Our dependency riddled independence

When made “Independent” Sri Lanka was the Switzerland of the region, it has been opined, developmentally second only to Japan (miraculous given the carnage and wreckage there at the conclusion of World War II). And now, we are perilously close to being considered a failed state – Pic by Shehan Gunasekara

So, it’s time, high time, to state a vision, to build trust through our institutions and through our leadership behaviours, to make heroes out of those who can deliver and execute and see things through, and to catalyse talent and the latent brilliance of our people. Anyone who doubts this is possible for Sri Lanka cannot, must not, be allowed to be a leader. Our challenges are too real, the crisis too deep, for anything other than “radical humanism” and ‘radical possibility” to work

So, in the aftermath of 4 February, first and foremost. Sri Lanka, like so many of your weeping sons and daughters, those leaving you, personally bereft, grudgingly but desperately, and those hanging on, clinging to the wreckage, working, hoping, pining for a turnaround, for revitalisation, I first send my love and admiration for your character, your spirit, your civilisation, your poetry, your mythos, your ethos, your musicality, your heart, your warmth and hospitality, your indomitable, welcome-gushing essence. I salute you, I embrace you, I celebrate you…and I weep for you.

When made “Independent” Sri Lanka was the Switzerland of the region, it has been opined, developmentally second only to Japan (miraculous given the carnage and wreckage there at the conclusion of World War II). And now, we are perilously close to being considered a failed state. Bangladesh facing far greater headwinds over its history has secured over $ 4 billion in IMF support in a few months and its exports flourish, and we continue to flail and flounder. We are facing an existential economic and social crisis, and we must, must, ensure we do not waste this crisis and use it for the purgatory it must be. 

India, Singapore, Sri Lanka

Jim Rohn, the performance specialist made the astute point, “You can’t hire someone to do your push-ups for you.” And sometimes, struggle is what uplifts, and chastens and informs.

India’s convulsions, the rupture between the Hindu and Muslim communities, the struggle for emancipation from the UK, has led to a messy but impressive trajectory. India has flirted with political chaos and certainly economic ruin too. But it has stoked dynamism and a mania for talent, and despite ethnic divides, Muslims have played key leadership roles. There is an impressively functioning Constitution and a credible rule of law overall. 

Singapore again, convulsively came into existence having been “spun off” from Malaysia, isolated, with no resources other than its geographic positioning and its wits and credible, committed leadership. But again, the West was mined for its lessons, and Singapore also maintained a healthy rapport with China, and built infrastructure, cultivated a talent pool, and provided an operating theatre for global enterprise. It became a first world country in roughly three decades, economically.

Sri Lanka was bequeathed independence from the British, and alas rather than needing to overcome the legacy of past history as with India and Singapore, Sri Lanka had an enviable opportunity which was successively squandered. 

Ethnic hatreds mushroomed into civil war, the hard-won peace dividend after 2009 was undermined by expanding the military further and investing in “machismo” projects decoupled from value. 

Post-Civil war, it was “leadership by strutting around” and militaristic nationalism gave way in the next electoral cycle to a sadly ineffectual, feckless political partnership, and so then the autocratic palliative was sought again. 

And a further three years after that, still no justice or closure for the Easter attacks of 2019? To what avail then the vaunted military and intelligence infrastructure? 

And outstanding issues clamour for leadership, the type that should have marked the celebrations: Even with the tax hikes, how to address the budgetary shortfall? Why can a “wealth tax” not be debated? What of human rights and reconciliation? What about the staggering cost of the military (arguably not needed in the main) and the unsustainable cost of the government bureaucracies (ineffectual and clearly incompetent)?

What is the way forward?

There are four essential levers of Leadership. The first is building credibility and trust and creating a culture anchored in that. Clearly, at the political leadership level, it is a test we are failing. 

Huge amounts borrowed from China and India to fund public services, many of which never materialised. Enormous developments were “sold” to the Chinese (the docks at Colombo for example). None of this came close to servicing the debt. That entire issue was taboo as a point of discussion.

Monsoonal rains hit farmers hard, and then came the monumental “Green” caprice of banning fertilisers. There was no balancing act, such as a gradual shift away from nitrates to nitrogen restoring crops between the main harvests. This was immediate, outright, and crop failures abounded.

