Economic challenges for post war Sri Lanka
Rohantha ATHUKORALA
We have to make Sri Lanka known to be the nation that beat terrorism
and now, the economic tiger of Asia. Currently many are talking positive
of Sri Lanka but this will last only for two years the most. Thereafter,
another country will become the buzz nation in the world stage. We must
make the best of it now.
Last week at the inaugural session of the first parliament took place
and it was great to see so many young faces in the system.
The enthusiasm of the young members of parliament gave me hope that
Sri Lanka was poised for a 8-10 percent GDP growth in the years to come.
All that was needed was for us support the developmental agenda.
The challenge
Whilst being very optimistic, the reality is that the challenges we
are up against are gigantic in nature and unless the private and public
sectors work in synergy, we will not be able to do justice to the hype
that surrounds the country.
Sri Lanka Parliament |
From the data that has been released by the Central Bank in the month
of January, imports have shot up by 70.1 percent to 1160.9 million
dollars while exports has dipped by 3.9 percent to 472 million dollars
which not very healthy. The trade gap has ballooned to 688.9 million
dollars from 191.5 million dollars the year before. What's worrying is
the declining industrial exports by 16.9 million dollars with textiles
and garments dipping by 27.8 percent which indicates that urgent action
is required.
Election best practices
The need of the hour for Sri Lanka is a robust and sharp development
program on a strategic footing. The good news is that all the policy
makers who took oaths last week to form the new Government has publicly
demonstrated the new competitive culture that is required to succeed.
Hence, all that is required is to ensure that an enabling environment
exists so that together with the support of the private sector this same
behaviour demonstrated at the elections can be extended to driving the
economy. If this becomes a reality, I strongly feel Sri Lanka is not far
away from being the 'Miracle of Asia'. Let me capture the best practices
we witnessed at the elections and why the economy needs to be run just
like the elections so that we as a nation can be the new economic tiger
of Asia.
Best brains
A key feature of the last elections was that competition was so
entrenched that there was no room for a back of the envelop strategy to
be implemented. Hence, many politicians hired professional marketeers
and advertising agencies to conceptualize and implement the campaign.
The manner the campaign rolled out on media and how the masses responded
demonstrated the professionalism which is commendable. Scientific
techniques were also used by some candidates to evaluate the
effectiveness of the communication with concepts like awareness and top
of the mind awareness (TOM) so that voter behaviour can be tracked and
corrective action taken if need be.
What is now required is that similar behaviour to be extended by the
same policy makers in the running of the economy. The best brains must
be picked for strategy development from each sector so that the most
relevant game plan can be orchestrated. The National Council For
Economic Development (NCED) was a very good model that existed in the
country at one time. Policy making and evaluation was done by the top
six private sector and public sector officials under the mandate of the
Presidential Secretariat. A similar model can be used so that a 'home
grown developmental model' will come into play. This is some times
called a 'National Committee on economic development in some countries.
The private sector must also respect that being politically right is
also very important, in today's day and age. As history has proved in
South Asia, a developmental model based only on an economic
developmental agenda has resulted in the government getting kicked out.
It happened in Sri Lanka in 2004 and in India in 2006. Hence we must be
sensitive that in our part of the world, community development is
equally important together to be practiced with a very more urban
approach. Hence if this balance is not maintained in Sri Lanka, we will
lose the opportunity to grow even after winning a record 144 seats in
the new parliament.
Strong game plan
Going back to the best practices in the last elections, we saw that
the candidates that had a sharp strategy came through well at the
elections.
We need to extend same in the economic development agenda too. This
requires discipline and the ability of focusing on a few key priorities
that will generate the best results.
For example, if we take the tourism sector as a case in point, the
focus should be how do we build more hotel rooms in the country, given
that the room current capacity even at a 100 percent occupancy can
attract only a 760,000 visitors into the country.
We also require a competitive financing model for the private sector
to use the credit structure of the banking system. If this is not
conceptualized and launched we will be up against the project being not
be financially viable.
If take the tea industry as a case in point, we need to address the
supply chain issues in the industry like re-planting, fertilizer
applications, lease period of the privatized tea sector to be extended
whilst from a demand side, driving home the unique positioning of Ozone
friendly ethically manufactured tea proposition are some of the
strategies that can be pursued.
This needs to be supported by a multi-barrel dollar marketing budget
if we are serious of the development of this noble industry. Currently
the pivotal promotions agency for tea- the Sri Lanka Tea Board is on
survival mode to be very specific with responsibility.
Passionate delivery
If we analyze the most successful candidates of the general
elections, a key feature that stands out is the passionate delivery of
activity at the ground end. Be it the house to house leaflet operation
or the reminder telephone campaign it was done with a lot of passion. We
need to extend this into the detail dynamics when implementing the
economic development initiatives.
