'Doing business Index upgraded Lanka ranking'
Sometimes I question myself as to why I spend 2 hours on a Sunday
evening to pen an article to the papers, but from the feedback I get
from Politicians, Diplomats, Business Chambers and the private sector,
it has now become my little contribution to society. Technically, one
can call it personal CSR.
December was an interesting month not only because it was Christmas,
but also, it was a time where most of us had the opportunity of
networking among a cross section of society at different forums that we
usually get invited to.
The one topic that got the highest share of voice across all forums
was the ongoing tussle between the executive and the judiciary.
The single minded thread that was common was that people liked
discussing the topic, but they never wanted to be quoted on what they
said. I guess this is the difference between India and Sri Lanka, given
the public outcry we see on the rape and subsequent death of the
23-year-old girl in Delhi.
But, we must not forget that the world is watching us and there could
be ramifications for us in the future, whilst also noting that Sri
Lankans have their own way of reacting too.
If one does a behavior track of Sri Lankans in the last twenty five
years, we see this.
We also see the strong voice of the youths of Sri Lanka on viral
mediums like Face Book.
Whilst the above may be the reality, the World Bank ratings of the
Doing Business Index of 2012, has been very interesting with Sri Lanka
pegging up to number 81 ahead of the BRIC countries and South Asia.
The proposed Shangri La Hotel in Colombo which is one of
the symbols of investor confidence towards Sri Lanka
To be specific, China is at 91, Russia 112, India 132 and Brazil
trailing at 140. Hence, post war, the overall ratings picking on Sri
Lanka on many fronts is commendable, given that almost two thirds of the
economy has been the responsibility of the private sector. Lets me do a
deep dive on these numbers.
On the attributes of 'Starting a Business' Sri Lanka is well ahead of
the rest of the 185 countries with a performance of 33. On the area of
getting credit at number 70, protecting investors at 49 and trading
across borders at a strong rank of 56.
Whilst some could say that this performance was very strong, the fact
of the matter is that these are not hard factors that drive a business
in my view, which is the challenge that we must address in 2013.
The hard aspects that needs serious attention in the Doing Business
in Sri Lanka are: Registering property at a low rank of 143, Getting
Credit 103, Paying Taxes at questionable rank of 169, given that in the
last two years the overall national budget has been focused to the tax
reforms, whilst dealing with construction permits at 112.
The logic of me stating that these are hard attributes, are namely
because each of the above needs structural changes to the working
systems in the public sector. Hence, to move up the rank on the above
would require serious efforts and radical reforms.
For instance, on the attributes of protecting contracts ranked at 133
means that the support of the judiciary will be crucial.
If one goes deeper, the above attributes are the ones that will drive
private sector FDI's and the slow performance on this front can be
attributed to these hard facts that have not been addressed, is the
private sector view, which is the challenge in 2013. Whilst looking at
the Doing Business Index positively, a point that must be noted is that,
many key critical areas of performance are not taken into account in the
They are aspects like governance, country's proximity to large
markets, macroeconomic conditions and transparency of Government
Chilaw town flooded due to the heavy rains across the country in
Hence, if one takes the above factors which are essentially the
nation's competitiveness, we can see that Sri Lanka is challenged crazy
on these aspects.
Based on a presentation, I picked up some information on the way
forward to making Sri Lanka a top 30 country. The actions are very clear
and specific. The challenge is the timely delivery and the consistency
of performance in a political economy like Sri Lanka.
Whilst we can continue to focus Sri Lanka's performance on global
indexes, some hard facts that need correction in 2013 is the strategies
we need to implement of the slowing down of the economy to a 4.8% in
quarter 3 and the looming trade deficit of $9 billion. Even though the
balance of payments look positive given that the remittances from people
working overseas topping a $7 billion, that fact of the matter is that
exports have declined by 8% which is very serious.
Whilst this can be attributed to the down turn of the western
economies, we have to find new ways to drive exports globally given that
Sri Lanka's share of exports is around a 1-2% annually. Sri Lanka must
move away from just highlighting statistics to driving business and
trade is my view.
The author is an award winning marketeer and business personality,
who has a double degree in Marketing, MBA. He is an alumni of Harvard
University(Boston). He serves the United Nations(UNOPS) as the Head of
National Portfolio Development - Sri Lanka & Maldives. The thoughts are
strictly his personal views.