Tuesday Nov 26, 2024
Tuesday Nov 26, 2024
Tuesday, 15 September 2015 01:26 - - {{hitsCtrl.values.hits}}
By Shiran Illanperuma
Speaking at the Annual General Meeting of the Planters Association of Ceylon (PA), famed economist Dr. Indrajit Coomaraswamy called for political will, a dynamic private sector and a supportive public sector to pull through decline in the tea trade and help the country reach a growth rate goal of 7-8%.
Warning that Sri Lanka’s ageing population and lagging economy are preconditions for future instability, Coomaraswamy urged that growth needed to be maximised at this delicate juncture in the lagging post-war economy.
“Sri Lanka has some of the highest social indicators in the South Asia region yet lags behind the rest with low agricultural productivity, low tech manufacturing and a reliance of traditional services,” Coomaraswamy said.
Coomaraswamy recommended policymakers to begin diverting capital from these low-growth, low-profit endeavours towards investing in upgrading manufacturing and service industries with high technology.
Speaking on the declining state of the plantations sector in particular, Coomaraswamy identifies a number of inhibitions that are preventing progress.
Firstly, the ongoing unrest in Russia and the Middle East – Sri Lanka’s primary tea export destinations – was marked as an external factor far beyond the control of local stakeholders.
Such uncertainty would force local growers to change tracts from traditional business practices and seek out alternative markets. North America’s demand for iced tea and Europe’s demand for artisanal teas were both identified as possible markets for Ceylon tea growers to break into.
Secondly, commenting on ongoing negotiations between the PA and trade unions, Coomaraswamy decried Sri Lanka’s so-called ‘culture of entitlement’, calling for a move towards a culture of productivity.
As unions demand a wage raise to keep up with costs of living, the PA has pushed for a productivity-based wage scheme for years now.
Finally, Coomaraswamy singled out the stickling debate over subsidies given to smallholders and not to RPCs as ‘blatant discrimination.’ However, Coomaraswamy stopped short of offering a concrete solution as the State budget is too restricted to extend subsidies to RPCs and smallholders do not have the same purchasing power as RPCs to press for loans.
Yet the issue continues to be a contentious one as PA deals with out-migration of workers, while smallholders who receive subsidies are able to lower costs of production while still providing better wages to their workers. Remarking on Sri Lanka’s fortuitous positioning on the economic map, Coomaraswamy urged Sri Lankan policymakers to take swift advantage of the country’s proximity to India and pre-existing diplomatic ties to China.
As Asia is set to be the fastest growing economic region, Sri Lanka is located just 20 miles off of India, which in turn is predicted to be the world’s fastest growing economy soon.
Meanwhile, Sri Lanka also maintains excellent diplomatic ties with China, one of the world’s largest economies. “This is the best shot Sri Lanka has had in years,” claimed Coomaraswamy.
Calls for higher tech,
higher productivity
