Friday Dec 13, 2024
Friday Dec 13, 2024
Thursday, 26 September 2019 02:36 - - {{hitsCtrl.values.hits}}
Panel discussion moderated by well-known professional Dr. Rohantha Athukorala
The National Chamber of Exporters conducted the above forum in the Main Ballroom of the Marino Beach Hotel, Colombo 3 on 3 September. Three well-known business leaders were the main resource persons who highlighted their experiences related to the main issues which impact the business climate in Sri Lanka. The presentations were followed by a panel discussion. 
The panellists were four women business entrepreneurs, and leaders in their respective specialised fields related to exports. The panel discussion was moderated by Dr. Rohantha Athukorala, a well-known professional. The forum was attended by a large number of private sector CEOs of export enterprises, and other stakeholders.
99X Technologies Ltd. Founder Chairman and well-known business leader in the field of Information Technology Mano Sekaram, in his address highlighted the following:
The vision for 2030 should encompass firstly the security of the nation and the security of the community, and secondly discipline of the nation as in the case of Japan, and South Korea. To achieve this the need of the hour was decisive leadership not based on politics, but national needs.
It is imperative to create value systems among employees at all levels, and prevent waste and corruption. For this purpose it is necessary to elect honest politicians who cherish democracy, and for the different segments of the economy to be led by experts, and professionals.
Every sector of the economy needs to have an export outlook focusing on one market place, which is the world. In this regard it should be noted that the current Fourth Industrial Revolution is taking place through the disruption of traditional processes, and through the creation of new value chains. Some examples which highlight this was the display of the first ‘Three Dimensional Printed Garment’ at the Paris Show, and the adoption of Hydroponics in agricultural production. To achieve this a high-tech, and skilled labour force is a necessity.
The Information Technology (IT) sector which began with meagre Export Earnings $ 50 million, today earns $ 1.5 billion for the country as opposed to the tea sector which took a relatively very long period to achieve this goal. The per capita income of the IT sector is $ 15,000, and the industry was built through the efforts of Sri Lankan entrepreneurs during the darkest era in the country.
The challenges faced by the IT sector are the brain drain of local talent, which is the key to attract investments into the sector, and the disparity between the supply and demand of professionals in the sector. While the sector currently requires 21,000 technical graduates, the country currently has only 9,000 graduates.
In order to climb up the value chain to exploit opportunities in international business it is imperative to innovate production processes and also to develop skills in specific areas. For example while the Philippines has 1 million sea farers, Sri Lanka has only 8,000 sea farers.
Laughs Group of Companies Chairman and well-known business leader of a diversified business conglomerate W.H. Wegapitiya, in his address highlighted the following:
Although Sri Lankan political leaders have presented ‘many visions’ since independence, the country has fallen behind in the Global Prosperity Index. Hence, all visions have failed.
The sectoral strategies related to the economy have no cohesive force for value development. The country has never had a well-aligned National Economic Policy while the various policies are not aligned in one direction. The current National Export Strategy (NES) is only a micro strategy.
Out of the 22 million people in the country only 8.4 million people are economically active. Out of this number 1.1 million are employed in the Government sector, while the 3.4 million in the Private sector are the real value creators engaged in 22,400 enterprises. The country cannot create exporters unless entrepreneurs are created.
The economy of Sri Lanka is a consumption economy, and not a manufacturing economy, while other countries are engaged in hi-tech manufacturing sectors. On the other hand Sri Lanka has 1.1 million three-wheel drivers.
While the country earns $ 1.5 billion through the export of the main plantation crop (tea), the country spends $ 1.1 billion for the import of pharmaceuticals. This shows the need to support indigenous entrepreneurs to engage in import substitution and also to embark on exports. The current 1% of entrepreneurs in the country need to be increased to at least 2-5% through the adoption of desirable National Economic Policies.
The country has valuable resource endowments including oil and gas deposits, coupled with a strategic location. However, no political leadership is provided to make use of these.
