Ceremonial Session of the 57^th AGM of the National Chamber of Commerce 13 January 2016 at Kingsbury Hotel, Colombo

 Speech by the President of the National Chamber of Commerce – Mr. Thilak Godamanna

It gives me great pleasure to welcome you to the Ceremonial Session of the  57^th AGM of The National Chamber of Sri Lanka.  and address you as the 31^st President of the Chamber.

I have stated about the Chamber’s achievements during last year in my report in the Annual Report of the Chamber.

As per the World Bank information, Sri Lanka is focusing on long-term strategic and structural development challenges as it strives to transit to an upper middle-income country, by attracting investment, heightening human capital, enhancing the role of the private sector, including the provision of an appropriate environment for increasing productivity and exports are among the key challenges.

Economic growth in Sri Lanka has been among the fastest in South Asia in recent years. Growth averaged 6.3 percent between 2002 and 2013, and Sri Lanka should try her level best to keep the same momentum. While the national unemployment level is around at 4.4 percent, there are many districts that report unemployment rates that are higher than the national average.

As a part of Sri Lanka’s structural and economic transformation, employment in primary agriculture will likely continue to decline, from its present share of 30 percent of the labor force, as other sectors of higher productivity will absorb rural surplus labour. At the same time, along with productivity increases, agriculture is likely to become more capital intensive and technology-driven as labour shortages emerge. This was also addressed at the Sri Lanka Economic Forum held last week.

As indicated by the National Chamber on  many occasions, improving the quality of human capital through effective education and skills development is essential  for Sri Lanka’s economic growth and competitiveness. Continued growth will also depend largely on encouragement of private sector development and private investment, especially increased FDIs. Sri Lanka has better prospects in getting technology and innovation through FDIs.

The National Chamber Welcomes Economic Policy outline of the Government.

The National Chamber appreciates the measures taken by the government on sustainable economic policies which would be beneficial for the country. Even with unfavorable global economic conditions, the government’s determination in strengthening the local economic growth and stability is much appreciated.  

Promoting Innovation and productive growth, efforts in generating of one million job opportunities in the Private Sector, enhancing income levels, development of rural economy, ensuring land ownership to rural and estate sectors, creating a wide and a strong middle class, creating the background needed to enter the global value system are much appreciated. Encouraging small and medium and large scale farmers and entrepreneurs to participate in the global economy, encouraging competitive international organizations to invest in Sri Lanka, promoting the digitization of the economy and encouraging local investments are also commendable.

Tea, rubber and paddy are considered to be critical agri products in our economy and the National Chamber welcomes quick measures to be taken to solve problems faced by these sectors, and developing  these sectors will have greater positive  impact on our economy.

Export Development

It is a fact that our country is import- dependent and we always have a negative trade balance, mainly due to high oil import bill. It is mainly through the private remittances that we manage to ease out  the situation to an extent. We  will have difficulties on private remittances as well, mainly due to unfavorable economic situations  in middle eastern countries. We are hopeful that low oil prices should have a positive effect and the administrators should manage this advantageous situation for the benefit of the country.

In order to develop exports in the country more and more incentives should be provided for export oriented manufacturing. Further, export friendly freight charges would  also be helpful to boost the sector. We should study what the competing countries are offering to strengthen their export markets and take proactive action to compete.

CEPA and ETCA

The National Chamber took considerable initiatives with regard to CEPA agreement which was to be signed between  India and – Sri Lanka.  We organized a debate among business leaders with the intention of giving  equal opportunity to businessmen who are supporting and opposing the CEPA. We went to the extent of inviting the economists like Dr Harsha De Silva for the deliberation.   

Same way we would like to discuss the business aspects of Economic & Technology Co-operation Agreement (ETCA) between India & Sri Lanka.

The present status of Indo Sri Lanka Free Trade Agreement and the impact of the same to the economy of Sri Lanka should be carefully evaluated.

 It is now very clear that Indo – Sri Lanka FTA signed on 28 December 1998 will be part and partial of the new agreement (ETCA) that is  to be signed soon.

The National Chamber is seriously concerned of tariff liberalization programme and the preparation of negative list of the parties under this Agreement.

