Momentum Forum moves development discussion forward
Thursday, 18 December 2014 00:02
By Marisa Wikramanayake
Members of the business community came together yesterday to discuss the ideas for how Sri Lanka could develop in the future.
Secretary to the Ministry of Defence and Urban Development Gotabaya Rajapaksa (third from right) speaks at the Momentum Forum concluding panel discussion at Galadari Hotel yesterday. Others from left are Chevron Lubricants Managing Director Kishu Gomes, Cargills Ceylon Deputy Chairman Ranjit Page, Secretary to the President Lalith Weeratunga, Moderator and Daily FT Editor Nisthar Cassim, Central Bank Governor Ajith Nivard Cabraal, Jetwing Group Chairman Hiran Cooray and MAS Holdings Group Director Dian Gomes. See more pix on Page 14
The Momentum Forum, termed the first synchronised conference in Asia, took place simultaneously across four venues in Colombo, the Galadari Hotel, the Cinnamon Lakeside Hotel, the Cinnamon Grand hotel and Hilton Colombo Residence, using live video streaming technology to ensure that more than 3,000 delegates were able to participate.
The Forum was organised by the Professional for a Stable Sri Lanka to allow the business community to deliberate on how to move development in Sri Lanka forward and to showcase the Government’s plans for developing the country, particularly the planned Colombo Port City project and the development at Hambantota.
Security and stability
The Secretary to the Ministry of Defence and Urban Development Gotabaya Rajapaksa addressed the delegates via a live video feed from the Cinnamon Lakeside Hotel on the importance of security and stability to the country’s urban development. He took the delegates through a history of events from the start of the war to the present day emphasising that the climate of fear and suspicion that the war engendered made it hard to develop the country or attract foreign investors.
“Safeguarding our hard-won stability, security and sovereignty is the most important thing,” he said. “Sri Lanka’s sovereignty will only remain stable if the government remains strong.”
Biz community involvement
Cargills Deputy Chairman and CEO Ranjit Page opened the proceedings at the Galadari Hotel and stated that it was important that the business community become more involved in the development process.
“Sri Lanka has to be built and developed with institutions; institutions that are sustainable,” he said. “Companies have a role to play in development and they must play that role.”
He also stressed that this was how Japan had developed after losing World War II and suffering massive losses and damage. “It was the brands, the companies and the institutions that made Japan what it is today,” he said. “Not the state agencies.”
He also stated that it was worth revisiting and looking at the attitudes towards business that underpinned each company, and stated that this was what Cargills had done, beginning in 1999.
“Can we send money to rural Sri Lanka instead of sending it overseas?” he asked the delegates, pointing out that this would help develop the country. “It is for Sri Lanka that we work – it is not for a company or an individual.”
Partners in development
President Mahinda Rajapaksa then addressed the delegates over a live feed from the Cinnamon Grand Hotel, encouraging them to participate in the plans for the country’s development.
“We wish to make you partners in this pattern of development,” he said. “This will allow the private sector to be part of the country’s economic growth. This is your opportunity to be involved in and part of this country’s future.”
He also stressed the importance of getting things done and not losing momentum in striving to develop the nation. “Good governance is about getting results,” he said. “If you have achieved what you wanted to, then there has been good governance.”
Following President Rajapaksa’s speech to the delegates, a panel discussion was held at the Galadari and broadcast live to the other three venues. It featured Secretary to the President Lalith Weeratunga, Cargills Deputy Chairman and CEO Ranjit Page, Central Bank Governor Nivard Cabraal, MAS Holdings Group Director Dian Gomes, Secretary to the Ministry for Defence and Urban Development Gotabaya Rajapaksa, Jetwing Chairman Hiran Cooray and Chevron Lubricants Managing Director Kishu Gomes and was chaired by Daily FT Editor Nisthar Cassim.
Excerpts from the panellists’ answers to questions on issues of development, governance and security follow.
Q: What is good governance? Can you clarify President Mahinda Rajapaksa’s statement?Weeratunga: Governance can mean very different things to different people. People can criticise the decisions made regarding development but they then also need to understand the processes, both practical and legal, behind those decisions. If you are building a road or a highway, people may criticise the costs involved but those costs have always been there. There is a cost to hire a contractor and to pay for the road and to provide compensation for the land and we have a due process to follow, set down in the Land Ordinances from years ago, that we must abide by. If you don’t understand that, then of course you will criticise the costs involved.
Cabraal: Governance is all about delivery. Governance is measured by the delivery of results. I have been overseas to study what makes good governance and if the results are what was expected then there is good governance. If they are not what was expected then that is bad governance.
Q: What about the costs involved in achieving results? Does that not impact on the question of good governance?Cabraal: With regard to costs, an example is that of the debt trap idea. You have to look at the debt in relation to the GDP. That ratio has decreased over the last five years significantly. It means people have a better standard of living. And this is backed up by what is happening on the ground as well. People are enjoying a better standard of life because even though the debt seems high, the GDP has increased, people have more income per capita and the ratio between the debt and GDP has decreased.
