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Serving Sri Lanka

This web log is a news and views blog. The primary aim is to provide an avenue for the expression and collection of ideas on sustainable, fair, and just, grassroot level development. Some of the topics that the blog will specifically address are: poverty reduction, rural development, educational issues, social empowerment, post-Tsunami relief and reconstruction, livelihood development, environmental conservation and bio-diversity. 

Wednesday, October 11, 2006

BPA urges Govt. to deliver on regional economic growth

Daily Mirror: 11/10/2006"

Business and peace lobby group of provincial chambers submits proposals for consideration in Budget 2007

The Business for Peace Alliance (BPA), a network of business chambers with a commitment to building peace and reconciliation from around Sri Lanka has urged the government to take remedial measures to address the existing regional disparities while pointing out that there are grave regional economic issues that deserve the government’s immediate attention.

Among these issues is the inadequate promotion of investment in the regions and the lack of infrastructure facilities. It is crucial that the regions are made accessible via ports, regional air ports, good road networks etc in order to attract investment and create employment opportunities.

It is a widely known fact that investment in the Western Province accounts for more than 50% of the Gross Domestic product (GDP). In the past twenty years or so, investment and economic development has been largely concentrated on the Western Province resulting in a huge disparity in development between the commercial capital and the rest of the country. The trickle-down effect of development has not reached the other parts of the country due to low connectivity between the centre and the peripheries. While these conditions largely inhibit fair competition between businesses in the centre and the periphery, uneven development has resulted in alarming rates of poverty at a regional level. The BPA calls upon the government to bridge the existing development gap by creating a level-playing field.

The BPA also draws special attention to the socio-economic development issues in the war-affected North-East of the country and proposes that special incentives such as tax holidays and tax exemptions be given to investors willing to invest in conflict and tsunami-affected areas and underdeveloped areas. These incentives should be similar to those offered to investors in FTZs. Similarly, the development of industrial estates such as the upgrading of infrastructural facilities in the Vavuniya industrial estate and commencing the actual development of the proposed industrial zone in Jaffna are also of great significance to regional economic advancement. The establishment of an economic centre in Vavuniya to support the entire Northern Province has also been proposed. Another proposal forwarded by the BPA is the upgrading of the A9 road to a highway connecting the Jaffna peninsula to the South of the country while it is also proposed to implement a two-year tax holiday for tsunami-affected businesses speed-up the process of recovery.

The BPA also highlights the significance of making Micro, Small and Medium Enterprises (MSMEs) loan schemes available to a wider target group in order to proliferate entrepreneurship as a solution to the country’s unemployment problem while it is suggested that the local chambers could play an intermediary role in this regard and liaise between the government and the beneficiaries. It is also proposed to have a provision for low-interest credit facilities for tsunami-affected businesses, especially those in the conflict regions. The establishment of a North-East Development Bank has also been proposed. In addition, it is also proposed that the eligibility criteria for Dasuna loan scheme implemented in the South be broadened and its interest rates reduced.

In a bid to reduce the complexities and delays involved in security checks which hinders economic activity through out the country, particularly in the North and East, the BPA proposes the government to install a set of scanners (capable of screening up to 40 ft containers) in the North-East including the main check points of Omanthai and Muhamali along the A9 road.

As the lack of knowledge of the English language and information technology are factors contributing to the unemployment problem, it is also proposed that special programmes be directed at employable sectors such as graduates, school children and professionals so that their skills will match the requirements of the private-sector.

The BPA wishes to bring to light the benefits reaped by the Cease fire Agreement (CFA) where conflict-affected regions recorded high levels of economic growth surpassing that of the Western Province. In this sense, peace and return to normalcy would enable all regions to participate in the development process.

These issues have been underlined in the BPA’s proposals for the National Budget, 2007 and the BPA believes that the consideration of its proposals will contribute towards equitable regional growth. The BPA also hopes that all concerned parties to the conflict including the government will take corrective measures to restore peace and normalcy in the country for equitable economic growth to take place.

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