The Sri Lanka Tourism Development Authority (SLTDA) this week admitted there was a problem with unauthorised foreigner-run businesses and that “all agencies have been rather complacent” during the last two years.
Now that the discussion has opened up, however, the SLTDA will see “how best” it can work with the Department of Immigration and Emigration and the police to identify these businesses while also taking steps to promote lawful investments, said Chairman Priantha Fernando.
“There is an issue,” he said, “and it hasn’t been handled in the manner it should have been over the last couple of years. All agencies have been rather complacent.”
Separately, tourism industry operators this week proposed wide-ranging solutions to meet the challenge in a manner that could attract and regularise foreign investment into tourism — without driving well-meaning entrepreneurs away.
There was consensus that, given how unlicensed foreigner-operated informal sector businesses are flourishing, ignoring them was no longer an option.
SLTDA puts its foot down
“We really cannot go ahead with unauthorised establishments or people without the right visas — for instance, tourist visa holders — doing business,” Mr. Fernando reiterated. “We will have to really come down hard.”
Like other observers, he apportioned some of the blame on Sri Lankans who lease their properties to foreigners who then market rooms to tourists. One school of thought is that clamping down will cause local communities to lose earnings.
“However, there is a formal way to do this,” Mr. Fernando insisted. “They have to fall in line. We are not against foreigners doing business because that will discourage investment. But if it is a large-scale operation, they must get approval from the Board of Investment and employ Sri Lankans, etc.”
“If they are a small and medium enterprise, they can hold up to 49 percent shares in a joint venture where the locals have 51 percent. They can then seek SLTDA approval.”
Under such an arrangement, the SLTDA recommends visas for foreign staff with specialised skills. At present, there are only 51 establishments for which the SLTDA has issued such letters. This means that the countless small businesses that “employ” foreigners run on the fringes of the law.
As part of a recent pilot effort, SLTDA officers visited seven places reported to be unlicensed. Of them, five had collaborations with locals who were running their businesses while the foreigners had residence visas.
Even if they were not registered with us — which was their only fault — they had some sort of registration and business licence. So this is going to be a major operation. ”
The SLTDA’s enforcement unit was disbanded nearly two years ago and government procurement procedures have slowed down its reactivation. They are looking to expedite the recruitment of new staff for it. “With the informal sector mushrooming, the number of permanent staff is not enough to carry on even our normal work,” Mr. Fernando said.
The severe backlog has forced officers to work weekends. An experiment with handing out temporary SLTDA licences at the provincial level had to be shelved because the quality and standard of those businesses that received them varied so much (“some were like cattle sheds”).
It is now the off-season in Eastern Province, so most tourists are concentrated in the South. “In a matter of three to four months, it will all shift to the East — Arugam Bay, Pasikudah, Batticaloa,” he remarked. “So we will try to bring in some control in those areas before the season opens up.”
sundaytimes.lk
