“Crony capitalism” must give way to reforms

BusinessChange in the mind-set of the Sri Lanka’s private sector from crony capitalism, is vital for Sri Lanka’s economic development, Prime Minister Ranil Wickremesinghe said on Tuesday.

Following the other Asian models, the Western Province should be made into a ‘megapolis’ of eight million people, he said. Addressing the Annual Economic Forum which was organized by the Ceylon Chamber of Commerce under the theme: “Towards export of US$ 50 billion “, he also stressed that the country has to move to the next generation of reforms, liberalizing factor and product markets and also reduce State controls and quick business approvals.

“Authoritarianism, which was practiced after the war had failed to deliver the goods and a free society was the answer,” he remarked. “We have presented our election Manifesto. In that there are no promises but our action plan. New country in 60 months focusing on 5 pillars, which included economic, educational, social and infrastructure development as well as eliminating corruption.”

“What are our goals? Our goal is provide 1 million well paid jobs in five years whether it employment or self employment to raise income of our people. We stagnated to long as the low middle income country this is time for us to move forward.”

“Our new economic plan is to focus on a knowledge-based economy centred on the highly competitive social market economic model based on sustainable development. “Achieving, an export target of US$ 50 billion not going to happened overnight it is going to take a lot of work firstly it is a question of change of mind set of the private sector.”

“Are we going with crony capitalism? People want jobs, people want income, and people want social mobility is we providing that or not in doing so we have to open and we have to do next round of reforms. Some will look at it will painful for them. Pain in the country we all have to be shared, if we want us to grow and it cannot blame only larger part of the people.”

“We have to be outward looking. We cannot ask an import-substitution economy and ask for 50 billion dollars in exports.” Sri Lanka has been a trading hub which controlled trade in the Bay of Bengal and up to China during the Anuradhapura and Polonnaruwa periods.

“We need markets. We thought we can manage without European markets. We proved wrong. now we have to negotiate with EU to get GSP+ before that we have to remove EU ban on fisheries exports .GSP + means after Geneva talks/that is big market. We are talking about Chinese free trade agreement. That is good but we need a high quality value addition. We have to tap our neighbouring Indian market and then US markets after US elections. “

“We need a factor market reforms. To do this factor market reforms politicians & businessmen have to be meet in convenience place.” The government had a role in the economy, but it must be not to become a competitive with private sector. Controls and regulations that prevented people from initiating activities and seeking approval from the government had to be reduced.
We have to promote foreign investment seriously with limited restriction. We are going to be a niche marker exporter. In order to ensure that there are large investors coming into the country, we are having economic development areas.

“Within that we will cluster three or four investment promotion zones that will reduce the cost of infrastructure that will make it easier for us to control pollution and ensure the environment is protected.” There will be two major zones located around the Western Province starting from Kuliyapitiya to Diwulapitiya and the other is from Horana to Avissawella.

The third economic development zone will focuses on logistics, thinking of the port and airport in Colombo, while another zone will be built focusing on financial services. These zones will be located within Hambantota and Trincomalee and Jaffna. 

“Apart from that, we are looking at two economic development zones for tourism, with one zone located within Bentara to Weligama, and other within cultural triangle to attract high spending tourists,” the PM remarked. (Ceylon Today)

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