From left: IASL Outgoing Chairman Nilam Jayasinghe (at the podium), IASL Vice Chairman Rimoe Saldin, Ceylon Chamber of Commerce Secretariat Rohan Casiechetty, Foreign Affairs Deputy Minister Dr. Harsha de Silva, IASL Incoming Chairman Dinesh Dharmadasa and IASL Immediate Past Chairman Pravir Samarasinghe.Pic by Damith Wickramasinghe
A leading trade association in the country recently called on the government to introduce mechanisms to monitor foreign direct investments (FDIs) and international trade to make sure that there is no adverse impact on local industries. Industrial Association of Sri Lanka (IASL) Outgoing Chairman Nilam Jayasinghe who noted improvements in Sri Lanka’s foreign policy in the past 18 months, said that the relationships should be capitalized to increase FDIs and trade, but also should protect local industries from them.
“The government should also take note of the scale and dominance of much larger players who could enter the market via FDIs… The government should have systems processes to scrutinize new projects which will not be harmful and exert undue pressure on Sri Lankan industries,” he said.
He added that Sri Lankan companies also face huge challenges in entering markets like India and China despite ‘aggressively promoting free trade agreements’ with them, and also noted that such enormous markets could dump low quality products in Sri Lanka if protections are not in place.
IASL Incoming Chairman Dinesh Dharmadasa noted that import duties for raw materials are higher than import duties for finished products, which dampens incentives for local manufacturing, and called for a second look at the tariff regime.
Foreign Affairs Deputy Minister Dr. Harsha de Silva, who was the Chief Guest at the IASL annual general meeting, in response noted that the comments sounded like that they were from a nationalist and pro-protectionist group.
“I wondered if I was sitting in on a COYLE meeting or an IASL meeting,” Dr. de Silva quipped.
While Jayasinghe also noted that Sri Lankan companies should continuously invest in innovation, building capacities and competitiveness, Dr. de Silva, going into a detailed liberal trade policy lecture, explained that if local industries are protected, they won’t invest to be globally competitive.
Dr. de Silva also noted how many multinational corporations are a part of IASL.
“I know a lot of you are a part of multinationals of Sri Lanka and have local operations here and don’t necessarily look at export markets and look at the domestic market as sort of your playing area. While I appreciate that, you must also appreciate the other side of the coin,” he said.
Local operations of Nestle, Holcim Lafarge, Ultratech Cement, Unilever, Fonterra etc. are a part of IASL.
Recently, leading economist Professor Prema-Chandra Athukorala said that Sri Lanka should be attracting FDIs for exports, which will result in technological and expertise transfers to local companies, who will then be able to take on contracts and sub-contracts for exports.
Meanwhile, Jayasinghe welcomed the government’s decision to set up numerous export-oriented economic zones, but also called on the government to clearly communicate to businesses the advantages of moving into these zones. (CW)