“Don’t leave the poor behind,” urges CCC Chairman
View(s):Ceylon Chamber of Commerce Chairman Suresh Shah, during the inauguration of the Sri Lanka Economic Summit 2014 on Tuesday highlighted some challenges the country will face in the transition from US$ 4,000 to $7,000.
“The private sector will need to re-think. Imagine a consumer with double the per capita income of today, whom I shall call, ‘Consumer7000’. Thanks to rising incomes and cheaper access to modern communications tools such as smart phones and tablets, he or she would be far more connected. They would be more travelled than the consumer of today. Due to greater connectivity and easier access to information, ‘Consumer7000’ would be more aware of what is available in the world and this in turn will make him or her more demanding. Our products and services will need to match up in terms of features, quality and price. They will demand global brands. We – the private sector – will need to compete with imports,” he said, highlighting that Sri Lankan corporates need to consider brands which demand a higher price to offset the increased expenditure and be sufficiently innovative with have the R and D capability, technical skills and also have partnerships to meet the needs of “Consumer 7,000”.
He also said the poor should not be left behind in this process. “In Sri Lanka, approximately 24 per cent earn less than $2 per day (or Rs. 8,000 per month). Sri Lanka must strive for more inclusive growth. This is also in the interest of the private sector. Businesses would benefit more with a broad group of consumers earning a reasonable income rather than with a small group of very high net worth individuals,” he said, adding that the net of development must be cast wide across all districts of Sri Lanka, not just a few. He said that in the last 65 – 70 years, as many as 100 countries made the transition from low to middle income. “But not many made it from middle to high income. It is relatively easy for a low income country to step up. Cheap labour, trade concessions, concessionary funding by international lending agencies, etc. all help in this process. However, to move from middle to high income is more challenging. The cheap labour advantage is lost and with it, the ability to compete with the poorer countries. The technology advantage and the market access enjoyed by the rich countries pose a different set of challenges. The answer to the conundrum is to move up the technology ladder and to find markets that can absorb the new offerings. This means innovation and R and D. And export markets.”