The Hon. Ravi Karunanayake

¶ 01 Hon. Deputy Chairperson, I am pleased to join this Debate. Let me begin with the impact of Free Trade Agreements (FTAs). I am happy the Government recognizes the importance of market access and has moved with FTAs: the Sri Lanka–Singapore FTA has been ratified and is progressing. Tariffs and para‑tariffs—Customs Duty, CESS, PAL—are being liberalized, with the objective of opening markets on both sides.

¶ 02 Sri Lanka, with 22 million people, lacks sufficient consumer demand to be competitive domestically. Accessing larger markets creates scale and a competitive edge with lower unit costs than producing only for our market. As with India or Pakistan, the way forward is to make our manufacturers more competitive and take products globally.

¶ 03 While opening up, we must negotiate reciprocal access and ensure non‑tariff barriers (NTBs) do not block our entry. Too often, our products meet NTBs abroad. Bureaucrats and Ministers must ensure NTBs are addressed. Accessing Japan, China, the EU, ASEAN, BRICS, Thailand, etc., is essential to give our world‑class manufacturers the needed edge.

¶ 04 A major current problem is delays in cargo clearance at the Port. Even as we speak, about 2,800 containers are stuck. When 35 vessels call, they cannot berth, and turn away. Exports are hampered; our entrepôt model—importing inputs, adding value, re‑exporting—is undermined. If we cannot bring in raw materials, exports suffer. Around 12,000 lorries serve this business; 2,200–2,300 are idled for 6–9 days due to non‑clearance. We need immediate policy action: operate 24/7. That alone will enhance competitiveness. Expedite steps: many of our exporters import inputs, add value and re‑export; now that cycle is broken. Typically, 10 days import, 10 days export; orders must be met in about a month. Customs officers are working hard; Mr. Arukgoda has referred to the Sri Lanka Standards Institution (SLSI). Despite the President’s instruction to operate 24/7, SLSI did not attend work for seven days, including a recent four‑day long weekend, citing unavoidable reasons—further slowing operations. Such willful inaction by any Government institution is unacceptable and detrimental to import, export and entrepôt trade.

¶ 05 We must exit the debt crisis by increasing exports; borrowing to repay borrowings is untenable. My considered view: operate Port, Customs and SLPA 24/7; fully implement ASYCUDA and the single‑window system.

¶ 06 Also adopt pre‑clearance before shipment arrival. When a container leaves origin, process documents so clearance happens on arrival, followed by post‑clearance audits. Today, consumers ultimately pay demurrage—Rs. 200,000–300,000 per container—often the entire profit margin. As we emerge from bankruptcy, we must ease business costs. Reduce demurrage through competitiveness. Political leadership must drive decisions; do not leave all to officials.

¶ 07 When 35 vessels turn away, we deprive ourselves of raw materials. Every rupee of depreciation costs the country Rs. 56 billion; a 1 per cent rise in interest rates adds Rs. 160 billion in costs. To remain competitive, urgent action is needed.

¶ 08 A Notification under the Strategic Development Projects Act is before us. I strongly support granting incentives. Without incentivizing investors, who will come? The IMF may say many things, but if a project creates jobs, brings forex and supports the economy, the Government must grant benefits. The IMF can have their say; the Government must have its way.

¶ 09 We discussed the Eravur Project at COPF. I am happy the BOI has reversed its earlier stance; that is the correct direction. Had then‑Chairman Dhammika Perera been there, approval would have been granted in a day. Decisions must be taken. Mr. Dinesh Weerakkody also tried but faced resistance. Consider not only IRR but also Economic Rate of Return and Cost–Benefit Analysis.

¶ 10 In short, increase exports or we will fail. Management and financial discipline are necessary, but the Government’s willingness to decide is essential. Thank you.