Tuesday, 29 April 2014 00:00
Given that Sri Lanka is a country that has an overdose of communication over 25 TV stations and 55 radio channels, I thought of Googling to see what the world gets exposed to. There were some interesting pieces of data.
The British tourist who sported a tattoo was communicated strongly, which did not favour very positively for Sri Lanka but was negated with the T20 cricket win by the islanders, which was then followed by the BBS search on the Ministry of Industry and Commerce and then the launch of the first Ceylon Tea experience by the Sri Lanka Tea Board, which had very positive comments and some already making recommendations for taking the brand as a franchise, which was very interesting in my view.
There were also strong comments on the 7% plus growth estimated by World Bank and Asian Development Bank with Sri Lanka’s growth estimated to be next best to China.
Sri Lanka five years back
Then I Googled Sri Lanka for April 2009 and the information that surfaced were the bombings in the Vanni and the alleged civilian casualties, the human shields that were being used by the LTTE, political instability in the country, the downturn of business in the private sector, the continuous fall of the stock market, the ballooning budget deficit that was at double digit and the fear psychosis that was gripping the city that resulted in low tourist arrivals into the country. Things were pretty negative at that time, which was a contrast to the situation today.
Whilst these can be the positive reports emanating just like any country in the world, be it China, India, Thailand, South Africa, Vietnam or Russia, we need to keep in mind that the stories coming in from places like Vietnam are also very strong.
The country decided to not host the Asian Games given that they want to ensure financial stability for the growth agenda, which is an interesting pick-up, maybe from the Greek and UK experience of the Olympic Games. India is on a rampage on elections, which the whole world is watching given that it is the largest democracy in the world.
Some challenges for Sri Lanka
Given the above information, the key challenges I see for Sri Lanka will be as follows:
1. Doing business – top 50 country
We have to increase the ranking of the country competitive model. Namely the Doing Business, Economic Freedom Index and Travel and Tourism Competitiveness Index as we tend to relax given the overall number growth but we must remember that only from the competitive model that we can get business from other countries’ case.
A best case in point is that Sri Lanka has failed to attract the top four companies to invest in Sri Lanka out of India. It’s strange but that is the truth that we must face.
2. Sustainable hospitality sector
The cost of finance must be at a competitive rate to the hospitality industry so that even with an Average Room Rate (ARR) at 150 dollars from the current 82, so that a typical investment can be financially attractive.
As at now constructing a five-star room ranges around Rs. 25-30 million and unless the ARR is at around $ 250, the return will not be attractive on a time scale of eight to 10 years. The logic being by 2020 we must target 15% of the country’s employment levels to be consumed by this industry. This will enable the country to achieve a zero poverty level. This is the kind of thinking we need to have by 2020 if one Googles Sri Lanka.
3. Exports – 20 billion
There have been many reports of the 10 billion dollar barrier crossed by Sri Lanka but a point to note is that Vietnam and Bangladesh were both at two billion dollars in 1990 together with Sri Lanka. Today Vietnam is at 100 billion plus and Bangladesh closing on 50 billion. We have to become 20 billion by 2020.
The focused industries that may be featured might be the software sector, tea, apparel, cinnamon and gems and jewellery to name a few. Whilst focusing on the SME sector, for a quick-win, large organisations will have to be targeted for support so that we cross the magical mark.
4. Atchchuvely – a reality
By end of December 2014 there has to be something very significant from an economic sense in Jaffna. Atchchuvely Industrial Zone being featured will propel the overall attitude to business in the conflict-driven marginalised business sector of Jaffna for a typical viewer. This must not be confined to traditional industries but also large companies. This will give a positive rub-off to the diaspora that keeps attacking Sri Lanka.
5. PPP – infrastructure
It will do a world of good if we can have some large conglomerates being featured on the news reports on a successful partnership with the Government on infrastructure development. This could be the development of highways, waste management or for that matter sewerage and maybe road development.
6. People ownership
We have to accept that governments around the world have not been successful in driving business. We must ensure that at least the key industries such as LPG gas, SriLankan Airlines, etc., are privatised so that we give the give the correct vibes globally when Sri Lanka is Googled.
7. Tea – new policy
The first privatisation asset of the country was the plantations sector. A colossal 1.5 billion loss-making industry has been made viable by the strong leadership of the private sector. One of the key recommendations of the 10-man committee appointed by the President in 2008 was to increasing of the lease period to cover two cycles of bush life and hence to 66 years. This needs to become a reality soon so that Sri Lanka is featured as a country that is serious on developing the agricultural sector, which is linked to lower earning households of Sri Lanka.
8. SMEs – drive harder
Let’s accept it, the backbone of Sri Lanka’s economy is the Small and Medium Enterprises (SMEs). It is paramount that we have the new SME policy activated by the end of 2011 so that we can unleash the true potential of the country. The good news is that the white paper is ready and if this can be firmed up and linked to developmental agenda of the industrial estates so that Sri Lanka will be seen as a model country in the development drive of the SME sector. This must be further strengthened in the ‘Mahinda Chinthana – Idiri Dekma’ is my view.
9. Hubs – focus
In the recent past, many of us have been involved in forums in sketching out the ‘hub status’ on different sectors. At least by end of next year it’s important that one of them takes shape in form or structure so that we visually demonstrate a key identity for a Sri Lanka. The new thinking is that we must focus on one or two and make it big given the resource crunch.
10. FTA – link to the world
Operationalising the FTA with China by next year must be a high priority task so that it becomes the vehicle that tells the world that Sri Lanka is seen to be bridging the linkages to the rest of the world. This can be a demonstratable action so that the rest such as the EU can follow suit, which will hit the global websites of the world.
Whilst we can be proud that peace has come to Sri Lanka and we have driven ourselves to make the best of it, we must be conscious of the way the world perceives us given that we live in a connected world.
(The thoughts expressed by the author are purely his own views and are not reflective of the office he holds in the public, private or the international civil service.)