Financial Times

“I will encourage foreign investment” - Mahinda
Prime Minister Mahinda Rajapakse says he would be a “Business and entrepreneur friendly" President if elected, fostering and developing national talent, entrepreneurship and resources of Sri Lanka’s economy, while encouraging foreign direct investment.

In a speech to local businessmen last Monday that was clearly seen as responding to critics of his economic policy which many perceive as inward-looking, the ruling party presidential candidate said there was no cause for alarm on his economic policies.

“Will the stock market crash if Mahinda Rajapaksa becomes President? Will large scale businesses suffer? What will happen to our businesses?” he said, noting that these were the questions being asked and doubts being raised.
He reminded the private sector that while he was PM and the JVP was a member of the government, the All Share Price Index of the Colombo Stock Exchange increased by 56%, average daily turnover rose by 87%, and the market capitalization increased by a massive 91%. “Obviously therefore, I do not think you really have a cause for any complaint or worry. However, just to clear the air, may I positively state that I would be a "Business and entrepreneur friendly" President who would do his utmost to foster and develop the national talent, entrepreneurship and resources of our economy, while encouraging foreign direct investment,” he said.

Excerpts of his speech:
Winds of change
I am conscious that globalization, liberalization, the impact of information technology and other strong winds of change are blowing across the world and as a small country, we need to turn our sails to move with those winds and currents.

However, in doing so, we need to constantly give a boost and an edge to our national entrepreneurs. After all, if we do not help them, who will help them? I would also like to state that the private sector of our country, which we are happy to identify as the "engine of growth", is a combination of the mega, large, medium, small and micro business organizations. Therefore, we will be committed to giving all such sectors the necessary attention so as to provide a competitive edge to our own national ventures and enterprises.

Target growth
As a target for growth, we will strive towards 8% annual GDP growth from 2006 onwards. In order to achieve such a target, we will support the mega and large scale businesses to expand their businesses and reach for the stars. At the same time, we will give the SME sector special attention with renewed vigour. Assuming that one of the main goals of our economy is to create two million new jobs over the next 6 years, and that 30% of all new jobs in Sri Lanka are to be created by SMEs, the new jobs that have to be created by SMEs in the next six years is 600,000.

This means that the SME sector has to create approximately 100,000 new jobs every year. In order to create the enabling business environment for the growth of such a number of SME's, we will focus on interventions which are necessary for the development of a balanced and fully integrated national economy.

We will therefore concentrate on the critical issues affecting SMEs, that includes access to finance, technology, markets, business advice, and improved productivity, industrial relations, and physical infrastructure.

Home-grown giants
Stronger sectors and players of our economy have become strong today due to the various inputs and assistance they have received from various quarters in the form of opportunities, access to capital, management expertise and business advice at some stage of their growth. That is why we have "home-grown" giants such as Hayleys, Maliban, MAS, Dilmah, Gnanam, Nawaloka, Upali, Maharajah, Brandix, Dasa, Siddalepa, Damro, John Keells, Selvanathans, Stassens, Jinasenas, D. Samsons, Thambaiyahs and others who are playing pivotal roles in our country's economy.

Through our efforts over the next 6 years, I would like to see many more Siddalepas, Dilmahs, Nawalokas and Damros emerging. I know there are many SME's out there who are waiting to be discovered, nurtured, assisted and propelled to greater heights.

Crime-free society
As leaders in the business community, I know you will want a crime free society and a society where law and order prevails, in order to promote business and development. Entrepreneurs as well as workers require a safe environment.

This is also paramount when it comes to women and children. It is the same in the case of foreign investors and tourists. Providing security for the people is a primary responsibility of the Government, and I shall take the necessary steps to ensure that we discharge this responsibility effectively.

I hail from a remote district. Most of us have our roots in rural Sri Lanka. Therefore, we all know that although Colombo has experienced vast development, it is not the same with our rural areas.

If so, while protecting our culture, environment, bio diversity and natural resources, we must be determined to develop our rural economy rapidly. Districts in the North, East, South and in the Centre need urgent attention.

North-East issue
A durable solution must also be found through negotiations, with regard to the conflict in the North and East. You would agree that such negotiations cannot be limited to a few stakeholders only.

Many stakeholders in our country have concerns and such concerns should be addressed if we are to find a durable and sustainable peace. This is why all parties need to be involved in a constructive dialogue towards finding a negotiated settlement, and I will do my utmost to work towards such an outcome.

My plea to all of you is don’t get misled by banner headlines and horror stories, whether it is in relation to the North East issue or the economy. I will follow a practical, pragmatic and fair path. I will not take this country to war nor to a closed economy. I will follow a policy of modernizing our economy. You all know that Malaysian Prime Minister Mahathir did not take all the advice given by liberal economic theorists. He followed an open economic policy with a national flavour and developed that country. In today's environment, Politics and Economics are based upon partnerships. I intend giving leadership to such partnerships to bring a diverse group of people's representatives together. If we all get together and agree on an agenda, then that agenda will be workable. Mere slogans make no sense.

Poverty-free tomorrow
As some may want you to believe, privatization of very large and strategic state enterprises is not the only option in economic development. We see government owned enterprises in many countries. Here in Sri Lanka too, while I will not privatize the state banks, ports, electricity, water, railways, etc., I will give these enterprises complete commercial autonomy to become efficient, effective and productive.

My vision is to see our country free from poverty. The entire country must have electricity, safe drinking water, a good transport system, good education and health and a people-friendly public service. Towards that end, I am putting together a team of excellent people who understand entrepreneurship, have business sense and have the dedication and goodwill to assist me in these tasks that I have outlined this evening. When selecting such persons, I will not be guided by their political leanings but only on their ability and dedication.

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