CCC Chief calls for new wave of reforms

•  British HC commends Sri Lanka for progress made over the years

By Cheranka Mendis

Ceylon Chamber of Commerce Chairman Susantha Ratnayake yesterday called for a new wave of reforms if the country were to come out of current shocks quickly with the least amount of pain.

In his address at the chamber’s 173rd Annual General Meeting, Ratnayake, whilst noting that Sri Lanka had enjoyed two years of 8% plus growth mainly driven by consumption, said: “It was unfortunate that we failed to recognise the early warning signs of a balance of payment crisis. Thereafter, the decisive and bold policy action by the Government has averted a crisis but the resultant shocks will take a while to overcome and as such we need to stay the course.”

“In this context I would respectfully suggest that a new wave of reform is needed if we are to come out of this quickly, with the least amount of pain, as seen from past experiences in our country’s history,” Ratnayake told the AGM, at which he was re-elected.

He noted that with the country enjoying peace for the fourth consecutive year after the end of conflict, tremendous opportunities have arisen to finally realise Sri Lanka’s true potential.

Agreeing with Ratnayake, British High Commissioner John Rankin, who was the Chief Guest, pointed that ‘The World Economic Forum Global Competitiveness Report for 2011-12’ had assessed Sri Lanka as improving ‘across the board’ in terms of overall business efficiency and performance. The country’s overall rank rose to number 52, as against 62 in 2010-11. In the World Bank’s Ease of Doing Business indicators, Sri Lanka ranks 89 out of 183.

“No doubt, Sri Lanka would like to move higher up that index, but it is already the best ranked country in the South Asian region. Sri Lanka also has the highest literacy rate in South Asia, strong English language skills, and increasing IT skills – all of which are key factors in driving economic growth.”

He commented that while there will be some “softening” this year in the growth rate as opposed to the 7% achieved in the last two financial years, Sri Lanka was still likely to compare very favourably to what would be achieved in the West this year.

With over 100 UK companies already carrying out successful operations here, there is scope for more companies to set up operations in Sri Lanka. The Government should however create a conducive climate for business to develop focusing on four qualities investors look for – certainty and stability, increased transparency over public contracts, incentives to allow them to grow and confidence that their investments will not be subjected to arbitrary action.

“Above all companies want more room for businesses to simply get on with what they do best – doing business.”

While the country’s export sector should identify the opportunities for further growth presented in the new emerging markets, Sri Lanka should not forget their more established markets, including the UK.

“The European Union as a whole remains Sri Lanka’s largest market. In 2010 exports of your products and services amounted to Euro 2.28 billion, which represented 36 per cent of Sri Lanka’s total exports. Indeed if one looks at each of the last five years, the figures show a consistent increase in trade with Europe, and without exception the balance of trade is tilted in Sri Lanka’s favour. “

Sri Lanka’s largest trading partner in the EU is of course the UK. “Last year your exports to my country amounted to Pounds 804 million, a remarkable 14 per cent increase; remarkable because that was achieved despite the relative tightening of the UK economy.”

While no one should mourn the defeat of the LTTE, political reconciliation is a vital element in building a sustainable peace, he said. So too is economic development, creating jobs and opportunities for those who have been affected by conflict and for the next generations.

“In my most recent visit to Jaffna I was encouraged to see the physical development that is taking place there – new roads being built, an impressive new teaching hospital under construction, schools being reopened.” He noted that similar progress had been seen in the south as well.

“I know that a number of your businesses are now taking up opportunities in the north and east, from manufacturing to tourism development. I hope that you will be successful, providing training opportunities and employment for local people in the areas where you are located. Training young people across the country, giving them jobs and a stake in their communities can be key steps towards long term peace and stability,” Rankin said.