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Tuesday, 7 December 2010

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Thinking big helps Lanka

Sri Lanka is now thinking big with ideas like Financial hub, Tea Hub, Port Hub, Shopping Hub, Industrial Zone in Jaffna at Atchuveli, Trade discussions with Iraq after a lapse of eight years to win back the tea business that we dominated in the 1990s. It’s nice to see Sri Lanka thinking big just like wanting to stage the Commonwealth Games in 2018.


Manju Wanniarachchi in action at the recent Commonwealth Games held in India

Sri Lanka is also bidding for the 2018 Commonwealth Games. It sure gave me a positive vibe given that Sri Lanka was planning for ‘events’ far away as ten years from now when it was not long ago that we used to just about look at a horizon of one month at the most due to the raging battle with the LTTE.

This information also echoed the comment made recently at the CIMA conference when a Deputy Chairman of a blue chip company mentioned that for the first time the company was investing US $ 1 million on training their senior managers of the hotel sector which was a luxury at one time when survival was the name of the game.

Even if this news report of Sri Lanka wanting to host the Commonwealth Games was only an idea, the very thought of Sri Lanka thinking in a broader frame is a good sign as I yet remember a Brazilian boss that I once reported to stating the real test of leadership is the ability to ‘think big’ and then develop a visionary community to make that big idea a reality.

In the recent past we have seen similar ‘think big’ ideas emanating from the private sector with thoughts such as Financial Hub, Tea Hub, Port Hubs, Shopping Hub, Knowledge Hubs in Sri Lanka.

We also heard the announcement of the first Industrial Zone in Jaffna that was being launched with the support of the Indian Government and also after eight years historic trade talks between Iraq and Sri Lanka.

Sri Lanka is on the right track in the think big syndrome. It’s a good disease to contact is my view.

If 2018 Commonwealth Games happens or not in Sri Lanka, let me share a few thoughts that Sri Lanka must be cognizant of when staging gigantic sporting events in a country.

Reasons

While we can chalk up very objective reasons for staging the games in Sri Lanka, it’s important to understand the lessons from the past games that has been staged in other countries. If we take the great Athens Olympics the original budget was at $ 4.8 billion and finally the bill came to a colossal $ 12.5 billion which shaved off two percentage points of the GDP of the EU economy.


Action from the Commonwealth Games held in India

The games did nothing to add value to brand Greece other than being cited as a case study around the world on how not to organize an Olympiad.

On the other hand if we take the Beijing Olympics of 2008, the country ran up a staggering bill of $ 40 billion but post the games when the analysis was done it was not a cost to the Chinese Government but an investment towards building the required infrastructure on the ‘urbanization drive’ that was required for the 750 million Chinese who had come to live in Beijing from rural China.

Hence the US $ 40 billion dollar investment was part of the economic agenda rather than just a cost to stage the Olympics.

This included the sewerage system, transport, entertainment centres and the famous Birds Nest stadium that became part of the Beijing University later.

Sri Lanka needs to do the same in my view if we are serious about staging the 2018 Commonwealth Games. The investment must be part of the bigger agenda of developing Hambantota as a commercial hub of South Asia.

This is where India failed as the initial reports that are emerging state that India wanted to demonstrate to the world that it was above China as a Political and Economic power and pumped in an estimated $6 billion into the Commonwealth Games.

The plan backfired and in fact embarrassed India and took away that shine off.

Sri Lanka must not fall into this same trap and we must be very clear on the broader objective before embarking on this challenging task.

Bigger picture

Let me once again take the successful Chinese Olympic model and explain this point. At the drawing board stage China firstly chalked up the five year Master plan and agreed the key steps required on the urbanization agenda. For instance the transport requirement included in the five year master plan the railway hub that was required to be set up, the Beijing subway, The Tianjin express way that was required to be upgraded so that the 750 million commuters could spruce up the Beijing economy based on efficiency which was the bigger picture of the Economic agenda of China.

Sri Lanka must do the same as I can see the contour of Hambantota taking shape. From the Cricket Stadium in Sooriyawewa to the port that will have its first vessel that will be calling in November this year to the potential cruise ships that might also drop by, we can also see a top international university setting up in the near future.

Given that the Southern Highway has already happened I guess the basic infrastructure is in play for the next stage development agenda that can happen in Hambantota.

World is watching

This will be similar to the Beijing hidden agenda that it had when wanting to stage the 2008 Olympics Games. The question is can Sri Lanka afford this as my best estimate is that it will cost the country a minimum US $ 4 to 6 billion.

