Private sector mirrors SL's macro economic developments

Rohantha ATHUKORALA

Given the privilege to deliver a keynote address at the Annual Sales and Marketing conference at one of the largest multinational companies in the country which recorded a turnover of around 65 billion rupees and a contribution of 1.5% GDP to Sri Lanka. The event gave me an amazing insight that motivated me.

I was exposed to diverse macro level economic development initiatives, as the information that was being highlighted at the conference was sales, customer growth, profits, shareholder value, mirrored to the macro-economic highlights of the country that is seen in the media daily.

Top fifty

The quarter two at 2011, registering an impressive 8.2% GDP growth and at year end almost a eight percent, poverty at single digit, unemployment at 5.2% and exports growing by forty percent are numbers that surely demonstrate as a top fifty country of the world, although we are up against some issues internationally that need to be managed carefully.

However, just like any other country, we have our fair share of issues like the ballooning trade deficit that has touched 5 billion dollars as at end July 2011 and exports tapering out at nine percent in July, tea industry in the red but, from qualitative aspects on attributes like infant mortality rate, underweight children and their immunization. Sri Lanka out beats global performance and are in line to the Millennium Development Goals(MDG's) that we should be proud about. This makes Sri Lanka a very healthy country and in good stead for the future from a qualitative perspective.

North

While the government focuses on the resettlement of IDPs and livelihood development in the Jaffna peninsular, this rhetoric and political mantra what was seen last Friday was that the private sector has worked in tandem. The said company has appointed 10 distributors to drive retail penetration in the peninsular since May 2009, while another set has been appointed in Mullaitivu and Kilinochchi which was once ravaged by the war. Sales growth was at double digit level from these districts.

The private sector who works on a profit and customer base developmental model would not have increased their operations if it did not make financial sense. Separately, the strong growth seen in 2010/2011 performance further justifies the thought that the private sector performance mirror the macro economic numbers flashed in the Northern province.

Rural drive

In the recent past we have seen policy makers working on projects like 'Divi Neguma' which is focused on developing 1.5 million economic units across the country to uplift the micro SME sector.

The increased credit to the private sector in the recent past was 33% which further justifies this thought of the resurgence of the Sri Lanka's economic landscape.

From Jan - May 2011 the commercial bank loans to business rose 33.3 percent or 416 billion rupees.

New products

Another strategy that caught my eye at this conference was a range of products that has been developed to cater to the emerging lifestyle of the consumer, backed with the technical expertise. This was similar to the lifestyle development that we have seen with the brand 'Singer' which won the Youthful Brand of the year at the Peoples award 2011. The new products launched by the said company reflect on the macro development trends flashed in the media.

The company had increased its visibility with a sales material and above the line, advertising has made the company secure a 93% share in the country and a top of the mind-brand when it comes to bread, noodles and chicken.

A particular aspect the emphasis the company made towards skill development. Even the conference was themed synergy through team work so that through strategic development of the sales force how business growth can be catapulted.

In conclusion we can infer that from just one sample of the private sector that accounts for 1.5% of the GDP, many parallels can be drawn to the Macro economic numbers that we have seen getting flashed on media. The challenge is to diversify the business agenda and attract more FDIs and improve the doing business indicators which is at a low ebb of 105 as per the global report on competitiveness of nations.

The next step is to identify the immediate challenges in case the euro zone splits and the emerging recession looming in the US, that consume almost 60% of the export we market globally.

But the reality is that Sri Lanka is poised to be a 100 billion dollar economy by 2015.