Ravi K outlines steps to revolutionise Sri Lanka

''Following is the address delivered by Finance Minister Ravi Karunanayake as the Chief Guest at the 80th Annual General Meeting of the Import Section of the Ceylon Chamber of Commerce on 17 July at the Union Ballroom, Hilton Colombo Residences''

Good evening to every one of you.  Members of the head table, distinguished invitees, ladies and gentlemen. Firstly let me thank you at the outset for inviting me here today to speak to you on topical subjects and ease certain fears that are there and to give assurance that we are a government on the move. I came with a prepared text however the Chairman of Import Section Dinesh de Silva was so keen on coming out with certain solutions to some of the questions he posed and I thought to myself, let me take the bull by the horns.

Eighty years ago setting up an import section and promoting, coordinating and supporting the interest of the imports of trade is indeed a great achievement. And I must say with distinction it was done with a lot of finesse and a lot of professionalism and there seems to be a sense of continuity that goes on unlike many other institutions that are there, that spring up and vanish as quickly as they come in. 

 

Sense of togetherness

The intention of the Chamber is to bring a sense of unanimity among all the importers but let me first question whether that exists with the importers. I was telling Dinesh, just before my speech I don’t seem to see the sense of harmony that exists amongst importers as much as what the Chamber would like to do. This exists in all other chambers. There should be a sense of togetherness. 

If you look at countries like Pakistan, Egypt and Bangladesh, governments are brought to their knees by the chambers and I have been advocating this because I see there is no sense of togetherness whether it’s in exports or imports in Sri Lanka. I was trying to do this when I was the Trade Minister in 2001-2004; some took advantage and others took advantage on ex-officio points. I call upon all of you senior officials and businessman here to inculcate this when you look at it in the short run, if not we will step in as a government move try to force every importer/exporter to be through a chamber so that you get a sense of togetherness or a collective sense of negotiating on many matters. 

You all are talking about grey imports, etc. but I was just telling your Chairman that at least 10%-15% on a daily basis seems to be trying to penetrate to the system from a devious manner. We got Dr. Neville Goonewardena, former Director General of Customs; I am sure he will bear testament while we are trying to correct this we don’t see a sense of urgency in the market. Short term opportunity gained is what they are looking at rather than long haul.

I am sure many of this comes from the change that the people of this country chose on 8 January. There is tremendous change in the democratic process. And I see when things are going good, people are keen to go on and I hope the same situation will continue after 17 August. When things are going good, let things go without a problem. We have seen things happening now and we could see what was not existing for the past 11-12 years suddenly coming in the 150 days. A small matter to ponder on and get things moving from a different direction. 

 

Ease of doing business

As the Chairman expected me to respond to some of the questions, so I thought the first thing that we have brought into the system is trying to do business with ease. I am sure in the last three months you have seen a significant change in the attitude of the Government servants. The mindset has to be changed and what we thought was under the leadership of the Prime Minister who

entrusted me to take command of doing business with ease we brought in many institutions that take decisions in the country to come before the investors, small, medium or large, to come and highlight the problems they face.

Sometimes the problems we see may differ from their angle. But yesterday was the third meeting we had and I must say things are improving tremendously. I called upon the chambers to come there not as chamber representatives, but standing on behalf of the members who were represented and let them come into the forum and address the issues that they have and I am sure you see that there is a quick resolution that will come by doing business with ease. 

Coherent and consistent

The other one is that as a Government we have been trying to be very coherent, consistent and in a continuous manner that with quick decisions and I am sure you would have seen some dramatic changes, have been done in the short run. Even with a minority Government, we have dared the system and have been successful because that is what the people are expecting today. 

The Government institutions that are being entrusted to do this I must say are learning quickly the intention of the Government and responding to certain matter. We have got the Commissioner General of Inland Revenue today and you could see a mindset change there as well; you could see revenues are going up, hassle is less and as a result you could see a wanting to work towards this business sector. 

 

Freight forwarding

Now Chairman you mentioned many matters you wanted me to address. First on the SLPA as the Chairman is here and my freight forwarding guru, my friend, Diren Hallock, here today. He basically gave an idea, in fact it’s his brainchild; he gave this idea 15-20 years ago. He got the airport airfreight division, the cargo village, to come up a concept where the FF gets 80-90% cargo either LCL or FCL to ensure you have delivery system that exist in the aviation (air cargo village). And I think the same thing may be good to be replicated in the SLPA, as there have been delays that are there due to the lack of efficiency that exists in the SLPA. 

So just telling the Chairman that it’s a good idea to ponder and come up with the importers deficiency and for the FF associations and see if you can replicate the same type of thing under the abled guidance of the SLPA and allowing the FF and import section to step in and have a public private partnership; nothing wrong there. They still charge the same but you can do the work. 

So that’s the way we like to bring the sense of efficiency coming in so that may be an area the Chairman of SLPA that you can basically liaise with them and try to see how you can get it going. This may be a way forward because there will be much more shipments to come rather than what is going on at the moment because as you could see there is a great urgency in developing imports and exports in this country and we have taken upon that this country needs to export and on that basis we will facilitate everything possible in order to get to that target. 

 

Connectivity to other entities

Then the Chairman Import Section was asking about the many unresolved issues. You mentioned the connectivity to other entities. As I basically call all of you’ll and have given time till end September as the time that all these institutions will be connected online and I am sure the Inland Revenue has already begun the migration. So as a result you will find the entities working on 24x7 on a single window basis. The timeframe given is end September and I call upon you as the Chairman to get involved in that committee. 