Of course, there was political pandemonium galore, the Easter bombing, the Covidian hysteria leading to plunging tourism (which along with the devastated tea crop, is a major forex earner). 

Credit agencies swept in with downgrades, and two thirds of the reserves went to servicing debt and importing food and fuel. Up went the prices, skywards flew inflation, with food inflation going above 80%! Then in the courtship of the IMF, another overnight travesty, the floating of the rupee, making crucial imports even more dear and rare.

Daily lives we recall became nightmarish queues for fuel, basic commodities, so much of which had to be rationed in a country that prior had plenty of food and was at least heretofore optically “developing.” 

Shops shut as they couldn’t operate without electricity or afford diesel for generators. Curfews made a brief reappearance, national “states of emergency” were asserted. This solved nothing, it simply endowed the authorities with ever more repressive powers, being able to enter property, searches, arrests, detention without warrants, interrupting social media platforms. 

And we all know what happened next, and the baton was constitutionally passed. Unfortunately, “incompetence” gave way to threading the needle, placating donors, keeping the domestic coalition that underwrote the new Presidency intact, and desperately seeking to pull the country and its economy back from the literal precipice. 

To truly win back trust our “theory in action” has to match our “theory in use” and we need some gameplan, and that almost presupposes the next leadership requirement studiously missing, a Vision. 

Wayward vision

Vision needn’t be grandiose, it just needs to set direction, be aspirational, and paint a future that is not a continuation of today’s woes, but is larger, more compelling and relevant.

A simple vision, yet a transformational vision for Sri Lanka could be, “To be a services, IT and human capital hub for South Asia” aiming say for 3-5 years. It could be, “To be a first world country in a decade.” These get the blood flowing. But in themselves, here grandiose declarations will be a tad like the misfiring theatrics of the national day celebrations, in Macbeth’s words, “full of sound and fury, signifying nothing.” 

The Japanese and Singaporeans and South Koreans and now the Vietnamese have made scant speeches, but their actions have been developmentally eloquent, and the sustained focus and commitment to what enriches and uplifts their countries has by and large been profound. 

But talk needn’t be cheap, it can a la Churchill galvanise a nation “we shall never surrender”, or like Lincoln be used to “bind a nation’s wounds.” 

And so, metrics can be forthcoming, not only on the financial front, in terms of infrastructure and jurisprudence, in terms of capabilities and bandwidth and legislative transparency, in terms of education and developing human capital, in terms of social justice and reconciliation. 

And we can finally make our peace with the fact that there is no “national security” without “economic security and social development.” Otherwise, we are either at everyone’s mercies or tearing ourselves apart.

We can track governance, commercial relationships with various markets, moving at last towards value added exports, re-establishing food security and agricultural self-sufficiency. We can at last “crack the code” on tourism and stop applying banalities and bludgeons when aesthetics, service and imagination are called for. 

And we can aim to be that hub, to be an exemplar, well we can aim for anything productive and sustainable and valuable that will advance the interests of the Sri Lankan people. 

We can’t though just take the low road of making the IMF the ultimate prize or being “against” certain parties and not being able to explain what we are “for.” Agitation is not leadership. And vision if genuinely galvanising, brings us together and can call forth greatness rather than what we’ve been trading on – hubris – which calls forth only cronyism, mediocrity and mendacity.

Tourism: A case study in strategy and execution

We see a curious inability to mobilise for action on so many fronts. Let us just take the tourism situation as a case study. As I’ve written we gathered a group of eminent attendees, who committed to supporting the Government to build tourism numbers and profits for Sri Lanka. The initiatives were compelling and were well received in the private and public sectors. And then, from the Government, no action or follow up has been forthcoming that we are aware of. 

What I am presenting here has been presented by tourism leaders to authorities, passionately, plaintively, with urgency and has been “listened to” but clearly not “heard.” 

We see everyone indicating that a national PR campaign is desperately needed. As the global narrative still seems to be that Sri Lanka is a tinderbox, there is no food, no fuel, things could fall apart at any moment…     

Of course, the world merrily traipses to real hot spots like Brazil, parts of South Africa, Israel, and rightly so, exercising prudence and due caution. Countries like Cambodia are full of high paying tourists, many more arriving there than here. Though the range of attractions are narrower, they are beautifully managed, presented and communicated. 

