Chamber ‘Not happy at all’ about Govt. treatment of private sector
The President of the Federation of Chamber of Commerce and Industry of Sri Lanka (FCCISL) Ajith Wattuhewa says the government is not doing enough to facilitate the private sector.
“I am not happy at all. Entrepreneurs are the engine of the economy but there is not enough attention being paid to that area. Public Private Partnership (PPP) should be increased and I plan to request for a meeting with President Mahinda Rajapaksa to request more attention and support for the private sector from the government,” he told Ceylon FT.
“The infrastructure, especially the road network, is being developed but there is no way to get the domestic producers to the city. Investors do not have the necessary industrial zones and there is a lot of red tape. This discourages investors,” he said.
Ceylon FT: Ajith Wattuhewa recently became the 18th President of the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL). Having been the Founder Chairman of Chamber of Commerce and Industry of the Uva Province, he is the first President of FCCISL from a regional chamber and also the youngest president ever. In an exclusive interview with Ceylon FT he shared his plans for the Federation and wider national issues.
Q: The Federation office has been moved from Union Place to Grandpass. What was the reason for this move?
A: There were a few reasons. The rent of that office was high, but at that time we were receiving a lot of donor funds. There was also an electricity leakage in the building which resulted in extremely high electricity bills. As we were not the owners we were not in a position to fix it.
I know that this is not the ideal location for a national chamber, but this is a short-term measure. We are in discussions with relevant authorities to shift our office to Battaramulla within the next one-and-a-half years. That building will be called Federation House and it will contain all facilities necessary for the function of a national body like the FCCISL.
Q: Why is it that the Federation lacks the financial resources to have its office in a commercial area of Colombo?
A: The FCCISL has been sustained mainly on donor funding, but now we are not receiving the same level of funding. There are two reasons for this. One is that Sri Lanka is no longer a low income country. Therefore the donors have moved on to less developed countries. Secondly, some donor agencies of the European Union have moved their offices out of Sri Lanka due to political reasons. We are still negotiating with donors, but currently we are running with our own funds.
Q: Is financial mismanagement by your predecessors the reason for the lack of funds in the Federation?
A: I would not say there has been any financial mismanagement. However, around five or six years ago there were some funds which were mismanaged, but we are in discussions with the relevant people to retrieve that money.
Q: Has any action been taken against the persons responsible for this?
A: We have taken action against some people; but as the current President of FCCISL my focus is on negotiating and carrying out discussions with them rather than confrontation. I hope to engage with them and secure their services for the Federation and work towards one goal.
Q: You took over the presidency on 1 January. According to your understanding, which areas need your immediate attention?
A: At present there are 12,500 business enterprises registered under the chambers of the Federation. I plan to increase that to 50,000 within the next two years. The Federation should be the main body when discussing trade issues with any other party.
When we had donor funding there was no need to worry about raising funds and the only thing to consider was how best to utilize the funds. But now I have to raise funds as well. So I came up with my own plan which is 50% business involving fund raising, and 50% services provided by the Federation to its member chambers.
We have a good training and education unit here and I hope to develop it even further. I will introduce the Federation Campus to the country to conduct a lot of international and local modules for students, professionals and the business community. We will also carry out training workshops for member organizations, regional chambers, entrepreneurs and technicians and have a panel of consultants to provide business consultancy. Through this I want to develop the entrepreneurs from micro to small, small to medium, medium to large and large to international.
There will also be inbound and outbound trade delegations for joint venture business meetings and also trade exhibitions to promote local products to the world. An international investor forum to facilitate collaboration between foreign and local parties will also be held. Micro financing institutions will be invited to start projects in Sri Lanka to support small scale business community. We are also in talks with a few donor agencies to promote young entrepreneurship for the upcountry estate sector. We will also introduce a rating system for entrepreneurs registered with regional chambers to allow them to prove their credibility to banks and importers.
Q: As the first President of FCCISL from a regional chamber, what are your plans to develop the regional chambers?
A: I plan to introduce income generating projects and services for regional chambers as they are running under difficult circumstances. I will visit each and every regional chamber during February and March to discuss their requirements and expectations.
The requirements of the Southern Province may differ from those of the Northern Province. So, for the past two years we have been conducting the Key Persons Forum (KPF) regionally and through this we managed to make it possible for people of certain areas to engage in one-on-one discussion with the minister. I also plan to carry out District Enterprise Forums to assist entrepreneurs of different areas to find solutions to their issues.
Q: As a person who has been involved with the Federation for 17 years, are you satisfied with the support received from government over the past two decades?
A: No, I am not happy at all. Entrepreneurs are the engine of the economy, but there is not enough attention being paid to that area. Public Private Partnership (PPP) should be increased and I plan to request for a meeting with President Mahinda Rajapaksa to request more attention and support for the private sector from the government.
The infrastructure, especially the road network, is being developed but there is no way to get the domestic producers to the city. We have a special plan to get a reasonable price to sustain these producers, without making them pay intermediaries.
The second thing is that investors do not have the necessary industrial zones and there is a lot of red tape. This discourages investors. During President Premadasa’s time the BoI was set up and at that time an investor could visit the BoI and come out with all the approvals and certificates. This is not happening now. Ideally the regional chambers should be the regional offices of the BoI and any other government authority that grants approvals, so that SME investors do not have to travel to Colombo for these issues. I propose that the regional chambers be used for this purpose as most of the entrepreneurs are members of their respective regional chambers.
Q: There is a great focus on developing Hambantota and shifting a lot of businesses there in the coming years. Do you see this as a positive move?
A: I am from the South and over the past few decades most of the entrepreneurs who developed large scale businesses came from the South. These people came to Colombo and other areas and developed those areas. However, they were not able to develop their hometowns such as Matara. Developing Hambantota will benefit the neighbouring Uva, Sabaragamuwa and Eastern provinces too; so it is a good move. Furthermore, as Hambantota is not highly populated other cities can contribute human resources to the development drive of the city.
Q: Are there any specific industries that you want to focus on developing during your tenure?
A: I want to focus on all industries, but I have been in talks with the Ministry of Lands to improve the agriculture sector by establishing model farms. Now there is a three-wheeler culture in Sri Lanka among the youth. They do not want to go for a technical training and decide to run a three-wheeler. We are an agricultural nation and we should promote that.
Q: Are the policies of the Central Bank conducive to the development of entrepreneurship and business?
A: The interest rates are too high. The minimum rate is 9% while in other countries it is not more than 4% to 5%. The banking system should cater to the entrepreneurs more. Private banks are making an effort with extended working hours and more efficiency, but a lot of businessmen in the SME sector still prefer to deal with a State Bank. This is because they can negotiate better with a State Bank in case they fail to repay the loans on time.
For several years, we have been proposing the introduction of a tax system with a single digit tax which does not discourage business. It should also be an electronic system and it should be mandatory for all entrepreneurs and businessmen to be registered with it. This will ensure transparency and eliminate tax evasion.
Q: What effect do you think the resolution to be taken up in Geneva against Sri Lanka will have on the business community?
A: The private sector will be affected by this and thereby the whole country; as most of the population is employed in the private sector. So, we want to request the international community to not hinder the development opportunities of our country and not to impose trade restrictions.