Many unresolved trade hurdles blocking business growth: importers

23 July 2015 06:30 pm - 0 - {{hitsCtrl.values.hits}}

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Following is the speech delivered by Ceylon Chamber of Commerce (CCC) Import Section Chairman Dinesh de Silva at the 80th Annual General Meetingof the Import Section of the CCC recently, at Hilton Colombo Residences.

Our chief guest today, FinanceMinister Ravi Karunanayake, our guest of honour Sri Lanka Ports Authority (SLPA)ChairmanDr.LakdasPanagoda, ministry officials, officials from the Customs and SLPA, invitees from other government authorities, CCCSecretary General and Deputy Secretary General, past presidents, distinguished invitees, ladies and gentlemen.

It gives me great pleasure to welcome all of you to the 80th Annual General Meeting of the Import Section of the CCC. This is a significant year to the Import Section as we are reaching a milestone in our journey of completing 80 years on November22, 2015.

Accordingly, it is with great pleasure I declare that the Import Section’s 80th anniversary is open from now onwards and the Import Section has lined up a series of special events to commemorate this landmark occasion.

The main celebrations will be held on November 24, 2015, at 7:00 p.m., at the Balmoral Ballroom of The Kingsbury Hotel, Colombo.

On behalf of the Import Section, we invite all members to participate in this occasion and the secretariat will circulate further details in due course.
Ladies and gentlemen, during our 80-year-old journey, our predecessors have contributed immensely to solve industry matters which had given so much comfort for the importers to carry out their business today with great ease. But due to the behaviors of the global and local economies, we cannot be complacent with what we have achieved so far. It is clear that our present challenges are different to what we faced years ago.

The Sri Lankan economy grew at 7.4 percent last year and this year first quarter the economic growth was 6.4 percent and the forecast is to grow more than 7 percent this year. No doubt we must grow year-on-year. Sri Lanka’s 2015 Ease of Doing Business rank is 99 out of 189 countries whilst we were 105 in 2014. This indicates an improvement of six places. Our Logistics Performance Index rank was 89 in 2014 and hope in 2015 that too will improve.

Looking at these rankings, it is very clear the opportunities and also the challenges ahead of us.

Minister, we, in the private sector, are very keen to grow and as the Import Section on behalf of trade, has tremendously supported the authorities all along to simplify procedures and remove all non-value-adding trade barriers. With your interim budget proposals, your initiative of allowing the Customs and SLPA 24 x 7 has been a revolutionary change and I strongly believe that our trade greatly appreciates it.

Unresolved hurdles
Sir, there are many unresolved hurdles we have in trade that are blocking the business growth. In many areas, we have been working for many years and with your support, we hope we can certainly fast-track and solve some of the current key issues without delay.

To formalize the Customs 24-houroperation along with other connected authorities
To establish 24 hours online payments to mainly to the Customs and SLPA without restricting the facility to a few banks
To have clear guidelines from DGMS on ‘Delivery Order Fees’ and to have a structured mechanism or to establish a high-powered committee to handle trade disputes
Eliminating grey imports into the country, which hamper genuine importers and cause loss of revenue to the country
To establish a transparent/hassle-free valuation system
Implementation of Single Window concept
Submission of electronic/online manifest to the Customs/SLPA, supporting advance shipment clearance
Required amendments to the Customs Ordinance and SPLA Ordinance, acceptance of e-signatures and overall supporting e-commerce

From the SLPA Chairman,

Trade does not expect any disruption from port-connected services, like sudden work stoppages by transporters
Cargo de-stuffing delays due to equipment shortages
Shortage of warehouse space and delays in de-stuffing of LCL cargo within 24 hours
Formalize clearance of Dangerous Cargo during 24 hours
Clear bottlenecks at the gates for cargo to move out freely
Increase cargo scanners for faster movement of goods out of the port

Improvement of all these areas is certainly critical as every inefficiencyadds cost to the products and in turn affects either the cost of living or in the case of re-exports, competitiveness in the global markets. We are aware that work has already started in many areas but all of these have to be fast-tracked to protect the existing business and also the small and medium enterprise (SME) sector to grow with ease for the future.

