The Hon. Chathuranga Abeysinghe - Deputy Minister of Industry and Entrepreneurship Development

¶ 01 Thank you, Hon. Deputy Speaker. It is fitting to speak after Hon. Ravi Karunanayake. Those who drove the economy into crisis now lecture us on debt sustainability, yet in 2015 they issued ISBs at around 7 percent without a proper DSA, planting the seeds of bankruptcy. Some in the Opposition now allege we plan to borrow Rs. 3,000 billion; as the Hon. Professor clarified, that figure is a book entry related to debt exchange timing—if restructuring slips into January, we need settlement entries; it is not fresh cash borrowing.

¶ 02 To recover, we must change course to an export-led, productivity-driven path. Countries that grew did so with a national policy and development policy; Sri Lanka lacks consistent national and industrial policy. The State must enable the private sector; human capital must be skilled; rule of law must prevail; corruption must end; reforms are needed to attract FDI and integrate with global markets.

¶ 03 We are moving away from the 1977-onward neoliberal model. First, policy consistency: unlike India’s long-standing Planning Commission tradition, Sri Lanka has ad hoc, minister‑driven projects that bankrupted us. Singapore publishes its Green Plan 2030—entire education and economic systems align with it. We will build similar coherence.

¶ 04 Second, institutional structure: we are consolidating under the Ministry of Industry and Entrepreneurship Development a strong ecosystem—IDB, EDB, the Small Enterprises Development Division, NEDA, and the National Productivity Secretariat. Historically, these bodies were underpowered; we will strengthen them to truly facilitate industry.

¶ 05 The National Productivity Secretariat and lessons from works like “Great Quality Korea” show how to raise enterprise productivity, unit-cost competitiveness, and track improvements semi-annually and annually. The State must be a facilitator: reduce production costs via reliable power, logistics, banking, and rational tax policy. Current taxes suffocate manufacturers; within the IMF framework we will rationalize them. We will invest in skills and R&D, long neglected. Ease of Doing Business must be transformed: cut red tape through single-window solutions, end rent-seeking, and allow exporters to obtain certifications and licences swiftly.

¶ 06 Capital formation: development banking is essential. Countries like Brazil, South Korea, Vietnam, and India used development banks to channel capital. Sri Lanka dismantled its development banks under neoliberalism; we must restore development finance channels.

¶ 07 On trade, no country developed by throwing borders wide open overnight. Strategic, phased liberalization while protecting and upgrading domestic industry is necessary. Our “wild open” regime invited dumping and undermined local producers, fueling inflationary pressures.

¶ 08 Our vision for the recovery era is clear: raise exports from USD ~17 billion to USD 45 billion by targeted sectoral growth—IT from USD 1.2 to 5 billion; apparel from 5 to 7 billion; agri‑exports from 2.5 to 4 billion; port-related earnings to 3 billion; tourism to 8 billion. We will align public and private sectors to these targets within months.

¶ 09 We inherited broken value chains: raw material tariffs while finished goods enter freely; skills gaps; working capital constraints with no affordable credit; and a licensing labyrinth. We will go to industries—Ministers and officials will visit factories, review their targets and unit costs, devise tech upgrades, and help cut costs over five years. The era of entrepreneurs chasing officials and politicians ends now.

¶ 10 SMEs collapsed in the crisis. Unlike other countries that deployed large stimulus packages, the previous Government, constrained by bankruptcy, offered a meagre Rs. 20 billion line against an SME sector need of ~Rs. 350 billion; of 140 firms endorsed by the Ministry, only four received concessional loans; about Rs. 5 billion for NPL‑category firms remains undisbursed. We will fix delivery, not merely announce policies.

¶ 11 Specific bottlenecks: - Galvanizing costs have tripled, crippling the large recycling-based metals industry—no solutions were offered for a decade. We will. - SVAT: abolition in June per IMF would have crashed exporters; instead, we will implement a rapid, tech-enabled VAT refund mechanism to maintain liquidity. - Anti‑dumping: Sri Lanka Customs has allowed low‑quality, under‑valued imports to flood the market, undermining local producers—from natural rubber-based products like balloons to footwear and electronics. We will table new legislation next quarter to enforce standards, valuation, and anti‑dumping safeguards. - Textiles: VAT is levied on domestic fabric while imported fabric enters VAT‑free—this must be corrected. Our jewellery export volumes have fallen by 32 percent due to ad hoc tax measures; we will restore a science‑based regime. - Packaging: raw materials and inputs face taxes that erode competitiveness; we will rationalize them.

¶ 12 Minerals: the licensing process is so onerous that genuine investors avoid the sector; licences require monthly renewals and multiple annual reapprovals. We will streamline. Note India’s BIS—their national standards now challenge our exporters; we must upgrade our own standards to protect and promote domestic industry and support compliant exporters.

¶ 13 Competitiveness is not spontaneous; it is built jointly by industry, State, and people. We have 4,226 export firms and many domestic producers; our task is to lift system‑wide productivity so they can compete globally and capture value. We will reverse decades of mistaken policy and pursue a mixed economy where State, private, and cooperative sectors all play roles—following the proven trajectories of India, South Korea, and Vietnam.

¶ 14 Thank you.