Even regionally, people are being told to shy away, and not being able to find ketchup in supermarkets or hotels bereft of basic ingredients for dishes and wines and spirits doesn’t help. 

We have to hope there were few tourists around on the national day weekend, as everything was shuttered, and the “disconnect” between leaders and led was palpable. Adding insult to injury, tourist hotels couldn’t serve alcohol, and you saw glum, numb tourists sitting around lobbies. “Oh, but resident guests can drink in their rooms.” Usually, that is for serious drunkards, people don’t come to beautiful places, to be gulping alcohol in their rooms. 

But back to communication, we continue to see statements from Keells, the Tourism Alliance, High Commissions, even the Indians when visited, asking why we are still mum, and not engaging the narrative. I was told a PR agency was commissioned. Their work seems invisible and silent. 

And if a “campaign” is being marshalled as we are occasionally told, we can take little comfort from that unless we are clear on the concepts, the appeal, the niches we are seeking to reach, and therefore reach out to with our communications. 

The favourite trick of flashing (admittedly ravishing) pictures of flora and fauna, and monkeys and elephants, and people in native attire won’t do it. Lovely as it all is, many places in the world have beaches and wildlife and indigenous music and arts and crafts. Just flashing that, without showing the “value addition” to that our tourism offers is close to useless. 

How can we continue to “encourage” tourism while implementing actions contrary to its promotion in terms of price/tax increases which negate the competitive edge of the industry?

On the one hand the highest infrastructure expenditure has been in the tourism industry, it is considered the largest civil industry. 7% of the total loans granted by the banking industry were approved for the hospitality sector. The stakeholders represent a very mature coalition.

Disregarding most of that and the abounding treasures of the island, successive ministers have yet to state a vision, a strategy, or any concise, steady long-term policy with related decision making. 

Instead of encouraging tourist arrivals, we have increasing visa fees and entry fees that are getting prohibitive. Suddenly there was a mad renewal of PCR testing demanded, happily ignored and removed. 

One of our initiatives was to revitalise the welcome website visitors see (unchanged now for 12 years). But no one could suggest who “owns” it and therefore who should be engaged or would authorise that. Eventually private sector people, no matter how well intentioned, move on, believing this is about posturing and not policy.

The financial moratorium is no longer and is to be offered on a case-by-case basis. Since the industry is mainly made up of small and medium-sized industries who need this support, we are likely to see a further spike in bankruptcies here. 

The hospitality industry I am told by key leaders has been levied undue amounts in taxes, rents and rates. For example, electricity is charged at a tariff of 65%, whereas other industries are charged at 35%. Rationale? Due to the nature of the business, the tourism industry incurs a high usage of electricity and having such high tariffs retards recovery or challenges viability even.

Likewise, rates and taxes for the hospitality sector are levied up to 1% of total revenue earned, whereas in the case of other industries I am informed, the levies are fixed amounts and negligible. 

For this industry, diversification opportunities are limited. It is human resource intensive, and if you lose those skills, you cannot serve your visitors and guests. 

Were the tourism industry to unravel, there is a population of close to 3 million whose livelihood will be affected. 

Our policies are strange. Visas and bureaucracy are stifling. We want digital nomads. But their visas are only for 30 days at a time. And unlike say Thailand, each month they must return to Colombo and queue and go through the morass of renewal, at least a day’s undertaking with related travel and other expenses. In Thailand, you are welcome to tally up at departure and pay. That is not a “fine” it is an allowance to facilitate and to ingratiate. 

On the other hand, there have been a spate of tourists, like our Russian friends who have set up businesses, booked and subcontracted villas and those funds are not realised here, but there are no regulations prohibiting such activities. Locals suffer, the national exchequer does too. 

The impact of tourism languishing has ripple effects too. Say a hotel is set up, it buys potatoes, the farmer becomes dependent, the fertiliser supplier becomes dependent, those working in nearby towns or villages become dependent. There is an ecosystem here and it deserves to be safeguarded and nurtured and fostered.

Despite a 2,600 old history, and gushing natural warmth, we do not “spot” invest in key roads or make simple educational and human investments like having latrines washed hourly on “luxury” trains to keep them habitable and attractive. The IMF is not required for this, the ability to focus, to plan, to execute and follow through are critical disciplines. 

