Sri Lanka Trade Development Council demands Govt. to save SMEs
Lanka Trade Development Council (SLTDC) recently demanded immediate action from the Government to protect the small and medium enterprises (SMEs) with a plan to Cabinet paper, warning they would otherwise bring all engaged in the sector to the streets.
The SME sector has been the worst hit by back-to-back blows since 2019, and the economic crisis has worsened the situation with most unable to operate their businesses or on the verge of bankruptcy.
The key demands of SLTDC include; immediately extending a financial relief package to all SMEs for one year whilst suspending all recovery actions, supporting the SME sector to convert businesses to export-oriented companies by providing special credit facilities and tax reliefs.
“SMEs are the live wire of the economy that helps to at least maintain it in this dire straits. We have been the worst hit with triple blows since 2019. Yet, the resilient SMEs managed to continue despite internal and external challenges.
But now, we have exhausted ourselves with no support whatsoever from the authorities. Hence, we submitted key proposals to the Government to implement immediately to protect the SMEs,” SLTDC Chairman Roshana Waduge said. .
He said the proposals were submitted to Prime Minister Ranil Wickremesinghe, Industries Minister Dr. Ramesh Pathirana, Trade Minister Nalin Fernando, Labour Minister Manusha Nanayakkara, and Justice Minister Wijeyadasa Rajapakshe requesting to table as a Cabinet paper.
“We strongly believe that the Central Bank could have been more proactive in supporting the SMEs, but they have kept mum about it. Therefore, we made the request to the Government and hope they will take immediate steps to put forward a Cabinet paper next Monday before the sector collapses,” he added.
Waduge said it was sad that the gravity of the economic crisis and the urgency to protect local businesses has still not been comprehended by the political authorities.
“In other countries, SMEs are the first to be taken care of as they represent the backbone of an economy. However, in Sri Lanka, the banking and financial sector is killing the already crippled SME sector with recoveries and legal actions, while imposing high-interest rates of 30% on facilities obtained previously at low rates of 7-8% in an unfair manner.
“If the SMEs collapse, it will have an unimaginable adverse impact on the economy which will lead to an increase in unemployment, poverty, and scarcity of products and services,” he explained.
SMEs make up the largest part of the economy, accounting for 80% of all businesses whilst contributing to over 52% of GDP, and 45% of the total workforce accounting for 4.6 million employees engaged in the sector.
SLTDC Vice Chairman Indika Sampath Merenchige said the ignorance by the Government will only lead to economic peril.
“If the political authorities ignore our appeal to protect the backbone of the economy, we assure to take the lead for the next phase of people’s struggle by taking the baton from them. It will mean 4.6 million people in SMEs taking to the streets,” he warned.
Merenchige said the urgency today is a complete system change and not just the 21st Amendment to the Constitution. “We need consistent national policies to ensure economic development, stability, and sustainability,” he pointed out.
He claimed that President Gotabaya Rajapaksa did not appoint representatives from the SME sector for his Economic Council Advisers, adding that all are chosen from large-scale companies.
“They should at least appoint a steering committee with SME participation to protect the local entrepreneurs,” he said.
Merenchige also requested the SMEs not to act like cowards when they know they are being maltreated.
SLTDC Vice Chairman Ajantha Nallapperuma claimed the Government had no plan to protect local industries or SMEs.
“The difficulties people face today have just scratched the surface of the deeper economic crisis. If no immediate actions are not taken now, no one will be able to survive the economic blow within a month or two. Unfortunately, the 225 MPs and senior Government officials responsible are not understanding the gravity of the crisis seriously,” he added.