Financial Times

Local industry marginalised in new development phase

By Quintus Perera

A top industrialist last week expressed common concerns about the disbursement of funds pledged at the Tokyo donor conference and whether it would benefit the economy and the country as a whole.

Felix Yahampath, President, National Chamber of Exporters of Sri Lanka, told The Sunday Times FT, that the 450-strong membership chamber consisting small, medium and large exporters were yet to get a copy of the government's widely spoken "Regain Sri Lanka" document.

"When such important public documents are not adequately publicized, it gives rise to hearsay and speculation which would create a lot of damage to the country," he said. He said if - as he is aware - all import duties on agricultural products are to be lifted under the new initiative, allowing a free flow of agriculture-related goods, it would kill the agricultural sector which is already ailing in this counrty.

Expressing concerns of local industry apart from exporters needs, Yahampath noted that one of the lapses of governments over the years is the lack of attention paid to local industry and not providing them adequate incentives to upgrade machinery and equipment and produce goods that would compete with imports. "In this context I find it hard to understand how a "Made in India" exhibition and Trade Fair is promoted and held in Sri Lanka when local industry is suffering. This is a signal to encourage more and more people to abandon local industry and import from India (and elsewhere," he added.

He said the other problem was that given the large scale of underutilization of foreign funds, there is a chance that this would happen again resulting in unutilized funds being diverted to another country. Some of the other issues he raised that was a source of worry to the industry were:

- How much of the US$4.5 billion is grant aid?

- How much of it would be used for the benefit and development of industry in Sri Lanka and also for export development?- There is some reference to assistance being given to small and medium scale manufacturers but we need to have some numbers.

Yahampath said local industry in the country was collapsing with several industries shutting down and some being auctioned by banks. "It is a very serious situation, because this means that all the people employed in those places would have lost their jobs." He was also worried that machinery in those closed down factories was being sold for scrap. He also expressed concern over plans by the government to lease 25,000 acres of land to the Norwegians to engage in cashew plantation. "This is surprising because I am not sure whether the Norwegians have this expertise compared to our producers." Yahampath suggested that the government should come up with blueprint with input from industrial chambers and civil society on industrialization in the country and where industry would be placed in the economic structure of this country.

Yahampath said that agriculture had great potential if the right policies were in place but everyone knows that farmers are a badly neglected lot, stressing the need to protect this sector for social reasons too.