I am honored to be elected, as the President of this prestigious Chamber for the second term, and I assure with confidence and pride that I will take forward the good work done by my predecessors to take the Chamber to greater heights.
I am taking over the Presidency of this Chamber at a very critical period for the world economy as well as the Sri Lanka economy. Sri Lanka economy is facing many internal and external challenges. I think it is pertinent to discuss certain post Pandemic global economic and geopolitical emerging issues which would have ramifications to developing world similar to us very briefly.
GOBAL ECONMOY AND LOCAL ECONOMY – Roadblocks and Sustainable Pursuits
It is expected that the global growth would reach 5.3 per cent in 2021, however, reducing the momentum 3.6 per cent in 2022. In 2020-22, it is estimated that the global economy faces a cumulative income loss of about USD 13 trillion. The expectation of inducement of demand stimulus and improving transformative public investment programmes in the medium and long run are restricted by increasing inflation expectation in developed and developing economies where US reaching inflation level of 7% after may be 40 years of history raising doubts whether such inflation may not be transitory in nature.
The international think tanks including United Nations recommend that conventional wisdom, which attempts to control inflation through wage reduction would not auger well for the sustainable development of the world economy at this juncture. Such agencies further warned that strategy adopted by many countries through slowing demand growth by putting stop to the stimulus packages would not stop inflation, since its source is imported inputs, including commodities.
The multilateral financial institutions have highlighted the fact that there is a compelling requirement to look at current issues in a different angle where simple market operations proclaimed by the conventional wisdom may not provide solutions to such issues; hence, need to embark on big spending programmes, initiatives to tax the rich and curtail the power of monopolies, recognition of the role of targeted capital controls, an endorsement of a strongly interventionist policy agenda to take care of green investment push.
The developed countries have been able to take care of such aspects through increase of financing due to their privileged status of issuers of international-reserve and trade currencies whereas developing countries are not in a position to adopt such strategies continuously without having complicated economic impacts. Therefore, developing countries are encountered with more immediate and serious challenges where their restrictive fiscal space, ever increasing debt burden and failure to implement sustainable vaccination programme for Covid19 having serious divergence and enlarging difference with their developed counterparts.
UNCTAD (United Nations Conference on Trade and Development) in their recent publication, Trade and Development Report 2021, critically examined current challenges encountered by developing countries. They are of the view that building protection against the vagaries of global finance is critical for developing countries and it is required to start with a proper evaluation of sovereign and private debt burdens and repayment profiles, which affect development strategies but also crisis response. Even though they recognize that debt re-profiling and relief, including debt cancellation, are necessary, they further emphasized that the multilateral relief provided by IMF through cancellation of debt service obligations and the expansion of SDR allocations between April 2020 to October 2021 has been insufficient and only a symbolic measure.
UNTACD further commented that developed countries having similar debt ratios to developing countries also have been able to weather through issues and recorded positive economic growth thanks to their ability to issue reserve currencies.
Globally, several issues continue to gather growing priority: the focus of the G20 is on the importance of initiatives such as, inclusive collaboration, global health, digital transformation and sustainable energy. The focus of the UN and its sustainable development goals remains on alleviating poverty, which requires strong radical focus on improving health and education sectors, on reducing inequalities, and in putting into action measures and solutions to tackle climate change, to protect our planet’s natural resources and biodiversity.
However, businesses are not only responsible for creating economical value for stakeholders, but are increasingly expected to adapt to these global demands and adopt inclusive, equitable and collaborative efforts in creating sustainable growth for people and the planet.
For Sri Lanka, there are several major roadblocks that need to be dealt with before we persistently contribute to these global agendas. The nation was gutted by safety and health concerns, however, has been able to manage rapid vaccination program successfully, slowdown of commercial activities and tourism due to the pandemic; in addition to these, the country’s debt vulnerabilities and dwindling Forex reserves made a deepening chasm in economic progress and social development. Nevertheless, the country is gradually dealing with each challenge, pressing on despite impediments.
As depicted in The Vision of National Chamber, to be the leading source of services and assistance to businesses countrywide for promotion of domestic and foreign trade with special emphasis on the development of Micro, Small and Medium Enterprises. We have carried out many activities as I will discuss.
PROMOTION OF INTERNATIONAL TRADE AND INVESTMENTS
The National chamber strongly believes in creating connectivity between local entrepreneurs and international markets where we need to find national and international market opportunities for MSMEs in the country. We understood the importance of conducting virtual B2B meetings with the support of our diplomatic services and foreign ministry together with our linkages with other Chambers throughout the world in the absence of available opportunities in exchanging trade delegations physically due to prevailed Pandemic situation during last year.
