High interest keeps investors off listing

Shirajiv Sirimane

The best thing that ever happened in the Sri Lankan political arena was the appointing of a breakaway LTTE cadre, Sivanesathurai Chandrakanthan as the Chief Minister of the Eastern Province.

This has set an example to Prabhakaran and the world that the way forward is from the ballot and not from the bullet. Prabhakaran can still take a leaf from Chandrakanthan and enter mainstream politics and he would also be well accepted.

A youngster who started an IT company in the in the office of his brother Surath and used most of his resources is today is one of the leaders in Sri Lanka and has already ventured out to the region and beyond.

One of the pioneers in introducing private tertiary education in Sri Lanka and Managing Director of the Informatics Group of Companies, Chairman Bank of Ceylon Dr. Gamini Wickramasinghe, speaks to Daily News Rendezvous.

He is also the Chairman of the Securities and Exchange Commission of Sri Lanka and the Chairman of the Insurance Board of Sri Lanka.

Q: What made you select the field of IT and how was Informatics born?

After my education at Ananda College, I selected medicine for my higher education.

However since I was involved in the College first XV rugby team and in a host of sports activities, I found that I had little time to concentrate on studies.

Then I switched to engineering and thereafter left for higher studies to UK, halfway through my A/L, where I obtained my Master’s in System Administration.

This was a right decision as it would have taken me more than five years to pass out if I had entered a local university.

I subsequently joined to head the IT division of one of the largest companies in UK and then shifted to the 12th largest Petroleum Company and was posted in Brussels with my family. My next five year posting was in the US and though the perks were lucrative, the family took a decision they were not comfortable moving from country to country. My mother too endorsed this and in early 1983, I came to Sri Lanka after 14 years.

During this time I observed that the IT industry was in its infancy and decided to start Informatics investing all my savings at my brother’s office. Soon after setting up Informatics, 83 riots broke out and I started to think if I had made the right decision.

However being a patriot, I decided to stay back which proved to be the right decision as we became number one IT company in terms of annual sales.

Local companies during this time were getting the software and hardware from two different vendors and we introduced a system where all solutions were provided under one roof by dialling a single telephone number. AMW and DSI were one of my first customers and we also worked for Nixdorf of UK. We also provided solutions to the CTB under an ADB project and later branched off to Dubai.

The Informatics Institute of Technology (IIT) pioneered the concept of making quality British tertiary education locally available in Sri Lanka. Informatics today consists of seven operating companies and is one of the largest software development houses in the country.

In addition to carrying out large off-shore software development projects, Informatics have been instrumental in bringing foreign investors to Sri Lanka through its joint ventures with leading IT organisations from overseas.

Today we have the monopoly in Maldives in providing their total telecom billing system and are also doing the same with SLT and many overseas countries like, Papua New Guinea, Tonga, Fiji, Mongolia, Dominican Republic and many other countries in the region in many sectors such as banking and telecom.

Q: What is the Indian success story in IT?

I think the main reason for their success is the solid policies which never changed even after successive governments.

They also have over 250,000 IT graduates passing out every year as against the 2,500 from Sri Lanka. They also have the advantage of English since independence (No Sinhala Only Bill) and the government also removed all taxes from the import of computers.

Sri Lanka saw this development taking place but never thought of learning from its big brother. Today China, Vietnam, Philippines and many other countries are following the Indian example successfully.

However Sri Lanka can still do well in the BPO sector which the country is now rightly perusing.

Q: You have also diversified to plantations?

Well I saw the trauma and brutality cattle face with slaughter and decided to save them.

I wanted a place to keep them and bought land in Mahaweli system C. Now these cattle have multiplied and live like ‘kings.’ To sustain this I have introduced a cadju plantation and also now provide milk and curd and have converted it to a farm.

Q: How do you see the link between the farmer and the Bank of Ceylon?

We have identified agriculture as a key area for the development of the country and provide low interest loans.

We have also observed that natural disasters are the main reason for them to default.

Then the farmers have no option other than go through informal channels to raise money since they can’t come to the bank again.

To iron out this we are providing them with an insurance cover through the Agriculture Insurance Board.

We have observed that yields and the post harvest losses are very high and are hiring agricultural graduates to find solutions for these problems.

The local research in this area is zero and the authorities should give serious thought to this.

Q: Why do you see only a handful of entrepreneurs seeking listing in the stock exchange?

One main reason for this is the high interest rates which makes it more viable for them to invest elsewhere. We see some successful IPO’s recently which were oversubscribed by over four times and this is very encouraging.

Q: What is the role Central Bank should play to educate the public on bogus financial institutions?

There are over 100 banking and financial institutions that are not registered with Central Bank and authorities should take action to educate the public about them. Some of these institutions which offer very high interest rates for deposits suddenly close down placing the depositors only in the mercy of God.

The Central Bank should publish a list of unregistered financial institutions mostly based in rural areas on a monthly basis so that the public knows to avoid these ‘bogus’ institutions.

Q: How do you see the local transport system?

I think the rail network is highly underutilised. Due to this we see so many containers on the road.

If a fast passenger rail system can be in place there would be less traffic on the road.

Just imagine the amount of time, and fuel that can be saved when one engine takes over 1500 passengers in the train and the same amount of people travelling the same distance in private vehicles.

One other reason is that we hardly see any new rail tracks or existing single line being converted to a double line and still keep on using the ones built by the Suddas

Q: What should be Sri Lanka’s way forward?

The country has to give preference to agriculture. Sri Lanka can be a duty free hub to sell consumer, electric and electronic items for the region as none of the other countries can do it and investors should be invited to set up shops. The proposed second airport can fit in to this plan and I think it would be a good idea for Mihin Lanka and Indian flights to use this as their hub. To succeed in the dream of the second airport there has to a one hour speed train to Colombo.

I think that Sri Lanka needs to fast track the Hambantota Port since it can do bunkering and also ship repairing earning foreign exchange.

A more organised skilled labour training system has to be in place as there are so many lucrative overseas opportunities for ship repairing, nursing and labour. I must laud the efforts taken by the Gangarama Temple.

It’s also a right decision taken to ban housewives going to MiddleEast for employment as it opens so many social problems. They can work in garment factories, get involved in cottage industries or send one of their family members for a skilled job.

Q: Recall an unforgettable experience overseas?

When I was studying in London I took a coach trip to Europe with another Sri Lankan friend. After crossing the border, we rented a car to go from one country to another.

We had to come back to catch the return coach and we had miscalculated the time and we missed it by good 12 hours.

The next coach was in three days and we were running short of money. Somehow my friend and I took a separate coach and came back.

Q: Where would you like to spend a holiday overseas?

Good part of my life was in London and I like it there. Also I like Europe.