Stassen Group of Companies Chairman and well-known business leader of a conglomerate of diverse businesses including export-oriented enterprises Harry Jayawardena, in his address highlighted the following:
Politics has ruined the progress of the country. There is no discipline and the Rule of Law that prevails today is shown by the many demonstrations that take place on our roads.
It is necessary for the country to learn from the mistakes of the past 30 years. The vision of the first prime minister of the country, D.S. Senanayake which laid the foundation for the development of the agriculture sector through colonisation of certain parts of the country, is commendable. The country was a closed economy up to 1977 with encouragement to produce and exchange within the domestic economy. In this context the British Colonial Masters need to be thanked for introducing an entrepreneurial approach to exports wherein many foreign companies were engaged in production for export.
The creation of many monster corporations by the State over the years have not paid the desired dividends. An example is the Petroleum Corporation.
The country has failed to make use of valuable resource endowments. For instance in regard to the fisheries sector although the country is surrounded by the sea, the marine resources are exploited mostly by others, while the catch is sold locally.
In 1956 the country had only 11 ministries. However, today there are a large number of ministries with diverse and incongruent functions with severe negative impacts on the business environment, and the economy.
It is imperative to elect honest politicians and decision makers if the country is to progress.
The panel discussion which followed comprised the following panellists, in addition to the three business leaders:
Some of the issues that were highlighted at the panel discussion were as follows:
In Sri Lanka value addition takes place in production and manufacturing sectors such as agriculture and apparel. However, in the agriculture sector productivity is low. In countries such as Singapore value addition takes place related to hi-tech products such as electronic and electrical products and where the productivity is much higher.
It is necessary for the country to focus on technology development. However, there is no political leadership to drive such an approach. For an instance the country has the world’s best graphite deposits which has great potential, and awaits the production of a range of value added products such as graphite products. The country has no clear trade policy and administrative structures to make use of the available resources.
In regard to strategies for development, Sri Lanka is a country with the lowest investments in research and development activities. For example the valuable ilmenite deposits of the country are exported in the raw form, while value added products such as titanium dioxide are imported. However, in countries such as the US the Government takes the initiative to invest to make use of such resources, and to encourage companies to export.
The country should have a skilled labour force to engage in value addition activities. For this purpose it is necessary to think out of the box, and to effect fundamental changes to the education system to achieve this objective. For instance out of 200,000 students who sit for the Advanced Level Examination only around 30,000 are able to enter the universities for higher education. With the balance dropping off, some of them become three-wheel drivers.
Sri Lanka is no longer a country that provides low cost labour. In this context it is necessary to add value to products through engagement in research and development activities. In the 1980s and 1990s the garment sector comprised around 800 companies. However, the sector now has around 200 companies, while many of the middle men, and agents have been eliminated. The sector has been able to capture upper-end markets with their own Research and Development (R&D) activities.
The country has been able to attract Foreign Direct Investments (FDIs) mainly related to infrastructure. Policy support is necessary to attract beneficial investments to the manufacturing sector.
The Logistics Performance Index of the country is very low, and the country does not have adequate capacity in this sector.
The functions of the large number of line ministries are unrelated, while representations made in this regard have been unheeded. There is no visionary leadership to overcome such issues.
The Taxation Policy of the Government has much to be desired, with sectors that are performing well coming under the radar for taxation oblivious to the impact on the economy. For instance the promising Information Technology sector is taxed at present. This demonstrates the failure to execute meaningful policies.
The country should not have fears of foreigners purchasing assets in the real estate sector, since such assets cannot be taken away. The country therefore needs meaningful policies in this regard.
The Government needs to encourage Public-Private Partnerships in Research and Development activities. The need is for application related R&D.
Forums that are conducted at present such as the ‘Ease of Doing Business Forum’, and the ‘Exporters Forum’ only serves to deal with the day-to-day activities of enterprises, and not policy issues.
The Chamber proposes to discuss the issues highlighted at the forum, with the sectoral business leaders in the chamber, and present them to the presidential aspirants with a view to obtain pledges from them for implementation.
