|Saturday, 12 January 2002|
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Welcome focus in development
The Government's decision to provide a series of incentives to local investors in its March 2002 budget, gives the current economic recovery plans a welcome focus which was largely lost over the years in successive governments' efforts to give primacy to the inflow of Foreign Direct Investment.The public are likely to be pleased over the State's realisation of the importance of the local entrepreneur and investor in its economic rejuvenation strategy.
The terrible risks inherent in an economic development strategy which depended overwhelmingly on the induction of Foreign Direct Investment was driven home to the developing countries by the South-East Asian currency crisis of the late Nineties.
In the wake of a decision by foreign investors to pull out precipitately some of South East Asia's most vibrant economies crumbled like a pack of cards.
'Leaping Tigers' as these economies were once admiringly described, were reduced to helpless kittens.
By making these observations we do not intend to play down the importance of foreign investment in the country's development process but wish to highlight the dangers of depending lop-sidedly on a few critical external elements in kickstarting economic growth.
The vagaries of the world economy, which were brought home to us over the past year, for instance, should help refocus attention on the need to place equal and strong emphasis on local investment in Sri Lanka's development strategy. Our foreign exchange reserves could be saved and bolstered to the extent to which we depend less on imports and thrive more on local enterprises.
A strong, local industrial and manufacturing base, for instance, would help greatly in fostering national self-reliance; an aim which would be met by placing emphasis on the development of local investment.
Measures which would ease the burdens of local entrepreneurs in loan repayments to State banks have already been announced and this would help considerably in stimulating the growth process but equal emphasis should be placed on developing the entrepreneurial skills of the local investor.
Fortunately, we now have a ministry on enterprise development which could take on this important task.
The provision of micro credit needs to go hand-in-hand with the fostering of small and medium-scale enterprise management skills if the local enterprise sector is to be rendered strong and resilient and we hope that this aspect of development too would be addressed adequately.
Perhaps our senior school syllabi pertaining to the field of commerce and finance should now begin to address these national needs more substantially and systematically.
Tertiary education institutes too need to take up this challenge on an urgent basis.
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