In an interview with Daily FT in Singapore, the Goldquest fame founder of QNet and currently controlling shareholder of Asia Capital shares key insights on the way forward for post-war Sri Lanka
Locally he is famous for the wrong reasons, but remains faithful to Sri Lanka. His past predicament also could be common to some misunderstood yet sincere and successful entrepreneurs.
Apart from being married to a Sri Lankan, his roots have Sri Lankan blood as well. While signs of once-bitten-twice-shy syndrome appear in him, the man Vijay Eswaran of Goldquest or QuestNet fame (now rebranded as QNet) is quite frank and articulate and he remains passionate and bullish on Sri Lanka.
What characterises him best is that he has remained faithful to his convictions and persevered with what he started. Having realised the true long term potential of Sri Lanka much before the war ended, Vijay, living in Malaysia, was a prolific investor in the Colombo stock market and outside in the early 2000s. Since then Vijay has exited from most with good capital gain. Some of the investments made were via his Company and others under his personal name.
Whilst certain allegations against him such as running a pyramid scheme or pyramid-type scheme are yet to be legally proven (no local court has made any adverse findings against him or his business so far), Vijay perhaps with valuable lessons learnt is now more circumspect. His current flagship investment in Sri Lanka is via the controlling stake in Asia Capital. This is a personal investment and Asia Capital has achieved a tremendous turnaround of late. Post-war, Vijay is also scouting for fresh opportunities in several emerging and high potential sectors.
The background to his business is that amidst the Asian economic crisis and dot-com rubble in late 1990s, a group of friends led by two charismatic personalities set up a multilevel marketing business in Manila, Philippines, known today the world over as QNet. Founders Vijay and Joseph Bismark later led a team of enthusiastic, hardworking, young and corporate-savvy entrepreneurs to set up international business in Hong Kong. On his own web site www.vijayeswaran.com, Vijay, QNet Group Executive Chairman, is described as not only as a successful entrepreneur who founded a multimillion dollar global conglomerate, but also a bestselling author and a well-known speaker. Today QI Group has interests in retail, travel and leisure, telecommunications, watches and luxury products, wellness, training and education, technology and corporate investments.
Daily FT recently met up with Vijay in Singapore on the sidelines of his company’s launch of cricket spin wizard Sri Lanka’s Muttiah Muralitharan as the Brand Ambassador for QNet’s energy, wellness and lifestyle products for three years.
This article encapsulates Vijay’s key insights as to how Sri Lanka can get it right post-war, especially in terms of achieving high socio-economic growth, creating an enabling environment to boost investments by both foreigners and locals.
President Mahinda Rajapaksa and his Government must be commended for ending terrorism, which prevented Sri Lanka from achieving its true potential. However, to better harness the post-war opportunity Sri Lanka must strategise well and walk the talk.
Given its strategic geographic location midst important trade lanes between East and West as well as being neighbour to one of world’s fastest growing countries – India, Sri Lanka is blessed with the potential to be an economic hub.
What Sri Lanka makes out of the natural confluence is important because it can be lost unless used properly.
If countries as well as companies stop reinventing themselves, they are in ruins. The secret behind successful nations and companies is they have endeavoured to reinvent to overcome adversity or challenge successfully or harness unfolding opportunities better.
Now that peace has been won, the Government must further focus on creating a more conducive enabling environment for new investments to take place. If this is done the Government doesn’t have to go world over in delegations to invite foreign investors. First create the policy, step up facilitation, improve key infrastructure as part of having an enabling environment and the long-term foreign investors and foreign direct investments will flow in.
Let me cite a very basic example. If you have a smart and beautiful daughter, you don’t have to place an advertisement in the matrimonial section of a newspaper. So it is important for a country and a Government to put its house in order first, upgrade the standards, benchmarks, improve efficiency and have the right policies.
Under this enabling environment the Government has an upper hand in picking who they want from a long queue of investors coming in. Unless this is done the danger is the Government out of desperation being forced to accept a multitude of unsolicited proposals from investors who may not have a long term interest but rushing in with an agenda or to make a quick buck.
China is a good example. Two decades ago Shenzhen was a dead village. The then Chinese leader sought advice from two architects of the economic miracles of Singapore and Malaysia, after which decided to set up the country’s first FTZ and as a pilot project created the enabling environment. The then Government didn’t go visiting foreign countries but investors who are always on the lookout for good locations for investments moved in, starting with Hong Kong.
It is also important for the Government to rely more on private sector-led FDI than bilateral foreign assistance. Some of the seemingly lavish donors in emerging Asia pick poorer countries with an agenda largely political when giving bilateral assistance generously.
Africa today is a good example where billions of bilateral assistance gone waste with the continent being the eventual loser than the gainer. Sri Lanka has valuable lessons to learn from the African experience. So the best course for the Government is to be preoccupied with attracting FDI.