If we take the most successful games that has been organized, I would rank the 2000 Sydney games higher up the agenda than the Beijing Olympiad.

The logic being that the organizers clearly segmented the market to pre,during and after.

In fact the marketing program was so successful in the ‘Pre segment’ that it covered the total cost of the games.

The organizers offered free airfare to all the 187,000 officials that came for the games.

It is on this same model that London 2012 is been engineered as per what their CEO Sandie Daarwie said when she came to Sri Lanka in July.

However, as mentioned to her I feel UK has lost its way as if we take the tourist arrivals as at the first half of the year the numbers are below by 2 percent.

I guess we will have to wait and see how the next two years unfold in terms of attracting the ‘Pre Visitor’ segment.

Bidding cost

This is where Delhi failed to make the grade at the Commonwealth Games. The negative reports in the global media not only cast a dark cloud on the games but also on attracting the pre visitor business into the city.

This is what Sri Lanka must take note of.

Meaning that Sri Lanka must be ready by 2016 with all its venues including the athletes village as most of the press comes in well before the event so that event gets the boost it requires to cover the cost as much as possible.

If Sri Lanka is really serious on hosting the games we also must note that the first hurdle is to win the bid.

This also comes at a cost. For instance India had to offer $ 100,000 to each member nation for their vote to beat the offer made by Hamilton of $ 70,000.

Separately, the oversight CEO had to be hosted for almost two years and the cost of the mansion that was required was $ 3,600 is what is been reported for just a month.

This is the cost that we must be ready if we are to host the 2018 Games in Sri Lanka. Separately, we must also be sensitive to the adverse perceptions globally and this needs to be corrected with a Nation branding campaign not to paint a pretty picture but communicate the reality and there by give the country an image that it actually deserves.

This will also cost a fat dollar budget but this is what Sri Lanka requires right now given that the state is working on correcting the ‘Ease of Doing Business’ index where Sri Lanka can become a 65th ranked country in the near future.

IPL success story

Sri Lanka must get a ‘Lalith Modi’ of the world who was the brain child behind the IPL success story. If one really does a ground search it was Modi who sketched the architecture of IPL way back in 1995.

Today’s four billion dollar brand is a reality for the ruthless passion and commitment of this man to my mind.

Sri Lanka must also pick a man to drive the project similar to Modi and what UK did to pick the great Sebastian Coe who saw London through to stage the 2012 Olympiad.

The only difference must be that rather than just letting one man drive the project its best to appoint a high powered team to support the event such as a legal expert, senior accountant and professional marketeer so that it becomes a business entity and works on corporate ethos than a one man show like what happened in the case of IPL.

May be it can fall under the new Company’s Act is my view so that there is responsibility and accountability which will avoid the stench that we see from the Delhi Games that is been unearthed.

The recently staged IIFA awards must be a key learning for Sri Lanka where we saw that the Government cannot run a mega event not due to a lack of talent but due to the Administrative regulations (ARs) and Financial Regulations (FRs) that need to be followed.

Hence it is paramount that we pick up this learning and make the Commonwealth Games a Private-Public partnership in the development agenda is my view. This will also drive in an automatic governance model into the structure.

Mother nature

Let’s accept it. Even with all the planning there are certain variables that cannot be controlled by man. For instance Delhi was lashed with a monsoon this year which had not been seen for the last thirty years. Hence, Sri Lanka must be ready for any eventuality that mother nature will rage the country when having to stage an event of this nature.

But I guess the experience curve is gathering momentum given that we are staging almost ten matches at the World Cup 2011 than includes games against Canada, Australia,Pakistan and Bangladesh.

Whilst it is a very positive sign to see Sri Lanka thinking big and thinking ahead as far as ten years from now, we also pick up the lessons the world has learned when staging mega sporting events so that we truly become the Wonder of Asia is showcased to the world. The good news is that we have many other lessons to pick up before the 2018 Commonwealth Games.

This includes the 2014 winter Olympics in Russia, The Brazilian Olympics in 2016 and the World Cup in 2014 which is a unique double that no country has got the benefit of doing so. Whether we host the 2018 Commonwealth Games or not, the proposition of thinking big and so far ahead will hold Sri Lanka in good stead in the years to come.

(Rohantha Athukorala is a business economist by training and headed the National Council For Economic Development (NCED) under the Presidential Secretariat.)

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