The problem is that you’ll like to come in but don’t get involved in the system. So please ensure that you have a member permanently on that committee so that you can flag any delays that are taking place. This is a complete change in the Government approach that is there. We the Government don’t think that we know it all. You’ll are there; we have to service you’ll so come into the system and ensure that you take advantage. Dr. Neville Goonewardana is in the committee as well and ensure you give the ideas that is there.

 

Trade disputes 

Then trade disputes; the Merchant Shipping Act needs to be changed and certain things will be looked in if there have been delays. But except for one or two matters, I have not seen that there is a stumbling block. But if there are any precarious areas that are there concerning you’ll, please do come forward and we will ensure that those matters are put to rest. 

Determining import values are one of the major problems that are there and the Director General of Customs was called today in the morning and we have placed a review panel that basically looks at the valuation that goes on because it is very subjective. It basically in the hands of one or two officials who they decide as to what the value would be. This is very prominently displayed in the valuation of cars, etc., and I have taken the initiative to try and ensure this is completely rectified and once again Dr. Goonewardena’s knowledge is being tapped and I’m sure it helps to facilitate the process. 

I did give instructions yesterday to ensure that this beefed up and not to make it a talk shop there but to ensure things happen there and you would see that you would be once in two weeks meetings are convened and within that two weeks any problems that are unresolved will be referred to and a quick resolution within the day will be provided. That is only going to determine the true valuation.

Now to further improve this I would invite you’ll nominate a member from the Chamber of Imports and we will put that also in to the committee. Already three people are in the committee nominated by myself and by adding the fourth person, we would like to see that you walk to talk that is there. So you have a problem, you are within that as long as there is no conflict of interest you can go and make the decision. 

We have seen that the revenues we collect are far less than what is anticipated to be collected and that’s the reason why we are doing these correct actions so help us to collect the revenue that is desired and reduce the burden that is on the people. Taxes are there from all corners but we don’t collect the revenue that we got to collect. So that’s the pursuit that we basically believe. 

 

Delays in clearing

Then delays in clearing; I don’t think it is something significant because I’m sure the SLPA Chairman is on this and there is a good team there. My general feeling is that we could have a higher efficiency that goes on so that it will help to reduce cost and help ships to move out quicker but certainly it’s within tolerable limits. But certainly if there are any delays, ensure that you have a close consultation with the SLPA and I’m sure you will be able to resolve matters fast. 

The dangerous goods is once again the same. But I’m sure if you look at SLPA tying up with freight forwarders and the interested parties are able to come with a solution which will be a quick fix solution. Then the scanners; I did ensure that this scanning process would be put to place because we see revenue erosion one of the biggest problems that are there and very sad. So I have given the Customs a task of trying to bring the scanners in by end of August/September but realistically we were trying to implement it by the end of the year. My feeling is by October you would have a system in place. We will be having trial runs, we will simulate the system that is there and from January we will ensure that every container would be fully scanned so that you will be able to ensure that quick clearing that goes on. The only problem that is there is the general scanning is that you have a drive through operation which is not as effective as it could be. 

The next stage, efficacy, is much more; unfortunately it’s about four to five times the cost. Now the cost per container is something which you are mindful of and we are trying to do a POT operation to ensure that the Government doesn’t just carry on investing on unwanted areas and have obsoleteness on our hands. But we find that there is a very good responsive approach that is there and we will definitely finish this by October.

I feel the country is improving and have realised things are going on and this is the only way you can leap in to a better technological era and put Sri Lanka, the miracle of Asia. 

 

Policies

The next one is the policies; I am sure it is nothing but coming from the private sector knowing what you’re saying is it has to be consistency, continuity and basically effective nation making. This is something that we will try to do at our best. But the only problem is trying to have changes of duties; there are certain matters that have to be taken when it comes to agricultural commodities, you have to have that quick resolution because when the domestic farmers have to be protected, there has to be a mechanism that is fair and comes in protecting both ends. So these are the areas that you will have very few interventions by the Government that doesn’t have this consistent coherent policy. 

So ladies and gentlemen I basically think your Chairman did ask pertinent questions which are relevant and timely and I am hopeful I was able to answer many of your problems that you have. But as you know, persons from the trade, who belong to your area and able and looking forward to seeing that there is quick resolution and quick clearing process ensure that the 24x7  clearing process is still not put to good use. I mean there are much more things that can be done. Ensure that the process can make you reduce your costs and ensure that you have proper planning is there. 

 

Professionalism

You could see that there is professionalism coming in to the Government department. But the only thing that is expected of you is that it doesn’t come cheap. Because today Government servants are getting much more decent salaries than what they were getting before; but it’s still not good enough compared to the private sector. So with that mindset, that’s why we gave a substantial salary increase which was not given for 10-11 years, we gave it in 29 days. But that has certainly given a much more motivational approach and all I want from you’ll is walk the talk, your right to question and you ensure that you have the same thing backed up that enables to take command of those able to do those particular things you are questioning. We will open the doors, but don’t shut the doors on your side. 

Thank you very much for inviting me today and we are there and responsive and you don’t need to have one year more to have the Minister coming to answer your question. We have an open door policy where you are able to contact the Ministry and be able to have our officials helping you, our Government institutional heads will respond to you. But even if you unable to get any satisfactory answers to any of your questions, I’m there to respond to you. 

Together let’s revolutionise Sri Lanka. 

Thank you.