Ravi vows to crush crony capitalist monopolies

6 August 2015 04:23 am - 0     - {{hitsCtrl.values.hits}}


Industry monopolies created through protectionist policies of crony capitalism will be brought down by opening the markets, according to Finance Minister Ravi Karunanayake, who was speaking at the Sri Lanka Economic Summit organised by the Ceylon Chamber of Commerce this week.

“For the sake of just putting a protective element just to have no competition for them - that won’t benefit (the country). Examples are in the areas of tiles and steel.

You know the input costs (of construction) have gone up by about 4 percent just for protecting them. If you have an open government, you’ll have a much more robust construction industry,” Karunanayake said.

Business magnate Dhammika Perera is said to be controlling around 80 percent of the market share in tiles and ceramics through Royal Ceramics PLC and its subsidiaries and associate companies.

Currently, import tariff of 74 percent is imposed on most ceramic and tile products.

However, in its 2015 annual report, Royal Ceramics Managing Director Nimal Perera said that imported tile sales are on the rise despite being on the negative list.

“(This is) threatening the local businesses and causing a drain of foreign exchange; this poorly-regulated sector requires stringent measures be put into place,” Perera said.

However, the tariff levels show that the regulations are extremely rigid and that imports are growing due to the foreign alternatives being almost half the price of local products.

Ironically, some of the local tile manufacturers have resorted to selling imported tiles.

“There are 32 BoI (Board of Investment) approved items in the negative list. I think this should be brought down to about 25. Protectionist measures would come in if they meet the national policies we have set as a government,” Karunanayake added. (CW)


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