We have already concluded several B2B virtual Business Forums with Turkey including Adana Chamber of Commerce and Adana Chamber of Industries with the participation of more than 60 companies from both sides. We have further signed MOUs with other regional chambers in Turkey such as Sinop Chamber of Commerce, Aegean Chamber of Commerce and Erzurum Chamber of Commerce and Industries as well.
We have signed MoU with the Oman Chamber of Commerce and Industries and conducted a business forum with the participation of government authorities from both sides and a B2B meeting virtually, bringing in more than 50 business companies together.
Chamber has been able to conduct a Business Forum with Japan with the support of Sri Lankan Embassy in Japan, Japanese Embassy in Colombo, and the Sri Lanka Business Council of Japan. More than 60 Sri Lankan companies were connected for the business forum.
We further conducted a virtual Business forum and B2B meeting with Kuwait Chamber of Commerce and Industry with the participation of BOI, EDB Sri Lanka and their counterparts in Kuwait. More than 40 business companies participated for the virtual B2B exercise.
Even in the midst of Pandemic threats, Chamber has been able to welcome 18 member south Indian power-loom sector business delegation visited the chamber who are interested in investing in Sri Lanka and managed to conduct physical meetings with delegation from Hungary with 14 Hungarian companies connecting over 45 Sri Lankan companies with them on B2B physical interaction in January 2022.
Chamber signed a MoU with Union of Asian Chambers (UAC) of the Confederation of Nepalese Industries (CNI) in October 2021.
We were able extend our cooperation for the virtual Bangladesh Trade and Investment Summit took place in October last year in the strength of our existing MoU with Dhaka Chamber of Commerce and Industry.
Support Extended by Sri Lankan Missions overseas
We are happy to place on record that the supports extended by Sri Lankan ambassadors in other countries are commendable. We appreciate support extended by our ambassadors and commercial officers in Turkey, Japan, Oman, Kuwait, UK USA, Russia and Nepal. We also would like mention the enthusiasm shown by our own business community in these activities were overwhelming even during the pandemic period.
Support Extended by the Government authorities
It is noteworthy that all the activities carried out by the National Chamber were well supported by government entities such as EDB, BOI, Colombo Port City, Department of Commerce, Foreign Ministry, Ministry of Industries and National Enterprise Development Authority (NEDA) etc.
Commercial Officers posted to our foreign missions out of Sri Lanka
As a part of regular activity of hosting commercial officers posted to our foreign missions out of Sri Lanka, officers assigned to Bangladesh, Belgium, France/Paris, India/New Delhi, Malaysia/Kuala Lumpur, Pakistan/Karachi, Singapore, Sweden/Stockholm, Thailand/Bangkok, USA/Los Angeles, USA/Washington DC were invited for an online meeting which was open to business community both corporate sector and regional MSMEs with an objective to support much needed exports and FDI for the economy.
REGIONAL INTEGRATION AND SME DEVELOPMENT
Western Province Entrepreneur Awards
Chamber together with NEDA (National Enterprise Development Authority) hosted the annual “Western Province Entrepreneur Awards” designed for Micro, Small, Medium and Large sector entrepreneurs in the Western Province last year. We believe that the Award Ceremony encourages entrepreneurs to develop their business processes and functional areas of business, taking into consideration the behavior of those that have succeeded. It is noteworthy that presence of women entrepreneurs has gone up significantly in the recent past where 17 women entrepreneurs managed to secure awards out of 24 awards.
Meeting District chambers and Provincial Chambers
We always wanted to have very close interaction with all the district and provincial chambers in Sri Lanka in our efforts towards the SME and regional development of the country. While we are integrating them in our development activities, I have started personally visiting them where I have already met, Lanka Business Ring (LBR) in Kandy, Jaffna Chamber of Commerce and Chamber of Commerce and Industries of Yalapanam last year and Galle District Chamber of Commerce and Industries, Matara District Commerce and Industry and Hambantota District Chamber of Commerce during January this year. I am planning to visit rest of the district and provincial chambers in the country in the near future.
Partnering with CA Sri Lanka SME task force
National Chamber is proud to be a partner with the CA Sri Lanka SME Task Force, with the objective of securing professional Accountants to mentor Micro and SME businesses throughout the island and Chamber was able to partner with CA SME Taskforce launch of mentoring programme in Jaffna during November 2021 when easing off of pandemic conditions allowed to conduct such a launch physically.
