Finance Minister Ravi Karunanayaka


Following is the speech delivered by Finance Minister Ravi Karunanayaka, the chief guest at the 80th Annual General Meeting of the Import Section of the Ceylon Chamber of Commerce, held recently at Hilton Colombo Residences.

Members of the head table, distinguished invitees, ladies and gentlemen. Firstly let me thank you at the outset for inviting me here today to speak to you on topical subjects and ease certain fears that are there and to give assurance that we are a government on the move. I came with a prepared text; however the Chairman of the Import Section Dinesh de Silva was so keen on coming out with certain solutions to some of the questions he posed and I thought to myself, let me take the bull by its horn. 

Eighty years ago, setting up the Import Section and promoting, coordinating and supporting the interest of the imports of trade is indeed a great achievement. And I must say with distinction it was done with a lot of finesse and a lot of professionalism and there seems to be a sense of continuity that goes on unlike many other institutions that are there, that spring up and vanish off as quickly as they come in. 




The intention of the chamber is to bring a sense of unanimity among all the importers but let me first question if whether that exists in the importers. I was just telling Dinesh, just before my speech, I don’t seem to see the sense of harmony that exists among the importers as much as what the chamber would like to do. This exists in all other chambers. There should be a sense of togetherness. If you look at countries like Pakistan, Egypt & Bangladesh, governments are brought to their knees by the chambers and I have been advocating this because I see there is no sense of togetherness whether it’s in exports or imports in Sri Lanka. I was trying to do this when I was the Trade Minister in 2001 – 2004; some took advantage and others took advantage on ex-officio points. I call upon all of you senior officials and businessman here to inculcate this. When you look at it in the short run, if not, we will step in as a government move, trying to force every importer/exporter through a chamber so that you get a sense of togetherness or a collective sense of negotiating on many matters. 

You all are talking about grey imports, etc., but I was just telling your Chairman that at least 10 percent – 15 percent on a daily basis seems to be trying to penetrate to the system from a devious manner. We got Dr. Neville Goonewardena, former Director General of Customs, I am sure he will bear testament while we are trying to correct this, we don’t see that there is no sense of urgency that exists in the market. 



Short-term opportunity gained is what they are looking at rather than long haul that you just pelted. I am sure many of this come from the change that the people of this country did take on January 8. There is tremendous change in the democratic process. And I see when things going good, people are kept to go on and I hope the same situation will prevail continue after August 17 when things are going good, let things go without a problem. We have seen things happening now and we could see what was not existing for the past 11 – 12 years suddenly coming in the 150 days made things to happen; a small matter to ponder on and get things moving from a different direction. 


Do business with ease 
As the Chairman expected me to respond to some of the questions, I thought the first thing that we have brought into the system is trying to do business with ease. I am sure the last three months you have seen a significant change in the attitude of the government servants. The mindset has to be changed and what we thought was under the leadership of the prime minister, who entrusted me to take command of doing business with ease, we brought in many institutions that take decisions in the country to come before the investors’ small, medium or large to come and highlight the problems they confront. 

Sometimes the problems we see may differ from their angle. But yesterday was the third meeting we had and I must say things are improving tremendously. And I called upon the chambers to come in there, not as chamber representatives, but standing on behalf of the members who were represented and let them come in to the forum and address the issues that they have and I am sure you see that there is a quick resolution that will come by doing business with ease. 

The other one is that as a government we have been trying to be very coherent, consistent and in a continuous manner that with quick decisions and I am sure you would have seen some dramatic changes, have been done in the short run. Even with a minority government, we have dared the system and have been successful because that is what the people are expecting today. The government institutions that are being entrusted to do this, I must say are learning quickly; the intention of the government and responding to certain matter. 

We have got the Commissioner General of Inland Revenue today and you could see a mindset change there as well; you could see revenues are going up, hassle is less and as a result you could see a wanting to work towards this business sector. Now Chairman, you mentioned many matters you wanted me to address. First on the Sri Lanka Ports Authority (SLPA), as the Chairman is here, and my freight forwarding guru, my friend, Diren Hallock is here today. He basically gave an idea, in fact it’s his brainchild; he gave this idea 15-20 years ago. He got the airport airfreight division, the cargo village, to come up with a concept where the FF gets 80 – 90 percent cargo either LCL or FCL to ensure you have delivery system that exists in the aviation (air cargo village). And I think the same thing may be good to be replicated in the SLPA, as there have been delays that are there due to the lack of efficiency that exists in the SLPA. 
So just telling the Chairman, that it’s a good idea to ponder and come up with the importers’ deficiency and for the FF associations and see if you can replicate the same type of thing under the abled guidance of the SLPA and allowing the FF and the import section to step in and have a public-private partnership; nothing wrong there. They still charge the same but you can do the work. So that’s the way we like to bring the sense of efficiency coming in so that maybe an area the Chairman of the SLPA that you can basically liaise with them and try to see how you can get it going. This maybe a way forward because there will be much more shipments to come rather than what is going on at the moment because as you could see there is a great urgency in developing imports and exports in this country and we have taken upon that this country needs to export and on that basis we will facilitate everything possible in order to get to that target. 