This is especially a tough task given the Financial Regulations (FR's)
and the Administrative Regulations (AR's) that come in to play, but it
has to be worked around. If not, all the beautiful strategy documents
will only collect dust just like what has been before. A key point that
needs to be highlighted is the millions of cabinet appointed committee
reports that keep getting collected over time. This must ideally be
curtailed and more emphasis given for driving passionate implementation
just like the elections.
If I am to take some national projects that I was personally involved
in Sri Lanka where passionate delivery was seen, one of them was the 1st
Hikaduwa Beach Festival that was staged by the Tourism Ministry at the
height of the ground operation against the LTTE in 2008. This event
attracted almost 17,000 people into Hikkaduwa and its surrounding
properties that was a total sellout.
The Sri Lankan Designer Festival in 2009 was another project that
demonstrated passionate delivery in the apparel industry. The model
public-private partnership that was used, came out very successfully
where the industry in chorus told the world buyers please practice
ethical purchasing so that Sri Lanka can practice ethical manufacturing.
We need to use such models in other industries too. This is
especially important as we as a nation are perceived to be having an
island mentality instinct that is quite laid back.
Take the high ground
Going back to the elections once again, some of the candidates who
garnered the highest preferential votes were candidates that took a very
strong stance in their campaign thereby cutting through the clutter.
Meaning, those who aimed very high made it to Parliament. This was
either by the single minded campaign idea or the money spent on the
campaign. Incidentally this behaviour was seen by the newcomers. My idea
is that we need similar thinking in running the Sri Lankan economy, if
we are to achieve a 8-10 percent GDP growth.
If I am to take an example the world's chocolate nation it is not a
nation that either grows cocoa processes cocoa. But it happens to be a
landlocked nation called Switzerland. The only reason they succeeded is
because of the high ground stance they decided to take and then stuck by
this decision over time.
I will be failing in my duty if I do not mention the cricketing
extravaganza of India- IPL. Be that it may on the scandal that has
emerged, the fact of the matter is that it's a powerful idea that has
been creatively crafted to take the high ground of the game that
undoubtedly has become the super bowl of India.
We must draw a few lessons from the innovative steps that India took
to make this a money spinner for the Indian Economy. We need to take a
similar high ground with strong financial commitment in our thirst to
searching oil in Mannar, the making of the second international airport
in Hambantota, driving a novel Tourism project in Kalpitiya, launching
of BPO's in Jaffna or in the making of Sri Lanka a hub port in South
Asia so that Sri Lanka also would create an IPL for the economy.
We must make Sri Lanka known to be the nation that beat terrorism and
now the economic tiger of Asia. A point to note is that we will enjoy
this fanfare from the world only for a two year duration at the most.
After that, another country will become a buzz nation in the world stage
so we have to make the most of it.
Currently National Geographic has ranked Sri Lanka the second most
recommended place to visit and The New York Times has selected us to be
in the top ten growth nations of the world.
We now need to make this recognition into driving foreign investment
into the country diversifying our export portfolio.
Winning at any cost
May be I am too aggressive when I say this but, in today's world the
ethos is winning at any cost. It's not how you played the game. The
election was a classic example to this fact. Coming from a sports
background I commend those candidates who played the game strong right
to end and won.
I know of one candidate who employed all his schoolmates to man the
counting centres. This is the spirit we need to run the Sri Lanka
economy too.
Competition for Sri Lanka is very tight. Kenya in the tea industry,
Bangladesh in the apparel industry, the emerging of Cassia in the
Cinnamon industry that is dominated by Sri Lankan Cinnamon is what Sri
Lanka is up against.
On the tourism front Malaysia, Cambodia, Thailand and India is what
we have to fight against. Competitors spend millions of dollars to woo
consumers into their brands and countries. This is the entrenched
competition that we are up against. We have to win at any cost and there
is no excuse for non delivery. If we do not we cannot bridge the budget
deficit or the ballooning trade gap.
Conclusion
Whilst being upbeat on the new chapter unfolding in Sri Lanka, we as
a nation should be known for the 'home grown economic model' that has
helped achieve a double digit economic growth. We must also drive
towards zero poverty, zero child mortality and zero unemployment levels
which are all achievable goals. However, we must be smarter post the IPL
fiasco and ensure a strong regulator exist so that we do not allow
entrepreneurship drive corruption.
If we do not have a strong regulator from an industrywise basis, we
might move to the same dilemma just like what has happened to IPL. To be
honest I do not blame Laith Modi and his team for the fiasco of IPL but
the policy makers like BCCI for not regulating this industry.
Entrepreneurship drives development and regulating it in mid stream
can kill the industry. We must ensure to prevent this happening in Sri
Lanka whilst we take the election spirit to running the economy. |