Sri Lanka External Affairs Ministry “mad” to ask for GSP plus, says PB
Sri Lanka’s most-powerful bureaucrat on Wednesday said the country’s External Affairs Ministry was “mad” to ask for GSP plus concessions which had (already been) rejected.
In a lengthy speech delivered during the Joint Apparel Association Forum (JAAF) AGM post business session on the state vision for the apparel industry, Treasury Secretary Dr. P.B. Jayasundera said it was only two persons that believed it was okay to go ahead without the GSP plus concessions i.e. Central Bank Governor Nivard Cabraal and himself.
He claimed that this was because they believed the industry could survive without concessions; in addition it was noted that the sector pulled through even when the US withdrew the quota.
Dr. Jayasundera commenting on the figure of US$4.3 billion in earnings for last year by the apparel sector questioned how this was not raised as an issue.
Referring to the recent issues arising out of the questionable (economic) data, he pointed out that today the chamber chiefs were asking to probe the figures but not this data.
Commenting on the issues raised by the industry pertaining to the tax system, he explained that businesses could engage in research and product development resulting in triple reduction and then depreciate machinery and thereby pay zero tax.
The Treasury Secretary said he believes that Sri Lanka would become an apparel nation since it was able to overcome critical factors facing the sector like adjusting themselves to oil price changes, electricity issues and tariff increases.
The aim of the government is to ensure the Sri Lankan apparel sector is among the top 30 apparel manufacturing nations in the world by 2020 and that was the state vision, he said.
Dr. Jayasundera observed that recent issues relating to the terminal handling charges was something they had addressed and believed that at first there would be teething problems but it would hold well in the long term.
The call for a single digit VAT as stated during JAAF Acting Chairman Noel Piyatilleke’s speech among other issues was a dream of the Treasury Secretary who insisted that in this respect “we need a multi country value chain.”
He criticised the Board of Investment for being confused and their inability to interpret these issues correctly.
The Finance Ministry expert called on JAAF to convert itself into a company and get itself listed “not here but elsewhere since there is no money here,” and brand itself internationally.
In view of the electricity issues raised by the industry, the Treasury Secretary assured in this capacity as Secretary Finance that there would not be power cuts since power generation was diversified and would not cause interruptions. With Pakistan having no electricity he claimed that Sri Lankans should be satisfied that here it was still available.
He pointed out the state was currently working towards the next (2015) budget to ensure they obtain the lowest deficit post independence.
Furthermore, Sri Lanka should look to China since the latter was set to overtake the US and in this respect it was imperative to move ahead with the US, Europe, China and India.
Dr. Jayasundera advised the industry, citing local examples, to not move in the direction of Tri Star Apparel and Ceylinco noting that competition was essential with proper regulation.
In fact, he opined that today concepts were changing since the days when school textbooks identified capital to be movable and labour redundant as opposed to present day practices where labour was migratory. In addition, he observed wage rates today were demanded in line with the international rates.
He also assured the sector they would be provided with e-commerce facility for which the relevant authorities would engage with the customs officials to create a vibrant and high intensity speed work.
The JAAF AGM had elected the same members to the board and it was decided that they would work closely with the Export Development Board for more promotions with the next one being a machinery show in China during the later part of the year.