Harry says rest of Asia reaping benefits of rapid private sector-led investments

Whilst acknowledging progress, business tycoon Harry Jayawardena has renewed his call for a more enabling environment to boost private sector investments to a desired level, warning that rest of Asia was fast reaping benefits of such strategy.

“The region offers many examples of how enabling environments have thrust their private sectors to the forefront of international business: the many world-leading Indian entrepreneurs are a case in point. Our Asian neighbours such as Cambodia, Laos, Vietnam and Myanmar– all recovering from their own protracted internal conflicts – are reaping the benefits of measures taken to promote private sector participation and encourage investment,” Jayawardena said in his Chairman’s Review in Aitken Spence Plc’s 2011/12 Annual Report.

“Sri Lanka is yet to garner the level of investment momentum anticipated two years ago; while some international brand names have already commenced investing in Sri Lanka there are further opportunities to exploit the market. There is a fundamental need for a coherent and enduring policy framework that fosters business."

" The creation of such homogenous policies will support the entire nation to seize the remarkable opportunity created by President Mahinda Rajapaksa’s defeat of terrorism,” Aitken Spence Chief added.

He also called for meaningful public-private partnership which he said was vital for Sri Lanka to reach its full economic potential and become a business hub.

“The private sector led by the large corporates, demonstrated utmost positivity and belief in Sri Lanka even during the war, and now with business conditions having undergone a post-war metamorphosis, it is imperative that the Government facilitates a level playing field to empower and encourage the private sector to achieve its ambitions,” Jayawardena emphasised.

“The continuous slump experienced by the traditional power bases of Europe and America offers Sri Lankan businesses an opportunity to push their boundaries and explore beyond our shores. The time has come for Sri Lankan business to think big and firmly place our country on the international business landscape,” he added.

Though calling for improvements, the Aitken Spence Chief commended the one-stop-shop now operated by Sri Lanka Tourism for those interested in entering the industry.

“The facilitation body is a much-needed single point of contact and has clearly eased the processing and coordination complexities faced by investors. We sincerely hope that the unit will be strengthened further in the coming year, as many of the world’s most powerful leisure brands have shown genuine interest in entering the local market. Embracing the big names by wooing them with suitable land and other incentives is vital for a small country such as Sri Lanka, considering the benefits of shared destination marketing,” he said.

Focusing on the private sector itself, Jayawardena said in its efforts to help the country reach its full potential, the corporate sector must contribute to the equitable development of the north and east. “Much effort has been made to encompass the newly-liberated areas in to the mainstream economy, but much more remains to be done. This is natural, given that the region must recoup 30 years of missed opportunities,” he said.

“Infrastructure development in the north and east must go hand in hand with efforts to create suitable opportunities and thereby empower the citizens of the former battlefront,” Jayawardena added.

He also called for urgent and cohesive measures to address the growing shortage of skilled and qualified human resources by resolving shortcomings in the current labour force and making youth more employable.

Noting that the country’s reliance on fossil fuels was also a concern, Jayawardena stressed it was important that the country forges towards alternative sustainable sources of energy in order to diminish our overdependence on petroleum.

“Despite these concerns, I reiterate that the potential Sri Lanka offers to serious investors remains undiminished; it is a market on the cusp of a new future, with expanding economic opportunities that complement the Asian economic thrust. Sri Lanka will continue to be the focus of the Aitken Spence Group’s expansion plans; we will continue to invest prudently in growth areas of the economy and play our part in leading the country’s corporate sector,” Jayawardena said.

In his review the commendable performance of Sri Lankan economy amidst external shocks in 2011 was also highlighted. “Upbeat sentiment enabled the economy to be somewhat insulated for the better part of the year. The country’s infrastructure development must be highlighted, as physical conditions conducive to international business continues to improve at a rapid pace. The investments in infrastructure over the next few years will no doubt bring extraordinary opportunities for Sri Lanka,” Jayawardena said.

In FY2012, Aitken Spence posted a consolidated profit after tax of Rs. 4.7 billion for the year, a growth of 37.4% over the previous year. The net profit attributable to the shareholders stood at Rs. 3.7 billion which is the highest ever for the Group. Taking the growth in profits into consideration, the Board has proposed a dividend of Rs. 1.40 per share which is an increase of 40% over the previous year.