Chris Dharmakirti, a board member of government agency SEMA, has written to the Business Times (BT), clarifying his position at a recent seminar on CEPA which was the theme of last week’s editorial comment in the BT under the above heading.
“At the very outset of my presentation at the COYLE seminar, I categorically stated that I am attending it as a private individual and not as a representative of SEMA. All the board members of SEMA, including myself, with the exception of Dr. William Gamage, are from the private sector, and serve on the Board of SEMA as independent directors on SEMA. I served my term as COO of SEMA for a period of two years from 2006 to 2008, as requested by my colleagues to provide board oversight to the executive staff as a working director. I am no longer COO, and now only a board member of SEMA currently.
With respect to the views expressed by myself at the COYLE seminar, in summary the gist of the points I made are as follows:
1. The "rights and privileges accorded to overseas investors to dominate lucrative local raw materials and resource inputs based industries and services" in the draft CEPA agreement places the local investors and Sri Lankan enterprises and entrepreneurs at a disadvantage to compete on a level playing field basis, and therefore, the proposed timing (2008 / 2010) signing of it at this point in time in history is not appropriate, as the local enterprise balance sheets are not strong enough to raise requisite equity and debt finance to develop the local resource based industries.
2. Sri Lanka has just emerged from a 30-year war, and local entrepreneurs and enterprises need a minimum five year period to build the strength of their balance sheets in order to be able to compete with international investors to develop local raw materials and resources based export industries, as there are no "sectoral caps" in Sri Lanka like in India, protecting those lucrative industry opportunities for local investors.
3. Furthermore, even with respect to domestic market focused industries, Sri Lankan entrepreneurs need time to establish new products, brands and their distribution channels for the new categories of products and services that would be in demand given to emerging new status of Sri Lanka as a "Middle Income" nation, and this rising new level of disposable income would usher in new market opportunities. Therefore local companies that are just emerging from a restricted market to an "all-island" market, need time to establish themselves without surrendering the inevitable market opportunities to Indian companies that have the benefit of price given their home market scale and "dumping" could happen. Sri Lanka's trade mandarins are yet to come to grips with the sophisticated legal regimes that needs mastery to counter "dumping" and thus, even from a institutional capacity basis, Sri Lanka needs time to develop her skill sets..
4. To build the balance sheet of Sri Lanka Inc., our nation needs to reserve the most lucrative natural resources linked industry opportunities for local entrepreneurs, otherwise, Sri Lanka would never be in a position to dominate a product segment in the global market beyond the current portfolio of products of fickle industries like garments that would eventually succumb to "shifting sands of lowest cost production centers". Sri Lankans would remain forever marginal players with the most valuable multi-billion and trillion-dollar industries that could get created out of our Titanium, Thorium, Silica, Graphite, Wind, Otec, and other very high value rare earths’ industries being foreign-owned.
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