Policy consistency, rule of law and labour found wanting

By Mario Andree

Improving policy consistency, rule of law and labour skills are crucial to take Sri Lanka’s economy to the next level while the military needed to distance itself from the business environment.

Panellists at the annual national conference organised by the Institute of Policy Studies to mark its flagship publication ‘State of Economy’ highlighted several key areas which needed development, focusing mainly on labour issues.

They cited security on property rights, rule of law, policy consistency, and ease of doing business. However the discussion was more labour centric.

Ceylon Chamber of Commerce Vice Chairman Suresh Shah pitched first with his opinions on what was needed for the private sector to spur growth and said the current security on property rights needed to be resolved.

"In the recent past the government took over several businesses which were under performing and the private sector was reluctant to invest fearing those too would be taken over," Shah said.

"Rule of law needs to be enforced so that businesses can have confidence to invest. This would also improve the ease of doing business here. Policy consistency is vital for the country’s private sector and any foreign investor to invest further in developing the economy. We need a policy regime which is at least predictable so that the private sector could then structure their businesses accordingly," Shah said.

"Business should be left for businesses. The government and armed forces taking part in business activities is holding back investment in several key areas and is threatening some businesses whenever power maybe misused.

Labour was the key area focused by Shah and the other panellists. He said that the country needed a skilled and knowledgeable work force to support growth.

According to him, the current labour force was not skilled and knowledgeable or even up to date with latest technology to be employed in the private sector and called for better skills development programmes.

"A greater involvement in the school curricula is necessary by the private sector," Shah said admitting that there was no sufficient intervention so far.

With the rural populations more likely to be unskilled, the private sector investment seems reluctant to enter those areas, said Trincomalee Chamber of Commerce Former President Ram Rajamohan.

He said the rural population was currently losing opportunities of employment which was hurting the livelihood of the region as a result of skills being demanded by the private sector and no proper programme conducted to develop the necessary skills.

The SMEs too needed support and some policy changes were required particularly for them to have access to finance, Rajamohan said.

World Bank Senior Economist Ms. Susan Razzaz said despite the country doing better than others in the region, the economy needed to focus on private sector led development to sustain growth.

The SME sector was a vital component of this growth and strengthening the SMEs would be a good way forward.

She blamed the private sector for not intervening in skills development and knowledge improvement and said the private sector should actively participate in the process rather than blaming the government and waiting for them to respond.

With large number of college dropouts and no proper higher education system to support majority of the country’s students to improve their skills and knowledge a private educational system should be implemented at a level playing field.

Former Deputy Governor of the Central Bank W. A. Wijewardena agreeing with Ms. Razzaz said though the strengthening of private sector education was vital for the country’s economic growth, political interventions should be removed in the education sector.

He said political intervention seems to be a threat with the likeliness of private institutes being closed down as a result of unnecessary influences.

Moratuwa University, Department of Chemical and Process Engineering, Prof. Ajith De Alwis blaming the current schools curricula, the education system and the private sector said, "everyone wants everything."

Prof. Alwis noted that the private sector was blaming the universities for not producing labour with soft skills despite the fact that the universities produced the best professionals in various fields.

"Without blaming the education system the private sector should get involved with the school curricula and support the system to produce what the sector requires, a labour force with the skills and up to date information," he said.

"The current education system was producing not innovative brains but machines which were programmed for a single set of skills, which too needed a change if the country was to go forward," he said.

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