Financial Times

FTAs will destroy local industry
Small scale industrialists have expressed concern over old and in-the-offing free trade agreements between Sri Lanka and other countries, saying they would destroy local industries - similar to what the open economy has done in the past two decades.

Keith Sumanasena, President of the Sri Lanka Chamber of Small Industry (SLCSI) - joined by the new executive committee of the chamber - told reporters that an assessment of the Indo-Lanka FTA shows that more benefits were gained by India. He said that these matters have been raised with the Ministers of Finance and Industries. Indian investors who come to Sri Lanka to promote their industries didn't show much interest in joint ventures with local counterparts until the FTA came along. He cited the rubber industry as one of the industries affected adversely, like the manufacture of bicycle tyres etc.

Sumanasena told reporters that though their organization represented small industries, their contribution to the country's economy has been tremendous. He said the authorities have neglected the infrastructure required for industrial development and didn't provide better loan facility terms.

Though industry was pressing for low interest rates and while it was agreed in principle, most of the commercial banks have not reduced the loan interest rates. He urged government policy makers to ensure interest rates fall to 2.5 to 4 percent. The other problem is that banks require immovable property as collateral to provide loans.

Vice President, Walter Gunawardena said that to improve productivity at the industry level, there should be good management, a skilled workforce and access to correct technology and marketing. He said they have prepared a 'White Paper' for the small and medium enterprise sector development and presented it Prof. G.L. Peiris, Minister of Enterprise Development, Industrial Policy and Investment Promotion.(QP)

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