We would like to draw the attention to the fact that Sri Lanka does not have anti-dumping regulations implemented in this country. Under this situation, the Sri Lankan economy can face serious difficulties and even cause serious damages which we believe cannot be recovered easily.

Additionally, Sri Lanka should be more concerned of application of preferential safeguard measures in order to protect the Sri Lankan investors.

Furthermore, the National Chamber believes that the authorities should pay  considerable attention to trade in services and take measure to protect the economy from possible large scale interventions into Sri Lankan economy by Indian Companies who have the advantage of economies of scale.

Improving Global competitiveness of Sri Lanka and doing Business environment

Under global competiveness report, the economic aspects such as Institutions, Infrastructure, Macroeconomic Environment and Health and Primary Education are considered as Basic requirements of an economy.

Higher Education and Training, Labour Market Efficiency, Financial Market Development, Technological Readiness and Market Size are recognized as the Efficiency enhancers of an economy.

Innovation and Sophistication are also considered to be the  key   for further development of the economy.

Whilst concentrating on all the aspects mentioned above, Sri Lanka should consider paying more attention to efficiency enhancers, Innovation and business sophistication with the view of further developing the economy.

It is important to note that Governments have a vital responsibility in providing a vibrant & sustainable environment for private sector to grow. Without good rules, that are consistently and equally enforced, entrepreneurs have a harder time starting and growing the small and medium-size firms that are the engines of growth and job creation for most economies around the world.

When we look at in a broader manner, starting a business and employing workers,  dealing with construction permits,  getting electricity, registering property, getting credit, protecting investors,

paying taxes, trading across borders, enforcing contracts and resolving insolvency should have very efficient processors so that businesses could start and function  smoothly. Thereby the ranking of Sri Lanka’s doing-business index could go up in the world ranking and Sri Lanka would be an attractive place for investment.

The efforts taken by the Minister of Finance Hon Ravi Karunayake is commendable, in resolving doing business related problems faced by the business community at large. It is noteworthy that   many of our business leaders are having faith on the said process.

As a country, we should not  forget the fact that we have to compete with the neighboring countries like Myanmar, Vietnam, Bangladesh  and India  in attracting the FDIs to the country.

The Chamber made much  progress during the last few years. We hosted a large number of foreign delegations and signed many MOUs with foreign Institutions, we completely revamped the National Business Excellence Awards to be on par with similar international awards, conducted the Ayurveda Expo 2015  International Trade Fair & Exhibition with over 45,000 visitors; held a large number of seminars  to educate our members, and conducted many  comprehensive training  programmes for SME development .

Because of the climatic changes, our country experienced excessive rain during last year and it is predicted that we will have to face a worst drought this year. Therefore I propose that we should start rain-water-harvesting. To do this, I believe that the government should financially help the house owners by providing at least 59% of the capital for such efforts and encourage the private sector by offering soft loans. Such a practice was adopted by the Queensland Government during their drought in 2007, and it was a success.

The climate change will be a bigger issue for the whole world during the ensuing years and the participating countries  agreed at the Paris Conference (COP21) to collectively curtail global temperature increase, while urging efforts to  limit the increase to 1.5 degrees. In this respect our President, who was also a participant at the conference, inaugurated a program called “SRI LANKA NEXT, The Blue Green Era”. More awareness of this program is needed. We will do our best to take this program to all our members. As an initiative we have printed our entire Annual Report on environmental friendly re-cycled green concept paper which complies with all European Standards.

Further, I hope to hold an all-island Art Competition for school students from year 9 and above and an open Art Competition on the topics related to the ECONOMY and THE DEVELOPMENT of the country. Thereby we hope to promote awareness among the school children about the Chamber’s involvement to the country’s Economic development and improve the students’ economic knowledge thereby. We also wish to promote more and more ethical business practices among our member companies and the SMEs.

Finally, I am proud to announce that we will be engaging in promoting SMEs e-commerce and  e-marketing for women and differently abled  entrepreneurs.  This program was possible because the Australian-Aid chose our chamber as their partner and funded it. The first program will be held in Trincomalee this month.

In conclusion— What is unique about our Chamber is that it still has as its primary focus on the development and upliftment of truly Sri Lankan businesses in Sri Lanka. This was the primary objective of our founding fathers and will continue to be so.

Thank you.

Speech in Sinhala – Download