Financial Times

PM announces bid to revive SMEs in north-east

The government is trying to arrange a business forum in Kyoto especially for small and medium enterprises in mid-September, specifically designed to stimulate joint-venture opportunities for Sri Lanka's North and East, among other regions, Prime Minister Ranil Wickremesinghe said last week.

He was making the keynote address at the Business Opportunities Seminar that followed the aid conference in Tokyo attended by representatives from more than 30 countries and 20 institutions.

The private sector holds the key to the island's socioeconomic recovery, Wickremesinghe told Japanese businessmen.

"The public sector - combining the agencies and energies of my Government and supportive donors - must finance immediate relief and rehabilitation.

"But beyond emergency resettlement and repairs, sustained recovery and reconstruction will be private-sector-driven," he said.

"We look to private-sector productivity as the chief engine driving Sri Lanka's recuperation. International, diaspora and domestic investment can fuel that engine's acceleration."

International donors at the meeting in Tokyo pledged around $4.5 billion in aid to Sri Lanka over a four-year period, but tied disbursements to progress being achieved in the stalled peace process.

"It is important to note that a number of donors indicated that the disbursement of assistance would keep pace with substantive progress in the peace process," Yasushi Akashi, Japan's special envoy to Sri Lanka, told the final session of the meeting.

Prime Minister Wickremesinghe said Sri Lanka was seeking closer relations with Japan, "first through peace-building and reconstruction assistance, but for the longer term through private direct investment."

The Sri Lankan government is "vigorously" lowering regulatory barriers -- from corporate taxes to customs duties to labor constraints, he said.

"In the labor area, for example, reforms are in train to standardize fair termination practices, giving employers the opportunity to improve efficiencies and employees the resources to support themselves and their families while retraining."

Sri Lanka was also seeking to enter into economic agreements or Free Trade Agreements with major trading partners such as India and the United States.

"These bilateral bridges will open markets in two directions," he said. "Looking to India and the West, our plan is to develop Sri Lanka as a platform for competitive value addition.

Thinking geographically, we envision Sri Lanka as a logical regional hub for Indian Ocean trade and tourism."