Sri Lanka also must encourage the Diaspora to come back or invest in Sri Lanka. Not a single foreigner can be as passionate about Sri Lanka as a Sri Lankan itself. The invitation to the Sri Lankan Diaspora must be sincere and consistent not piecemeal. There must be a special and concerted strategy. Sri Lanka need not look far but to its neighbour India as to how to do it right and get it right in terms of attracting the Diaspora.
The US and Europe economies are ailing and we are in the Asian Millennium. Asia is dynamic and the world’s fastest growing led by China and India. There are a host of successful economies and models in Asia especially in the East; hence a ‘Look East’ policy is timely for Sri Lanka.
It is through aggressive reforms that a country can progress rapidly. The emphasis should be private sector driven than otherwise. Relying on the state sector to drive the economy, run strategic enterprises etc isn’t the best strategy. What Sri Lanka is trying to do today China did many decades and failed.
The success of Singapore is that the country is managed and run professionally like a corporation. Taking certain ideas, models, strategies piecemeal won’t help Sri Lanka.
For example, the Temasek model of Singapore is dynamic in its fuller sense and a country could replicate it to achieve the desired results only if the model is embraced and implemented in its entirety. Nevertheless Temasek’s larger mandate is managing Singapore’s reserves under which it owns and manages the Singapore Government’s direct investments, both locally and overseas.
In the long run the case for and against a state sector driven strategy is dictated by two choices – popularity versus profitability. A government can remain populist via a state enterprises driven strategy but it will be at the expense of profitability or burden on the Treasury, which in essence means a tax on the people.
Given its true potential, I made my first investments in Sri Lanka amidst and despite the war. With a new era of peace now, personally I remain more passionate and bullish about future of Sri Lanka though i had some disappointing experiences in the past.
Whilst QNet as a corporate entity makes its own investment decisions based on a host of factors by a professional Board of Directors, at a personal level I am keen to pursue a few emerging sectors such as renewable energy as well as tourism.
Through Asia Capital we are also keen to expand in the financial services sector which has to play a pivotal role in the rebuilding of Sri Lanka both economically as well as socially.
Asia Capital has achieved commendable turnaround of late and this momentum will continue.
All of the three core operations of the Asia Group are profitable – Securities trading and investment banking; deposit mobilisation and credit; and insurance. In the first quarter of 2010/11, Asia Capital’s operating profit has increased to Rs. 196 million (up 206% from Rs.64 million. The bottom line growth for the first quarter was 25%, compared to the same period last year.
QNet is a dynamic wellness and lifestyle company designed to enrich the lives of its customers worldwide through an exclusive product portfolio and a unique business opportunity. The products range from personal care, nutrition, cosmetics, body and water energisers and home care to collectible coins, jewellery, watches, holiday packages and telecommunication products.
Products are marketed via over one million independent representatives. Its major markets are in South East Asia where the Company was founded, Southern Asia, Northern and Central Asia, the Middle East and Africa whilst its distributors are active worldwide. QNet is on course to expanding into Europe, North and South America.
Notably the company has a strategic alliance with B.H. Mayer’s Mint Germany, one of the oldest and privately owned mints in Europe. In 2006, QNet acquired a Swiss watch manufacturer in Zug, Switzerland allowing 100% in-house design and manufacture of Bernhard H Mayer luxury watch and jewellery line.
These products are included in the portfolio which Muttiah Muralitharan will be endorsing as Brand Ambassador. QNet is also the recipient of the coveted VeriSign Cyber Trust certification, recognising safe, secure and stable online transactions.
Through innovative lifestyle brands that engender high brand loyalty and satisfaction, combined with local, on-ground support and services,
QNet has established itself as a global direct selling company with a strong Asian heritage. By offering a proven ecommerce business opportunity to promote the company’s products and services, QNet represents the potential for additional or sole income for business entrepreneurs.
In 2005, the QI Group acquired a UK-based independent telecommunications provider with a strong background in providing advanced communications solutions and technology in the United Kingdom. In the years that have followed, this investment has been responsible for QNet’s world-class technologies provided through its In-Voice telecommunications brand, which had been launched in 2004 and offers mobile phones and economical Internet-based communications.
Just under 15 years QI Group today has extensive interests in retail, travel and leisure, telecommunications, watches and luxury products, wellness, training and education, technology and corporate investments.
For CSR activities it has a fully fledged ‘RHYTHM’ Foundation whilst QI Group also practices and promotes vegetarianism as a means of raising awareness about global warming, animal cruelty, preserving the environment and benefits of a vegetarian diet. In line with this principle, QI Group serves only vegetarian meals at all corporate events and functions.