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From left: COYLE Member Saman Kumarasinghe, COYLE Member Jagath Sumathipala, COYLE Member Lalith Kahatapitiya, COYLE Chairman Navein Perera, COYLE Member Dr. Rohitha Silva and COYLE Member Nayana Dehigama – Pic by Shehan Gunasekara
By Himal Kotelawala
Moves by any future Government to sign the Comprehensive Economic Partnership Agreement (CEPA) with India will be actively opposed by local entrepreneurs, the Chamber of Young Lankan Entrepreneurs (COYLE) said yesterday.
The collective also called for a tightening of regulations vis-à-vis foreign investments and urged the next Government to take steps to ensure the protection of Sri Lankan entrepreneurs and all local Small and Medium Enterprises (SMEs).
Referring to media speculation about the signing of the controversial agreement following a recently held economic summit, COYLE member and Chairman of Multichemi Group of Companies, Samantha Kumarasinghe, said that there was ample evidence to show that CEPA was not beneficial to Sri Lanka.
“This particular economic summit was conducted by one chamber comprising many foreign members. They may have had an interest in it and we really don’t know if it was the view of the Government.
But if any Government tries to sign the agreement, we will do our best to oppose it. It is an agreement that’s very carefully and shrewdly drafted by India and forced on us,” he said.
Certain Sri Lankan officials who have engaged in discussions regarding CEPA, he said, are openly supporting Indian views, while turning a blind eye to concerns raised by Sri Lankan entrepreneurs.
“If the Government is going to sign CEPA, I think they’re either misled or they’re making an unwise decision,” he added.
Coyle Member and KIK Lanka Chairman Lalith Kahatapitiya also criticised the rumoured move, implying that it could’ve paved the way for an employment crisis in the country.
“The unemployment of engineers in India is close to half a million. When we have 6,000 to 15,000 engineers graduating from our universities and we don’t provide them with jobs, there will be youth unrest. If there are no employment opportunities for Sri Lankan youths, they will start rioting,” he said.
This called for a Parliament approval process for bilateral agreements,” declared Kahatapitiya.
“Before signing such agreements, debate them in Parliament. If everyone agrees, then by all means sign. But don’t grant decision-making powers to a few and create a situation where a handful of people are deciding the future of the country,” he said.
These views, among others, were expressed at a media briefing held yesterday by a panel of entrepreneurs representing COYLE, where they made 13 recommendations for the facilitation of a strong and sustainable economy in Sri Lanka. Among the issues raised were the privatisation of state enterprises to foreign companies, reduction and removal of customs tariffs and other customs-based taxes without placing safeguard measures to protect local industries, and free trade agreements with India and Pakistan not allowing free and unrestricted entry of tea and garments.
The Chamber seeks assurances from the next Government on, inter alia, the implementation of international standards on all imports including strict legislations with regard to anti-dumping, product standards and labeling requirements, use of child labour and environmental standards.
The panel also highlighted the need to introduce restrictions on foreign ownership in all businesses to a maximum of 49%, other than the BOI Export Oriented Industries within the Free Trade Zones. This rule of 51% ownership for local entrepreneurs, said the panel, should especially be strictly enforced in value addition businesses utilising natural resources such as mineral sands, water, gems, oil and gas.
Retail trade should also be reserved only for Sri Lankan entrepreneurs and foreigners shall not be allowed to enter this trade even through Securities Exchange, the Chamber stated, adding that the new Government must maintain import based taxes at zero level on advanced high tech machinery and raw materials not produced in Sri Lanka.
BOI restructure
COYLE also called for the complete restructure of the BOI with new and different policies and facilities on par with what it called the rapidly developing free trade zones in the Middle East and Vietnam.
Similar to the autonomy granted to public services through the establishment of independent Public Service Commission, said COYLE, the Government should set up an independent Public Enterprise Commission to appoint chairmen and boards of directors, and ensure that those appointed are independent and strictly comply with respective regulatory arrangements and best practices in doing business.
One of the key points made in the 13-point list of recommendations is the involvement of the Sri Lankan parliament in bilateral agreements.
Trade, investments and services related bilateral agreements with other countries should be implemented only with the prior approval of the parliament, said the panel, having fully assessed the cost/benefits including but not limited to social, environment, government services, security, employment and exports.
COYLE Member and Chairman of Epic Technology Group Nayana Dehigama said a strong economy requires the strengthening of entrepreneurs.
“In Sri Lanka, SMEs contribute to about 75-80% of the country’s economy. SMEs are centred around an entrepreneur, whose contribution the country’s economy is evident,” he said.
It was with this in mind, he said, that COYLE decided to inform President Maithripala Sirisena and the Government to be appointed following the upcoming parliamentary election of the problems faced by local entrepreneurs who have the capacity to develop the country economically.
When asked if COYLE was against foreigners investing in Sri Lanka, Dehigama said they were actually in favour of it but that the Government should take measures to safeguard local entrepreneurs.
“There is a driving force behind this country, which is the entrepreneur community. Think about that. All we ask is to not give them everything on a platter. Think about the local entrepreneur community also. For example, what would happen if an Indian billion dollar company started operating here without any taxes? What would happen to Sri Lankan companies in the same trade? They could dump their prices here over a couple of years until such time they find that no Sri Lankan industry is sustained. And then from there they will take it up.
“That is why we say protect Sri Lankan entrepreneurs by way of implementing existing policies. There are already policies in place, implemented by different governments. We need more, we need protection and there are loopholes. Please address them. Do something to close these loopholes,” he said.
