Industry competitiveness in SAARC region should be enhanced - Minister

K.A. Perera, Wadduwa Special Correspondent

ECONOMIC SUMMIT: The Ceylon Chamber of Commerce Economic Summit 2007 - in partnership with the Board of Investment of Sri Lanka was held from June 6 to 8 at the Cinnamon Grand, Colombo.

Industrial Development Minister Kumara Welgama said: The businessmen and industry Chambers should get involved in national policy development in a more meaningful manner.

Since the government appreciates the role played by the private sector chambers, I invite them to join hands with the Government in country's development, Minister Welgama said.

At this session on industrial growth and competitiveness, as the Minister of Industrial Development, I would like to focus the importance of competitiveness in the industrial sector and highlight certain initiatives, my Ministry has taken in this regard.

"I consider it is a subject where major ministries connected to the national economy like Finance, Trade, Telecommunications, Tourism, Ports and shipping and industries should be equally concerned.

Although competitiveness is hard to define, it is understood as a nation's ability to compete in the international market, while at the same time providing a better standard of living for its people. Policymakers, intellectuals and the businessmen community have a significant role to play in national competitiveness, Minister Welgama said.

"When comparing the development in the global scenario, the World Trade Organisation (WTO) and other international agreements to which Sri Lanka is a party, require products to conform to a variety of standards especially focused on environment, quality and Social Welfare aspects.

Apart from that Sri Lanka has got certain concessions through the Indo-Lanka Free Trade Agreement, the Sri Lanka-Pakistan FTA and more fully under the Generalize System of Preference Scheme (GSP) where Sri Lanka has been identified for duty free or concessional duty access to the European market.

In order to obtain these concessions, certain requirements have to be fulfilled and the product has to conform with global standards: In order to achieve these requirements mentioned we have initiated certain programmes. I am sure most of the line ministries too have adopted the same measures," he said.

"The market oriented reform process has been supplemented by an increase in national competition Legislation. In Sri Lanka the two separate important Acts connected to competitive policy are the Consumer Protection Act No. 1 of 1979 and a Fair Trading Commission Act No. 1 of 1987. However, this situation changed and has improved with the Consumer Affairs Authority Act No. 9 of 2000.

"Competition policy is defined as government intervention that directly impacts on the structure of an industry and the conduct of firms in a industry. A working definition of it would include both microeconomic policies such as deregulation privatisation trade and investment liberalisation which enhance competition and the competition law, which aims to prevent anti-competitive practices.

The Consumer Affairs Authority Act was formulated as the fundamental covering that area.

"It should be noted that the World Bank and USAID compiled the first publication on Sri Lanka's competitiveness on the basis of extensive research conducted by J.E. Austin Associates, which was followed by another study on benchmarking by USAID.

The competitiveness initiative of the USAID, which formed industry clusters, was established subsequently. Industry clusters enable reprehensive of businesses and the Government to work together for a common cause," the Minister said.

"At the request of the Government and leading industries the USAID had funded The Competitiveness Initiative (TCI) - a programme offering direct assistance to eight industry clusters and initiating a strong public-private sector dialogue. TCI concentrate on eight clusters namely Tea, Jewellery, IT, Coir, Rubber, Tourism, Ceramic and Spices.

Therefore I should state that the ministries line of thinking was heavily influenced by the competitiveness initiative and we thrive hard to achieve competitiveness in all industrial sectors", he said.

Minister Welgama said apart from clusters, several other initiatives have been taken by the Ministry of Industries to promote competitiveness.

They are the National Cleaner Production Center (NCPC) established under the perview of my Ministry and productivity programme for selected industries carried out by my Ministry".

He said a pilot programme was introduced to improve cost competitiveness in the plastic industry by focusing on material and energy efficiency. This was conducted by the plastic cluster of the Ministry along with the NCPC.

Fourteen companies were selected, with five companies serving as demonstration companies to share their experience with others. The programme helped in achieving up to 30% cost saving in the industry while promoting waste reduction. It is useful in bringing down the energy costs and reducing rejects.

It plays a major role to nationalize the usage of natural resources, energy raw materials in industry enhancing competitiveness.

He said work on industry competitiveness in the SAARC region should be enhanced and a better exchange of views encouraged. It could act as a benchmark too among the regional countries, I hope the Ceylon Chamber of Commerce and other Chambers, too would focus attention in enhancing the industrial competitiveness in the region.

We as the political authority along with the estate and private sectors, chambers, trade unions and academics of the country should join hands and work towards the betterment of the country by encouraging activities of this nature".