Merchant Shipping Act 
Then the Chairman Import Section was asking about the many unresolved issues. You mentioned the connectivity to other entities. As I basically call all of you’ll and given time till end-September as the time that all these institutions will be connected online and I am sure the Inland Revenue has already begun the migration. So as a result you will find the entities working on a 24 x 7 on a single window basis. The time frame given as end-September and I call upon you as the Chairman to get involved in to that committee. The problem is that you’ll like to come in but don’t get involved in the system. So please ensure that you have a member permanently on that committee so that you can flag any delays that are taking place. This is a complete change in the government approach that is there. We, the government, don’t think that we know it all. You’ll are there; we have to service you’ll so come in to the system and ensure that you take advantage. Dr. Neville Goonewardana is in the committee as well and ensures you give the ideas that are there. 

Then trade disputes; the merchant shipping act needs to be changed and certain things will be looked in if there has been delays. But except for one or two matters, I have not seen that there is a stumbling block. But if there are any precarious areas that are there, that is concerning you’ll, please do come forward and we will ensure you’ll that those matters are put to rest. Determining import values are one of the major problems that are there and the Director General of Customs was called today in the morning and we have placed a review panel that basically looks at the valuation that goes on because it is very subjective. It basically is in the hands of one or two officials that they decide as to what the value would be. This is very prominently displayed in the valuation of cars, etc., and I had taken the initiative to try and ensure this is completely rectified and once again Dr. Goonewardena’s knowledge is being tapped and I’m sure it helps to facilitate the process. I did give instructions yesterday to ensure that this beefed up and not to make it a talk shop there but to ensure things happen there and you would see that you would be once in 2 weeks meetings are convened and within that 2 weeks any problems that are unresolved will be referred to and a quick resolution within the day will be provided. That is only going to determine the true valuation. Now to further improve this I would invite you’ll nominate a member from the Chamber of Imports and we will put that also in to the committee. Already 3 people are in the committee nominated by myself and by adding the 4th person, we would like to see that you walk to talk that is there. So you have a problem, you are within that as long as there is no conflict of interest you can go and make the decision. Because we have seen that the revenues we collect is far less than what is anticipated to be collected and that’s the reason why we are doing this correct actions so help us to collect the revenue that is desired and reduce the burden that is on the people. Because taxes are there from all corners but we don’t collect the revenue that we got to collect. So that’s the pursuit that we basically believe. 


Delays in clearing 
Then delays in clearing; I don’t think it is something significant because I’m sure the SLPA chairman is on this and there is a good team there. My general feeling is that we could have a higher efficiency that goes on so that it will help to reduce cost and help ships to move out quicker but certainly it’s within tolerable limits. But certainly if there are any delays, ensure that you have a close consultation with the SLPA and I’m sure you will be able to resolve matters fast. 

The dangerous goods is once again the same. But I’m sure if you look at the SLPA tying up with freight forwarders and the interested parties are able to come with a solution which will be a quick fix solution. Then the scanners I did ensure that this scanning process would be put to place because we see revenue erosion one of the biggest problems that are there and very sad. So I had given the Customs a task of trying to bring the scanners in by end of August / September but realistically we were trying to implement by the end of the year. My feeling is by October you would have a system in place. We will be having trial runs, we will simulate the system that is there and from January we will ensure that every container would be fully scanned so that you will be able to ensure that the quick clearing that goes on. The only problem that is there is the general scanning is that you have a drive through operation which is not as effective as it could be. The next stage the efficacy is much more unfortunately it’s about 4-5 times the cost. Now the cost per container is something which you are mindful of and we are trying to do a POT operation to ensure that the government doesn’t just carry on investing on unwanted areas and have obsoleteness in our hands. But we find that there is a very good responsive approach that is there and we will definitely finish this by October. 

I feel the country is improving and have realized things are going on and this is the only way you can leap in to a better technological era and put Sri Lanka, the miracle of Asia. 

The next one is the policies; I am sure it is nothing but coming from the private sector, knowing what you’re saying is it has to be consistency, continuity and basically effective nation making. This is something that we will try to do at our best. But the only problem is trying to have changes of duties, but there is certain matters that have to be taken when it comes to agricultural commodities, you have to have that quick resolution because when the domestic farmers have to be protected, there has to be a mechanism that is fair and comes into protecting both ends. So these are the areas that you will have very few interventions by the government that doesn’t have this consistent coherent policy. 

So ladies and gentlemen I basically think your Chairman did ask pertinent questions which is relevant and timely and I am hopeful I was able to answer many of your problems that you have. But as you know, a person from the trade, who belongs to your area and able and looking forward to seeing that there is quick resolution and quick clearing process ensure that the 24 x 7  clearing process is still not put to good use. I mean there are much more things that can be done. Ensure that the process can make you reduce your costs and ensure that you have proper planning is there. 

You could see that there is professionalism coming to government departments. But only thing that is expected of you is that it doesn’t come cheap. Because today government servants are getting much decent salaries than what they were getting before; but it’s still not good enough compared to the private sector. So with that mindset, that’s why we gave a substantial salary increase which was not given for 10-11 years we gave it in 29 days. But that has certainly given a much more motivational approach and all I want from you’ll is walk the talk. You have the right to question. You should ensure that you have the same thing backed up that enables to take command of those particular things you are questioning. We will open the doors, but don’t shut the doors on your side. 
Thank you very much for inviting me today and we are there responsive and you don’t need to have 1 year more to have the minister coming to answer your question. We have an open door policy where you are able to contact the ministry and be able to have our officials helping you, our government institutional heads will respond to you. But even if you unable to get any satisfactory answers to any of your questions, I’m there to respond to you. 
Together let’s revolutionize Sri Lanka.