To be continued
Placing SL as a world class logistics hub: the challenges
By Lynn Ockersz
‘Sri Lanka’s proximity to emerging and developing markets and its already developed air and seaports in Colombo and Hambantota gives it a unique opportunity to be the next leading logistics hub in the region, with the potential to overtake Singapore and Dubai, if the cards are played right and the right governance and Ease of Doing Business regulations are handled sensibly, logistics and supply chain specialist Sanjeeva Abeygoonewardena (SA) said.
Abeygoonewardena made the above observation, among several others, while presenting an issues paper on Sept. 18 at a Sri Lanka Innovators’ Forum, functioning under the aegis of the Gamani Corea Foundation, Colombo. The event was chaired by the chairman, Gamani Corea Foundation Dr. Lloyd Fernando and was held at the BMICH. The paper was titled, ‘Shipping & Logistics, the Promising Frontier – Innovation-led Logistics Hub.’
Responses to SA’s paper came from a panel of specialists in logistics and allied disciplines, representing the state and private sectors, with Prof. Amal Kumarage, chairman, Chartered Institute of Logistics & Transport, Sri Lanka, functioning as moderator. The rest of the panelists were: Messrs. Rohan Masakorale, Krishantha Fernando, K.D.S. Ruwanchandra, Ports and Shipping Ministry Secretary, and Ted Muttiah.
Some of the recommendations made by SA for the elevation of Sri Lanka as a number one logistics hub were as follows:
Establishment of rail and water networks from the seaport that will enhance and support the strength of Sri Lanka’s local connectivity.
Establishment of an International Maritime Centre, providing services for ship management operations and other value-added activities that will pull liners to Sri Lanka.
Sea-air hub connectivity must be streamlined, enhancing the efficiency of a single customs bonded platform via the single window concept.
More advanced abilities leveraging AI robotics and frontier technology to provide more value-added services at the hubs to support single-window and trade facilitation portals.
Skilled logistics professionals and an educated workforce through a Maritime and Logistics Campus will boost the growth of the local logistics industry.
Governance framework through a Collaborative Council of private-public officials who will act as custodians to carry out the national roadmap as a national logistics and transport services policy.
Invest in a consulting firm that can facilitate a capacity-building programme on improving Ease of Doing Business, Economic Freedom, Logistics Performance Index and Corruption Perception Index across schoolchildren and business councils that will create better awareness for the future.
A point that was emphasized by most panelists and participants in the lively and wide-ranging forum that followed the presentation of the paper was the need for the Sri Lankan polity to think beyond self and short term interests. There is an urgent need to prioritize the future well- being of the country over the gratification of immediate, selfish interests.
Rohan Masakorale, among other things, focused on the problem of bribery and corruption. It is difficult to achieve anything without greasing palms. There is also no leadership worth speaking of in Sri Lanka, he pointed out. These problems need to be eliminated. Local education needs to be upgraded and we need to achieve the standards obtaining in countries such as Singapore. His views found resonance with many in the audience.
Krishantha Fernando drew attention to the fact that local logistics development plans have a short term focus. There is a need to eliminate paper work in this context and to fast track planning processes. The Port Community system is vital he pointed out, among other things. K.D.S. Ruwanchandra pointed to the need for a system change in the logistics development field. In this context, the state agencies are working in a ‘crisis situation’. The proper legal frame work is being evolved by the state to resolve outstanding issues in this connection. Capacity improvements are being prioritized in the logistics field. There are considerable problems in most public spheres that need resolving.
Ted Muttiah stressed, besides other things, that although much has been achieved in the logistics field in the past there is a need to bring them all together, going forward. It was pointed out that port capacity takes years to build.
Dr. Lloyd Fernando questioned as to whether the country has a national plan. Do we have an effective system of governance? However, we need a holistic approach to national development. A prime need in this connection is to evolve a holistic plan within the logistics sector which would in turn be connected to a national plan.
Sri Lanka’s battle against NCDs: Is the Sugar-Beverage Tax doing enough?
By Priyanka Jayawardena
Non-communicable diseases (NCDs) lead to around 120,000 deaths in Sri Lanka each year, constituting 83% of the overall recorded deaths. The revised National Policy and Strategic Framework for the Prevention and Control of NCDs is a positive initiative by the government to address this. Such policies can play a crucial role in promoting healthier lifestyles, preventing NCDs, and improving overall public health. However, the question that lingers is, how effective are the existing measures, and where can we make improvements?
In the battle against NCDs, the government implemented a crucial policy in 2017 – the Sugar-Sweetened Beverage (SSB) tax. This tax aimed to curb the consumption of SSBs closely linked to health problems like obesity, diabetes, and dental issues. While this measure holds great promise, evaluating its effectiveness is difficult owing to data gaps. However, an IPS analysis of how SSB taxes are helping to reduce their consumption in Sri Lanka provides some initial insights.
