Huge monies collected by the banks from the public should be utilized for the public – the poor – the common man - by the banks. This was the contention of a former trade unionist now turned Chairman of Merchant Bank of Sri Lanka PLC, M R Shah.
Speaking on the topic “Relief to Common Man, Opportunities to the Investor” at a pre-budget seminar organized by the Organization of Professional Associations of Sri Lanka (OPA) in Colombo this week, Mr Shah said that there are two kinds of this common man – poor and ultra poor.
He said that in Sri Lanka there are 3 million people who are earning less than one dollar a day and another 7 million who are earning less than two dollars per day. He said the responsibility of the government is to upgrade the standards of living of th common-man.
He said that foreign direct investment alone would not help the overall development of the country. Noting that the banks are handling public money, he said, “They should be utilized for the public interest.” He said that 40% of the people in this country do not have access to banks and a large number of them belong to rural Sri Lanka. He said that if these funds are diverted for rural economic development it would be a tremendous relief for the common man.
Mr Shah said that the 2012 budget should provide for the diversion of bank funds for the people in the rural sector and as 8% growth is being spoken of, it should be distributed among the population in an equitable manner. At present the rural sector is not represented in this growth.
He said that banks normally are reluctant to grant loans for the poor as they do not have the type of securities the banks call for. Yet, Mr Shah said that this portion of the population is trustworthy and the recovery rate of banking with the poor is 100%.
N R Gajendran, Partner, Gajma & Company speaking on ‘Challenges for Budget 2012’ appeared to be not in agreement with some of the views expressed by Mr Shah specially the views about the poverty levels in the country as his view was that Sri Lanka has a strong economy.
He said that the areas that are somewhat neglected are the agricultural sector and Information Technology Sector which the government should address in the coming budget.
Ms G Gunaruwan, Chief Economist, Ceylon Chamber of Commerce speaking on “Macro Economic Perspectives” said that achieving the stated investment target of 32% seems unlikely though there are a range of positives such as peace, introduction of new tax regime this year, lower cost of capital; pick-up in private sector credit growth and improved infrastructure.
She said that the negatives towards achieving the stated investment are: lack of clear policies; BOI restructure/poor investment facilities and access to land.
Sarath De Silva, President, National Chamber of Exporters of Sri Lanka speaking on “Land usage, Productivity and Produce, Agricultural and Marine Base, Raw materials to boost export and reduce imports” that there are many issues plauging the agriculture sector. He said that in the North and East there is a land without chemicals for the last 30 years and if this land is provided for the private sector they could have food crops without chemicals.
He said that in Sri Lanka agricultural produce yields are very poor in comparison to other countries and yields are so poor that if 200 tons of pineapples could be exported, there are days when the collection is less than 2,000 kgs.
Dakshitha Thalagodapitiya, CEO/Secretary General, Chamber of Construction Industry of Sri Lanka speaking on “Challenges and Opportunities for the Construction Industry – Key Drivers of Development” said that during 2010 Sri Lanka’s construction sector recorded a growth rate of 9.3% while its contribution to GDP stood at Rs 423,414 million – 7.56% of the GDP.
The challenges for the construction industry as he indicated are capacity development; cost of construction and availability of raw material; funding for infrastructure development and construction projects; end product quality and timely delivery; procurement process reform and enabling environment; building the image of the construction industry and –promotion of exports of construction related services.
U H Palihakkara, President, OPA, moderated the proceedings of the seminar.