BPA says need for regional economic growth

The Business for Peace Alliance (BPA), a network of business chambers throughout Sri Lanka with a commitment to building peace and reconciliation, wants the government to take remedial measures to address the existing regional disparities.

The BPA points out that there are grave regional economic issues that deserve the immediate attention of the government. Among these are the inadequate investment promotion in the regions and the lack of infrastructural facilities. It is crucial that the regions are made accessible via ports, regional air ports, good road networks, etc in order to attract investment and create employment opportunities, it said in a statement.

It is a widely known fact that investment in the Western Province account for more than 50% of the Gross Domestic product (GDP). In the past 20 years or so investment and economic development has been largely concentrated on the Western Province resulting in the huge development disparity between Colombo and the rest of the country. The trickle-down effect of development has not reached the other parts of the country due to low connectivity between the centre and the peripheries.

While these conditions largely inhibits fair competition between businesses in the centre and the periphery, uneven development has resulted in alarming rates of poverty at the regional level.

The BPA calls upon the government to bridge the existing development gap by creating a levelled playing field.

The BPA also draws special attention to the socio-economic development issues in the war-affected North-East. It proposes that special incentives such as tax holidays and tax exemptions be given to the investors willing to invest in conflict and tsunami affected areas and underdeveloped areas.

These incentives should be similar to those offered to investors in FTZs. Similarly, the development of Industrial Estates such as the upgrading of infrastructural facilities in the Vavuniya Industrial Estate and commencing actual development of the proposed Industrial Zone in Jaffna are also of great significance to regional economic advancement.

The establishment of an Economic Centre in Vavuniya to support the entire Northern Province has also been proposed. Another proposal forwarded by the BPA is the upgrading of the A9 road to a highway connecting the Jaffna peninsula to the South. Also proposed is a two year tax holiday to tsunami-affected business so as to speed up the process of recovery.

The above issues have been underlined in the BPA’s proposals for the National Budget, 2007.