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Sri Lanka President expects businessmen to produce goods after controlling imports

ECONOMYNEXT – Sri Lanka’s President Gotabaya Rajapaksa had asked businesses to manufacture products including brooms and drugs after controlling imports and giving subsidized credit, his office said.

Imports in many sectors considered non-essential had been controlled, leaving the way open for businesses, President Rajapaksa had told businessmen.

Controlling imports through duties limits competition and pushes up prices, forcing consumers to buy any good produced by local businesses at a higher price than paid by people in export competitive countries with free trade or go without it.

Sri Lanka has completely halted the import of a series of goods as the rupee came under pressure from money printing in March and April 2020.

“The Government apparatus is geared to assist the industrial sector,” President Rajapaksa had told businessmen.

“The ground work including the provision of loans at single digit interest rate has been laid.

“President Rajapaksa said he expects the industrialists to show results by manufacturing an array of goods ranging from brooms to medical drugs domestically.”

Sri Lanka’s central bank has released liquidity to money markets by cutting reserve ratios and is also injecting more money through a 150 billion rupees credit scheme with re-finance (new money) despite having a soft-pegged exchange rate-raising further fears for the currency.

“At present, there are several tasks before to be performed by businessmen,” he had said.

“They include satisfying consumer needs, creation of new industries, and introducing new technology to the country.”

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Businessmen in vehicle assembly, power cables, metals, apparel and packaging, and several industry associations and advisory committees had attended the meeting.

Motor Spare Parts Manufacturers Association, National Marine Manufacturers Association, Cosmetic Manufacturers Association, Rubber Related Products Manufacturers Association, Timber and Timber-Related Products Industrialists Association, Joint Apparel Association Forum had attended too.

Advisory Committee of Electrical & Electronic Equipment, Leather Industry Advisory Committee, Advisory Committee on Drug Manufacturing had also attended.

The Joint Apparel Association Forum represents competitive export-oriented businesses that do not exploit domestic customers with high prices.

Sri Lanka has been operating a framework of promoting geriatric non-export competitive businesses for some time with import protection. Sri Lanka’s apparel industry had developed without any import protection. (Colombo/June23/2020-sb)

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