The Hon. Ravi Karunanayake

¶ 01 Hon. Deputy Chairperson, I am pleased to speak briefly on a Ministry that can truly serve the nation. When discussing the Ministry of Trade, Commerce, Food Security and Co-operative Development, rather than only talking of rice, potatoes, onions and coconuts, we must focus on policy and how to resolve today’s crisis.

¶ 02 First, on the Registrar of Companies: around 221,000 companies are registered; only about 50,000–100,000 are active. Why does registration take so long? Typically it takes 5–6 days, though it is said to be “online,” and costs Rs. 50,000–100,000 through lawyers. This must be improved.

¶ 03 On SMEs: they can operate as sole proprietors/partnerships or incorporate companies, but incorporation costs Rs. 50,000–100,000, which dissuades them. I urge the Minister to reduce incorporation fees for low-capital companies (capital under Rs. 500,000) to around Rs. 10,000, even with a single director. This would help access bank credit, trade and scale, and allow rapid online registration. Note that in Port City, 96 companies are registered in two days; an ordinary company still takes 5–10 days. Enable day-one online incorporation.

¶ 04 Please, Hon. Minister: implement reduced fees for companies with paid-up capital under Rs. 500,000; bring the fee to Rs. 10,000 to confer legal personality and unlock growth.

¶ 05 Next, the Consumer Affairs Authority under Act No. 9 of 2003 must truly serve consumers. Its original objective has drifted. It should protect consumers across goods and services, not only scrutinize big firms. Digitize its operations. Today, targets of raids often get tipped off. Consider outsourcing mechanisms or other models. Otherwise, bureaucracy dominates and efficacy is lost. Reform the mechanism, including oversight of state monopolies/oligopolies—gas, fuel, bread prices—where the CAA should act even when sector regulators (like PUCSL) exist.

¶ 06 I wish to recall my political mentor Lalith Athulathmudali, who introduced the Mahapola concept in 1981. Today, the Mahapola Trust Fund stands at about Rs. 20.5 billion and has supported 660,214 students. He rendered a great service to youth.

¶ 07 [Interruption by The Hon. Wasantha Samarasinghe regarding SLIIT and Mahapola finances.]

¶ 08 On SLIIT: important work has been done there; land was available and a concept emerged during Kingsley T. Wickramaratne’s time, with many capable individuals involved. Subsequent proposals came via another Ministry; later developments ensued. There are differing views and audit references; some matters were presided over judicially. If anything is due to Mahapola, we will not oppose it; we revived new life into Mahapola.

¶ 09 [Cross exchanges continue on SLIIT, audit, cabinet decisions, trust law and rents.]

¶ 10 We can examine these matters going forward.

¶ 11 Returning to trade and growth: Sri Lanka needs branding—country and product. “Pearl of the Indian Ocean” or “Gem of Asia” should be pursued consistently, not sporadically. Support brand leaders like Dilmah Tea, Spa Ceylon, Hela Clothing, and replicate success.

¶ 12 I appreciate when you depart from old dogmas and move pragmatically. Take the strengths of an open economy and discard the negatives. After nearly 50 years post-1978, there is still no credible alternative; use the good, drop the bad.

¶ 13 The President’s target—USD 36 billion exports by 2030—is laudable. Presently we earn about USD 16 billion. To reach 36, we must discuss “how,” not just “what.” Strikes/protests have reduced; capitalize on this stability to invite investment and re-onboard buyers.

¶ 14 On deglobalization pressures: apparel has about 850,000 workers; market shifts can hurt us. The Ministry must strategize risk mitigation and market access. Our domestic market of 22 million is small; expand market access through FTAs—India, Singapore, Thailand. I welcome movement on the Thailand–Sri Lanka FTA at the Committee on Public Finance; this is a positive change. Build “critical mass” via FTAs; move forward on India and China; even ETCA should be viewed constructively. If we capture even 2 percent of trade from a USD 10 trillion partner economy, our per-capita income could move towards USD 10,000 within a few years.

¶ 15 On GSP+: fulfil obligations. If terrorism is said to be over, repeal PTA and legislate modern security frameworks. Amend or repeal the Online Safety Act as needed. Recognize the burden on entrepreneurs: bank interest near 15 percent, taxes around 36 percent, and high utility costs. After all that, margins are a mere 2–3 percent. Adjust policy to help them.

¶ 16 On Service Export Tax at 15 percent: I argued at the Committee on Public Finance to remove it. IMF support helped us emerge from default, but we need not accept every prescription uncritically. Previously, when similar proposals came, we rejected them as distortionary. If you need Rs. 12 billion in revenue, consider a modest fuel excise adjustment of 25 cents rather than burdening service exporters. Your own Cabinet last week proposed 40-year tax holidays for Port City investments; do not, on one hand, encourage foreign investors while overtaxing local service exporters at 15 percent.

¶ 17 Government should regulate, not run business. Create competition, not monopolies. For rice imports, rather than the State bearing the headache, issue permits broadly and let multiple players compete—even if the tax is Rs. 70–80—while protecting both farmer and consumer.

¶ 18 We must reduce administrative burdens. Consider entrepôt trading—how Singapore rose. Lee Kuan Yew once said he wished to build Singapore like Sri Lanka; a decade later he changed his mind after seeing labour unrest. Today Singapore handles 45.5 million TEUs annually; we handle about 7.8 million. Push PPPs at ports—develop ECT, WCT—work with partners, including on power transmission projects like Mannar–Habarana if structured well. Establish a free port: aggregate, add value, and re-export to earn dollars and exit the debt trap.

¶ 19 Create competitive conditions in staples. Today, when rain arrives, rice rises from Rs. 150 to 250 per kilo. With competition, such spikes can be tamed. Do not give exclusive licences to a few; let Dudley, Arulnawaz, Hameed and others all compete so the Minister has fewer headaches.

¶ 20 On administrative issues: imported rice consignments, warehousing, and salt imports—spreading supply contracts across several parties would have avoided bottlenecks and reduced Ministerial headaches. Consumers often forget price reductions but fixate on small later increases; better to let markets function with fair oversight and enable entrepreneurship among the 159 Members’ constituencies.

¶ 21 Please re-examine the recent import allocations and State Trading (General) Corporation handling. Also, address any mismatches in distribution logistics swiftly.

¶ 22 Finally, nurture a progressive Opposition–Government working culture. We seek solutions—growing trade, building entrepreneurs, concluding FTAs—more than scoring points over onions and chilies.

¶ 23 Thank you. I will share further thoughts with you outside the Chamber as time is limited. Please do not signal right and turn left—or vice versa.

¶ 24 Thank you.