Rajapaksa: The war is also a good example. Why were we able to end it in three-and-a-half years? It had gone on for 23 or so years and other governments were unable to end it. They tried military solutions and talks and nothing worked. It was just a case of better management. You had better leadership and management so you had better results and ultimately you had better governance. And now you can see how we have developed the country and the plans we have to continue that.
Q: On the subject of development, we have had recent floods in Colombo despite all the development going on? Rajapaksa:Yes, in some parts of the city we have had flooding. The issue is that the canals – they were built and maintained during the time of the Dutch and the Britishers, and they maintained them but they have not been maintained or cleaned since. But we also have the city growing and there are low lying areas that are then subject to landfill and this is an issue because they are the catchment areas for the rain. So this is why we are planning and starting to build lakes and we are doing some of this work around the Pepiliyana area now. To many it looks like beautification but when we build lakes in low catchment areas, it is part of the maintenance of the canals to prevent flooding. We could not maintain these canals and areas during the war but we can address it now and are doing so.
Q: What about the issue of unsolicited proposals? Some would argue that there isn’t much transparency.Cabraal:There is a system in place for taking on and assessing these projects and proposals. And I would say that there is a lot of transparency. We are not making deals in secret. The thing is that if a country such as the UK wants to fund a project, then they will want a UK contractor to do the work and we have to allow that. It is the same thing with China. If China wants to fund a project, then it will want a Chinese contractor to do the job. The thing is, no government will provide money so that you can hire a contractor or company in another country. You have to be practical about these things. If a country funds a project, then that is one of the constraints that we have to work with. There is a process then where each proposal or project has to be evaluated and sometimes some projects and proposals come before the Secretary to the President and there is transparency but people have to understand the process involved.
Rajapaksa: Now on the issue of land being available, let’s take the case of the Shangri-La hotels, for example. A global brand such as Shangri-La coming on its own initiative has great benefit. When a proposal like Shangri-La comes to BOI they want land and come to the UDA to check availability of lands which is also available on the web. When a good investment proposal comes to the BOI – I don’t know how you can categorise that as an unsolicited proposal. Do we reject that proposal or do we say “No, wait we will advertise this.” Via BOI Shangri-La had said they would like land near Galle Face and UDA accommodated the request given the importance of Shangri-La investment
Q: What role do multinational or global brands have to play in the future development of Sri Lanka? Kishu Gomes: You will find that in every key sector, there is a presence by a multinational company. It is important for local companies to think of crossing borders. One advantage of multinational brands and companies working in the country is that the local companies and entrepreneurs and businesses get a chance to compete against and learn from them and this can start them thinking about how to compete not just locally but globally. I think that is one big advantage of having multinational brands in the country. Local investment is good for the country but it is also dependent on your business model. The Government has the right polices covering Foreign Direct Investments and local investment. You have to think about how your business model allows you to compete both locally and in foreign markets. Local consumers and global businesses is the way to think.
Q: There is some question of whether tourist numbers have gone down? Is this an issue? What is the future of tourism in this country?Cooray: I think tourism is in its second birth. It is now a time not to just build hotels but also different experiences. We should build everywhere else in the country as well – not just in Colombo. As for numbers, we had an issue during the war where we had to convince people to change their travel advisories just to get people to come. No one wants to travel to a place even if it has great beaches and things if there is a war on. We have, since the end of the war in 2009, seen the numbers creep up and till 2013 this was due to tourists coming back because things were stable and secure and the war was over. It’s only this last year, in 2014, that we have been massively promoting Sri Lanka as a tourist destination. And our numbers are not declining. The number one ingredient for tourism is safety and stability. Build sensitively and build with sustainability in mind. We are also seeing what we call the informal part of the sector growing where we see tourists coming in but they are staying not in the hotels but in local homes and spare rooms. And this is good because we want to see everyone benefiting from the tourism industry. Tourism is for everyone in the country.
Q: What is the biggest issue facing the apparel industry?Dian Gomes:The biggest change and factor is definitely the cessation of the war. We used to have to travel overseas to present and prove to various investors that our processes were ethical. We now have to be more productive and competitive. The challenges will come internally. For example, and this is just a possibility, people may now want to work in the leisure industry rather than in the apparel industry. If the tourism industry suddenly has a capacity of 7,000 jobs, then we need to make sure we have 7,000 people who want to work in the apparel industry because people may prefer to switch to working in the tourism industry instead.
Page: Competition is very healthy. What needs to happen now is for companies to continue ethical processes and practices and to then invest some profits into the human resources side of things, into development.
Q: A question for the Central Bank Governor; what do you do about the fact that people don’t believe your statistics? Cabraal: We release figures daily, weekly and monthly. There are some people who refuse to believe the statistics because they want those numbers to be different. We go overseas and talk to major investors who don’t take our statistics at face value so they verify them and there are external organisations like the World Bank and the IMF that verify them as well. But these investors part with a lot of money to invest in the country and they would not do that if they did not believe or verify the statistics. There are also people in the local business community who depend on these figures released daily. And you can see this working out on the ground as well. We report that GDP is increasing and that the standard of living is getting better and you can see that in the way where if you go to a park you can see thousands of people walking and enjoying themselves and they are wearing nice T-shirts and tennis shoes that they can now afford when maybe they couldn’t before. So that backs up our statistics that things are improving – you can see it happening on the ground. So we need to go beyond the rhetoric.