While these can be considers as short term, importers in trade expect the government policies to be more long-term and consistent. Trade needs the market confidence to make decisions on investments and to implement business expansion strategies. This is also one of our key concerns always.

Therefore, the Import Section tirelessly works with the relevant authorities to ensure the basics are right and they are in place. Needless to say, import trade has a direct bearing on the government’s policy changes - especially import restrictions, sudden duty and tariff revisions or effects due to bilateral and multilateral free-trade agreements (FTAs), etc.

We, the Import Sector, contribute to the economy in three key areas:

Imports as a value adder to the Sri Lankan economy
Imports as a revenue earner to the economy
Imports as a growth facilitator in the economy

Need for consistency
It is important to note that Sri Lanka has a larger import share and therefore the role of importers continues to be significant and is vital for the economy to sustain its current stability and to have long-term growth prospects. It is observed that any developing economy in its early stages will record imports-driven growth or an imports-intensive growth.

Therefore, our import trade is always watchful as to how the government is contemplating in cutting the trade deficit. We urge the decision-makers to be mindful of the importers who stillform a major part of Sri Lanka’s economy in many ways. Also, we are happy to see the growth in the export sector and strongly feel that it should be more diversified speedily. The Import Sector will be always hopeful that the government will engage in a wider consultation process with the sector and to be more consistent on trade and tariff policies enabling the business sector to invest on sustainable business ventures.

The Imports Section of the Ceylon Chamber of Commerce consists of over 128-member corporate companies representing a cross section of all sectors and function directly as one of the trade sections of the CCC. We follow our vision to be the most influential and effective voice of the importers in the business community. To this effect, our 16-member executive committee takes over several key areas of importance to importers under different sub committees, such as Sri Lanka Customs and Ports, Import Tariffs and FTAs, EDI Development, Trade and Finance, Shipping, Strategic Issues; which are some of our key focus areas.

We will continuously work on and we look forward to working with the authorities closely on the unresolved matters to resolve them successfully. We assure our fullest co-operation for all positive changes taken by the policymakers. At the same time, we have experienced situations of having ad-hoc implementation of duties/taxes, which have heavy impacts on businesses, which do not give confidence for businesses to make long-term decisions without much hesitation.
Further, under the infrastructure development, the government’s initiatives of having air and sea port development projects, promoting hub concepts and developing highway projects are certainly benefitting the trade to grow.

Finally, importers will be always concerned over having simplified consistent duty/tax systems, a free and fair trading environment to compete in the markets to contribute to the growth of the national economy, tariff structures in Sri Lanka to be in line with regional structures as high tariffs create gray market activities by undervaluation, entry of poor quality goods and finally loss of government revenue through such activities.

I would like to take this opportunity to appeal to the officials of the government, Sri Lanka Customs, Sri Lanka Ports Authority, Sri Lanka Standards Institution, Import Control Department and the other authorities involved in the facilitation of trade to understand today’s business environment and to have a more open consultative mechanism with trade associations like the Import Section and cooperate with the private sector in order to improve the effectiveness and efficiency of trade operations.

Ladies and the gentlemen, I wish to assure you that the Imports Section will serve as a platform to support our member companies and trade by providing a forum for topical issues, ensuring a level-playing field for all our members and for trade and sincerely expect all these to finally add value to our members and their business.

Before I conclude, I wish to thank my Vice Chairman NishanNanayykara and the full committee for all the support given during the year and special thanks and appreciation go to the Secretariat of the Ceylon Chamber, to Manori Dissanayaka and Manjula Maldeniya and for their unstinted cooperation and assistance as the secretaries of the Import Section and to all you ladies and gentlemen for your presence today.

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Many unresolved trade hurdles blocking business growth: importers

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