The Case for Taxing SSBs
According to WHO 2019 estimates, diabetes is the second highest cause of death in Sri Lanka, accounting for 12,460 deaths. As rates of obesity and diet-related NCDs continue to increase, significant attention has been given to reducing the daily intake of sugar.
Taxing SSBs is a globally recommended option among evidence-based policy options to improve food environments. Research suggests several reasons for taxing SSBs, compared to other food products that contain free sugars. This is primarily due to the observed association between SSBs and NCDs, their high sugar content, and very little nutritional value.
By making these beverages more expensive, governments aim to discourage their consumption, ultimately leading to better public health outcomes. Beyond the health benefits associated with reduced SSB consumption, SSB taxes also raise revenue. When introducing the SSB tax in 2017, the government forecasted LKR 5 billion in revenue in 2018. Therefore, these taxes are recognised as a sensible way of reducing the incidence of NCDs.
Sri Lanka’s Sugary Drinks Tax
The effectiveness of the SSB tax can be influenced by its structure and rate. Higher tax rates are generally more effective in driving down consumption. In Sri Lanka, the SSB excise tax is imposed as a specific tax – i.e., applied on sugar content per 100 ml. By imposing higher costs on these beverages, the government intends to deter their consumption.
However, there is a factor that often goes unnoticed but can significantly affect the impact of SSB taxes – i.e., inflation. As the general price level of goods and services rises over time, the purchasing power of money decreases. This means that the same tax rate applied today might not have the same “real” value in the future due to the diminishing value of currency caused by inflation. On the other hand, as people’s average income per person goes up over time, specific tax rates have less impact over time.
Examining the timeline of SSB tax implementation in Sri Lanka reveals
SEC makes four new senior appointments
The Securities and Exchange Commission of Sri Lanka (SEC) is pleased to announce four new senior appointments with diverse backgrounds to leadership positions to fulfill its regulatory and developmental mandates.
Ms. Manuri Weerasinghe has been appointed as Director, Corporate Affairs. She has over 20 years of experience in the fields of Accounting, Financial Management, Financial Reporting and Auditing with over 8 years’ of experience at the SEC. She is a Fellow Member of CA Sri Lanka, member of the Chartered Institute of Management Accountants and a member of the Certified Practicing Accountants of Australia. Her academic credentials include a Master of Business Administration and a BSc (Hons) in Accountancy & Financial Management (Special). Prior to joining the SEC, she had served in several financial management positions in Bermuda and Sweden.
Madura P. R. Wanigasekara has been appointed as the Chief Digital Officer. He has a career spanning over 20 years in delivering and managing IT solutions, has held several senior management positions in both the public and private sectors. He has vast experience in formalizing and implementing organization-wide IT strategies and has a proven record of accomplishment in delivering many digital transformation programs. His academic qualifications include a Master of Science in Information Technology from the University of Colombo and a Bachelor of Information Technology from the Curtin University of Technology. He is also a member of the Australian Computer Society (ACS).
Ms. Sharmila Panditaratne has been appointed as the Assistant Director, Legal and Enforcement. She is an Attorney-at-Law with over 21 years of experience as a securities market regulator. Previously she held the post of Senior Manager Legal and Enforcement at the SEC. She holds a Master of Laws degree from the University of Houston, Texas and has worked at two law firms in the USA prior to joining the SEC.
In addition, the SEC has appointed Riyaz Bary, Deputy Solicitor General at the Attorney General’s Department as a Director on secondment basis.
These appointments are expected to increase the effectiveness of the SEC secretariat in the respective operating areas.
Nepal smash records with fastest century and fifty in men’s T20Is
Train services on coastal line delayed
Trump liable for fraud, judge finds in New York civil case
‘Dates have the highest sugar content to fight Coronavirus’
Sunday Island 27 December – Headlines
#Sundayisland Sunday Island- 31 January- Headlines
Sports6 days ago
Selectors make ‘U’ turn after requesting Shanaka to step down
News5 days ago
In terms of RTI Act House releases names of MPs who voted for new law
News3 days ago
Business focus shifting in a more favorable direction
Business3 days ago
SLT-DIGITAL Services and Surge Global forge strategic partnership to propel growth marketing and develop enterprise software solutions
Business6 days ago
David Cameron to address Port City Colombo UAE Roadshow
News3 days ago
No new date yet for AL exam, postponement to have knock on effect
Features3 days ago
PAMANKADE -THE TOWN THAT VANISHED !
News2 days ago
US delaying visa for Security Oversight Committee head