.
There are 85 million people in Viet Nam. The Great Ho Chi Minh had pride of place in that country.
Forty-two years after his death, every day people come from all walks of life to visit his mausoleum, see him preserved, walk past his body and silently pray, shed a tear for this great man. I was told that every day the mausoleum is full with queues of people coming from far and wide to pay homage to him. Our mission too visited the mausoleum. We had to go in a queue and walk a fair distance. Having spoken to some families, I found the fundamental culture is that they will never let their parents or grandparents live without them, even after they get married. They consider it their duty to look after their elderly till they pass away. They are very hardworking and respectful people.
Thank you to my members of the chamber for having elected me as President for another term at the Annual General Meeting of the Chamber held this afternoon. It is during this term that the chamber will celebrate its Golden Jubilee – 50 years – a milestone in the history of the Chamber.