Q: What do you do about corruption? Weeratunga: I would like to answer the question about corruption. I am looking at the Transparency Index. In 2002, our rank was 51% - the higher you are, the more corrupt you are. And this measures the perception of how corrupt your country is. In 2014, it has come down to 49%. And there is also a score as well as the ranking. Zero is the most corrupt and 10 is the least corrupt and in 2002 we were at 3.7 and in 2014 we were at 3.8. The word ‘corruption’ is a perception thing too – what are you referring to when you say it? And I will admit that we have been called corrupt. The thing is that there is a system for complaints. There is a Bribery and Corruption Commission but it won’t accept anonymous submissions and we do this to protect people so we can allow them to complain if they feel that they have been accused of corruption.
Q: Everyone is courting China because China has the money but Sri Lanka is one of the few countries that China is investing in. What’s different? Cabraal:China has invested in the US in bonds to over a trillion dollars. But when people complain about China’s involvement – they call China an economic hit-man – I think we have to be very careful about this. We have to be pragmatic. China is the largest global economic power. There have always been different countries at the forefront of investment. There were the Portuguese in the 1500s, then the Dutch, the Spanish, the British, then later the US and Japan and now it is the turn of China. China wants to see Sri Lanka develop and Chinese tourists will be our biggest market in the tourism industry in the next few years. Are we really going to say that we do not want them investing in the country? We need to be very pragmatic about this.
Q: Certain ex-Ministers have referred to a mafia situation that prevents things moving forward in development and business? Cabraal:I don’t think there is any mafia that does exist. The point is that, even if it did exist, then if you knew of it in the private sector but did not deal with it, then it shows that you are incompetent and incapable. You would not get anything done if you met a challenge and then said you could do nothing because there was a mafia involved. It does not reflect well on you. What would have happened if the Secretary to the Ministry for Defence when he was appointed to handle the war said he could not do anything because there was a war mafia? I could have easily said I couldn’t do anything in my role because there was an investment mafia.
Rajapaksa: This is the thing. When I was travelling from my residence to Police Park, I passed three separate piles of garbage on the road. When I asked the Environment Minister why this problem was not being sorted out, he told me that it could not be solved because there was a garbage mafia. After the conflict, I sorted out the garbage mafia in two weeks.
Q: Is there a disconnect between the Government and the professionals and private sector? Rajapaksa: In that sense the research and development is very important. One project that I started was the Expert City – in the old Tripoli market. And for this we had several professionals from different sectors come together to pool their knowledge and to create new products and ideas.
Weeratunga: The Government can set the policy but it cannot do more without the private sector. If you look at ICT for example, that’s one sector where the Government and the private sector work very well together and you can see the benefits and the results already in the increase in our ICT literacy rate. Unless you are referring to a set permanent forum where the Government is on one side and the private sector is on the other and things can be discussed and debated. But I can tell you that there is interaction between the two.
For example, when our Budget is put together, our President Mahinda Rajapaksa discusses the issues with the various groups of people including professionals first. As he said before in his speech, he will do what he says he will and he will consult the public before he goes through with his plans. And this is what we do with the Budget. We start with the Budget planning in July and we present it in November, though this year we were early in October. From July onwards, President Rajapaksa meets with various groups to assess their needs so that they can tell him what does work, what doesn’t, that this policy hinders this industry or that they need more of something else so that the Budget can be worked out to the best outcome for everyone.
You asked me what set President Rajapaksa apart from other previous leaders. President Rajapaksa is decisive. Whenever he has to make a decision, he makes it. Previous governments and leaders, I cannot name them, but I can tell you that he is more decisive than they were. They would wait before making a decision and try to talk or try to put forward a military situation and in the meantime that would give the LTTE time to build their military back up.
I have been in the public service for 30 years and we need politicians – politicians bring the vision, the demands of the people to Government and we in the public service have to make it work, which is why policies and strategies can change. But President Rajapaksa has always made sure that the people know what he plans to do. That is the way you do things in a democracy. In fact, I use the archives a lot and I often send people to find certain things for me and I have found four instances of when there were decisions made on which the public were not consulted, all during the regimes of previous governments.
There was the Indo-Lanka Accord in 1987 and we know what happened there. It was signed and suddenly we had nine provinces to oversee. The public was not told about that. Then there was the CFA – the Ceasefire Agreement signed in 2002. Again, the public was not informed of this and we stopped fighting and allowed the LTTE to effectively set up a separatist, autonomous state. We know how that turned out. It didn’t last. Next came the P-TOMS, negotiated in secret and again not set before the public. The last time the public was not involved in a major agreement was the Interim Self-Governing Authority where we gave them the ability to self-govern and run their own state until basically we could come up with a political solution to the entire issue. So you have had all that happen but now we have a Government that will tell the people what is going on. As President Rajapaksa said to you, he will do what he says and he will inform you of what he plans to do. And today he has informed you but also allowed you the privilege of being part of the development of the nation.
Pix by Upul Abayasekara