SRI LANKA-Messy Pie

increased enormously. This has had an adverse effect on the market and consequently on the profitability of the capital goods sector.
In the absence of local technological development, the domestic capital goods sector meets almost all its technological needs from abroad. Technology is a critical factor of production that is closely guarded by the TNCs. It is leased under myriad restrictive clauses, so much so that TNCs do not really intend to transfer technology at all. The restrictive clauses in the licence agreements for leasing of technology are designed to prolong technology import, prevent assimilation and inhibit adaptation, A common clause in such agreements is the limitations that the supplier imposes on the recipient regarding the sources of supply of raw materials, spare parts, intermediate and capital goods. The foreign collaborator thus makes it possible to charge higher than normal prices for these commodities.. In a report submitted last year to the director general of technical development by the Mantosh Sondhi Committee on import of capital goods, it was found that, in many cases, import of process plants had been permitted because the foreign collaborator had refused to stand guarantee if the process plants were procured from sources other than those recognised by it.