Private sector, not government, should lead economic development

United States Ambassador Robert Blake said the Sri Lankan government should allow the private sector to lead economic development and that government policies should facilitate private sector economic growth.

Addressing the 14th Business for Peace Forum on maintaining the balance of peace building and economic growth in Sri Lanka organized by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) recently, Blake added that the government should not be in competition with the private sector. He cited the successful privatisation of the telecom industry which attracted half of the US$700 million in foreign direct investment (FDI) last year. Blake stated that the government can best facilitate economic growth by creating incentives and 'getting out of the way.'

Blake insisted that a parallel political strategy as well as a military strategy is essential in ending the ethnic conflict in the country. Blake said that the US government believes that the Sri Lankan government must protect its citizens against terrorism and to that effect, the US is assisting with maritime radars to stop the flow of arms by the LTTE amongst other measures. He added that it is important that the vision of power is shared amongst all communities and that everyone has respect and a role in the development of the country.

Blake said the Sri Lankan government has made a good start by enforcing the 13th Amendment of the Constitution pertaining to the devolution of power. He also said he hopes that the All Party Representative Committee (APRC) proposal will meet the aspirations of all the ethnic communities and will mark an important step forward.

He also spoke on the importance of Public Private Partnerships (PPPs), in particular those between corporations and universities. According to Blake, a skilled and talented young workforce is Sri Lanka's most vital asset and PPP's can help create the talents of the people. Citing a World Bank (WB) study which concluded that Sri Lanka must develop a knowledge economy, Blake concurred with the WB findings that education, innovation and information technology is critical to the country's economic development. Furthermore, the WB also wants the government to improve the investment climate to attract more FDI, particularly in the telecom sector.

Blake said there were generous incentive packages for companies to invest in the East as stated in the National Budget for 2008. He added that there is a role for business and government in the East but that the government should listen to the advice from experts in the business community as they formulate plans and lead private sector growth.