In fact, we read that with fuel uncertainty, and therefore change in flight patterns, tickets to and from Sri Lanka are getting more expensive. We hear that if we lose just a few more air traffic controllers, essentially flights will no longer be tenable. This is the “news” that seeps out worldwide. And we have to both contest the narrative and the reality.

Tourism recoveries globally post-COVID are about 46%, Europe 60%, USA 66%, places like Vietnam are booming, Morocco is back over 80%. Our part of Asia, 10% or less. 

We have national assets and human assets that if combined into offerings and offered with real service finesse and acumen would flood us with foreign exchange. All these multiple warring tourism entities with endless committees are a dysfunctional reality. If we had 2 million tourists one year after the Easter bombing, why should we not aim for 6 million in the next few years? 

And why oh why do we have to be the most sluggish regulatory regime relative to setting up businesses, granting visas, or letting people who want to live here do so?

Even the UAE now offers visas for those who wish to “explore” establishing a business and a life there. As long as you can cover your costs, why prohibit you from renting, living, traveling, entertaining, making relationships, testing propositions, adding to the mix of talent, even if not immediately ready to invest? 

Make it easy to set up business, bring in talent, let companies invest here as an HQ. Let’s use our high education level, our cosmopolitanism, our elan, the spirit of the place, to entice, woo and beguile capable, successful people to settle here, whether or not they want to buy a villa.

Human capital 

And this is where it all finally lives or dies. The great national breakthroughs since the end of World War II were harvested by and largely in countries without a surplus of so called “natural resources” except the most fundamental “natural” resource, people. 

Japan has no natural resources, has to import virtually everything and went from decimated and occupied to the world’s second largest economy for decades, and even today, the world’s third largest, the other two being the US and China, with staggering size and volume advantages. Consider South Korea, consider Singapore, consider Vietnam (despite the coal advantage), remarkable dividends from human capital. 

The great cities of the world were hotbeds of productivity (not sitting atop oil wells) and had the ability to invite and inspire human enterprise and commitment and passion. Just think New York and Hong Kong for example in the 20th century. Both attracted the best and due to the tacit competence gathered became incomparable seedbeds for potential and development.

Sri Lanka needs to mobilise its educational system; it needs to develop merit-based performance development and management practices. Plato once wrote, “What is honoured in a country is cultivated there.” Look at what we truly honour and what allows someone to prosper here, and we will find what is being incubated. 

Singapore Inc. made “bureaucracy” synonymous with competence rather than “bureaucratic effectiveness” being almost an oxymoron. The “how” was straightforward. Hire the best, demand the best, set metrics, provide rewards accordingly, demand accountability, ensure results improve the productive capacity of the nation.       

The biggest crisis in virtually every Sri Lankan company today is inadequate talent development, a death grip on control by so called senior management and very poor succession planning. Turn this around and we get enormous dividends. 

The economies of the future will put a premium on those who actually produce value or multiply it by collaborating with others. The place where jobs are currently being jettisoned is in the so called “management layers” globally. People divorced from work who bark orders at others, rather than being exemplars, role modelling excellence, coaching in the trenches, and realising that listening broadly and evoking great performances is what leaders do. 

Leadership is at all levels a “contact sport.” It requires more “high touch” than it does “high tech” and you cannot “systematise” it beyond a certain point. “Managing” ponderous structures will become more and more dated, unaffordable and blatantly ineffectual in a world that needs lean, innovative, resilient and responsive.

Independence revisited

So, it’s time, high time, to state a vision, to build trust through our institutions and through our leadership behaviours, to make heroes out of those who can deliver and execute and see things through, and to catalyse talent and the latent brilliance of our people.

Anyone who doubts this is possible for Sri Lanka cannot, must not, be allowed to be a leader. Our challenges are too real, the crisis too deep, for anything other than “radical humanism” and ‘radical possibility” to work. 

We have made national spectacles of our hopes. We are overdue to make those hopes sane again, real again, by making national development a “crusade” we all empower and endow and make real, behaviourally and institutionally, every day.

(The writer is the founder and CEO of EPL Global and founder of Sensei Lanka, a global consultant with over 30 years strategic leadership experience and now, since March 2020, a globally recognised COVID researcher and commentator.)