PM pledges support for ICT sector

By Charumini de Silva

Prime Minister Ranil Wickremesinghe yesterday underscored the importance of the knowledge economy as one of the main spheres for the development of the country in the next decade, while pledging Government support to make ICT a world-class industry. 

Addressing the National Chamber of Exporters (NCE)-organised ICT Forum titled ‘Information technology and its Role in the Modern Organisation,’ Prime Minister Wickremesinghe urged the stakeholders to be geared to face the stumbling blocks in achieving a $ 5 billion industry by 2025.

“I would like to say that this Government will be promoting the knowledge economy as one of the main spheres for economic development in the next decade.” 

“We want to create a complete knowledge economy, where Sri Lankans work and benefit from it. I am confident of achieving the target, but face challenges to reach that $ 5 billion,” he said.

He said that the Government had set up a taskforce to revamp the industry and focus on the knowledge and IT sector in the next 18 months, as thrust had to come from the sector in creating a whole knowledge economy.

Noting that the Government had pledged to extend Rs. 3 billion for development of the sector in the next three years, in addition to the Rs. 300 million allocated for this year to implement various activities to promote ICT development through the Export Development Board (EDB), he added that the sector was a priority focus areas in the National Export Strategy (NES), which would be launched this month to propel Sri Lanka into the future. 

“With Rs. 300 million available now and if you can use all up this year, I will give you more money next year. Some people thought it is very optimistic when we said Rs. 300 million for the first year, and some in the Treasury were wondering how much will be left. There is Rs. 3 billion, but we can certainly give you more than Rs. 300 million if you can show us (perform) in the first year. If you’re working, the Government is behind you. This is the first commitment we have made, and we are willing to go ahead to support the industry,” Wickremesinghe stated.

According to the Prime Minister, these funds will be allocated by way of grants, equity investments, credit facilities, mentoring, and technical support with the end goal of developing local startups and attract foreign investors.

“You are the newest industry in the world — the IT industry, the knowledge economy. Let’s see how you’ll perform. Certainly we are looking at helping both good performers and also backing up newcomers to come. I hope we will see you asking for more funds instead of letting the money go back to the Treasury,” he said.

He pointed out that the knowledge industry was economically important for Sri Lanka, as it was where the country could send in the most valuable human resources. “We want to use our strategic location, our people, and improve our education system to go up the value chain and become an upper middle income economy. This is the range I am talking of, but we need to see how well this challenge can be taken by you all.”

Describing ICT as a ‘highly-mobile’ industry, he insisted the stakeholders needed to look at ways to retain workers, citing ‘brain-drain’ as the biggest challenge. “We also have to look at issues connected to knowledge workers, remuneration, taxes and so on. However, we have to realise that once you train these knowledge workers, you may actually be training for another country. So, let us see what we can do to retain them within the local ecosystem,” the Premier emphasised.

He also called for a training plan, not only to train the bottom level, but more engineers, as there was a big market for that. “The next is the real training. This is where we actually want to help those non-government sectors who have training courses, and want to expand training courses. We can help in different ways, and if there are not-for-profit organisations, we can give them more assistance. But we need a training plan, not only to train the bottom level, but more engineers and others. We are willing to give student loans, which they can repay after their graduation. You got to look at the training aspect, otherwise you’d be overpricing yourself at the bottom by competing for the people at the bottom,” he added.

Wickremesinghe said that the Ministers of Education and Finance were working together in providing iPads for schools, which would be a massive leap forward, while adding that he would recruit the aid of other Ministries to organise boot camps for school leavers.  

In terms of corporate taxation and incentives on the ICT industry, he pointed out that it was one item receiving the attention of the Government on what the post and period tax rate should be. 

“We brought in the new Inland Revenue Act, but they say what is there is not sufficient as far as the soft knowledge sector is concerned, where capital is not deployed in large amounts. What we have done is based on capital investments, which is the problem when these soft sectors come in. We are re-examining that area as to what we should do to give those to the exporters, as well as to give some of those to the foreign investors who may be interested in coming here. You need a mix of both of those.”

He said that Sri Lanka had to do more on manufacturing, especially in modernising the sector, particularly with the use of semi-automation in manufacturing process. “A small country like Sri Lanka, with a small population, must make use of semi-automation because it will be in no way displace workers, but add value to your products. So this is a part where the knowledge industry, manufacturing and IT comes together.”

The Prime Minister also said that the Government had identified logistics, communication, and financial tourism to promote as new areas in making Sri Lanka the hub of the Indian Ocean. 

He said that very soon the Government would have a viable arrangement for the Mattala Airport, just as they did for the Hambantota Port, making available good infrastructure in the middle of the Indian Ocean.