He was speaking at the 15th Sri Lanka Economic Summit 2014, an annual event organized by the Ceylon Chamber of Commerce, under the title of "Sri Lanka 2020: Towards the $7000 Per Capita".
According to Central Bank annual report, Sri Lanka’s per capita income has increased from 2,922 in 2012 to 3,280 in 2013.
It is projected to reach 4,240 of per capita income by the end of 2015.
The Island is targeting to surpass 7000 US dollar per capita income to reach 150 billion dollars gross domestic production by 2020.
Shah urge the private sector to establish a strong partnership with the universities to improve the knowledge to enhance the quality of the products and services to match the demand of the future customers.
“Due to greater connectivity and easier access to information, “Consumer7000” would be more aware of what is available in the world and this in turn will make him or her more demanding,” Shah said.
“Our products and services will need to match up in terms of features, quality and price,” “They will demand global brands. We – the private sector - will need to compete with imports.”
“Do our product and service portfolios allow for higher input costs? Can our brands demand a higher price to offset the increased expenditure? Are we sufficiently innovative, do we have the R&D capability, do we have the technical skills and do we have the partnerships to meet the needs of “consumer7,000”?,”
“I urge the private sector to establish strong partnerships with the universities. The universities are an incredible reservoir of knowledge which the private sector must leverage for innovation & R&D.”
Shah said, Sri Lanka must strive for more inclusive growth not leaving the poor behind.
“We must not leave the poor behind. I was surprised to find that almost 75 percent of the world is poor,” Shah said.
“Those who earn less than USD 1.25 a day or approximately 5,000 rupees a month, live in the middle income countries,”
“Some of these countries have reached or are very close to a per capita income of USD 7,000.This is a result of a very wealthy minority skewing the data towards a middle income per capita.”
Sri Lanka’s national poverty headcount ratio has declined from 8.9 percent in 2009-2010 to 6.7 percent in 2012-2013, the statistics department data showed.
The lowest head count ratio of 1.4 was reported from Colombo district and the highest ratio of 28.8 percent has been recorded from Mullaitivu district.
Shah said a business would benefit more with a broad group of consumers earning a reasonable income rather than with a small group of very high net worth individuals.
Therefore he said, the net of development must be cast wide across all districts of Sri Lanka, not just a few.Public – Private Partnership
Shah said the Island regulatory system should be flexible to enable more investments and the private sector also should pay the taxes of the Government accordingly to build a strong relationship in going forward.
“To many, the relationship between the public and private sectors seem adversarial. Instead, it needs to be one of partnership,” Shah said.
“The Sri Lankan regulatory system as it applies to the private sector is in need of overhaul,”
“Many of these regulations are perceived as a deterrent to investment and doing business rather than an enabler.”
He said a consultative process between the public and private sectors is essential before new regulations are implemented.
“It would be beneficial if our labor regulations facilitated the creation of employment rather than suppressed it,” Shah said.
“Whilst the private sector seeks reform, it is also true that - at times - our actions don’t lend itself to that process,”
“It is common perception – mostly unfair - that we care for nothing but our next quarter’s bottom line, don’t pay proper taxes and use influence to bend the rules,”
“This makes the process of reform difficult.”