Sri Lanka gears up to shape 2025 development landscape
A panel comprising a global strategy consultant, Information technology expert, young and eminent economist, and a versatile local entrepreneur enlightened a group of Sri Lanka’s private sector CEOs on how to harness benefits from the latest market opportunities understanding the threats to business operations and investments and protect the company against future risks.
Finance Minister Mangala Samaraweera and CB Governor Indrajit Coomaraswamy.
The CEOs forum convened by the Postgraduate Institute of Management Alumni Association (PIMA) of Sri Jayawardenapura University in Colombo last week revealed an insight on emerging trends that could support, strengthen or disrupt business activities in the market while providing a full view of the competitive landscape to assess the market position of local businesses.
Central Bank Governor Dr. Indrajit Coomaraswamy told the gathering that Sri Lanka would be able to successfully manage its massive debt repayments while taking measures within a very tight framework in the next few years
But he warned that the country would be facing very serious and severe repercussions if the Government failed to control its budget.
He said Sri Lanka needs US$4 billion per year to meet external liabilities and the Government’s future requirements till 2022.
He emphasised the need of confidence building in the economy in order to convince international capital markets enabling the Government to fund debt repayments.
“When you mismanage your economy, you lose your economic sovereignty. If you lose your sovereignty to the IMF, rating agencies and international capital markets, you end up in a severe crisis,” he added.
Kumudu Gunasekera, Managing Director of STAX and President – American Chamber of Commerce in Sri Lanka noted that in order to remain competitive in today’s world, radical digital reinvention and imagination as well as innovative mindset are needed.
Proper education, correct attitude, value change and wealth creation are essential ingredients for local firms to face competition and emerging digital technology challenges, he said adding that exponential thinking and work productivity are all so essential for the country in gearing up for the 2025 development landscape.
Technology pioneers are creating smarter businesses by leveraging the exponential power of the smart technologies – Internet of Things, Mobile Apps, Cloud Computing, Data Science and Social – and are creating extraordinary value to the modern society.
He said that Uber, Facebook and other innovative start-ups were some of the examples of smarter businesses by leveraging the exponential power of the smart technologies.
He emphasised that Sri Lanka’s younger generation should be moulded with necessary skills inculcating them with proper attitudes to take up challenges in the emerging job market rather than loading them with paper qualifications.
Madu Ratnayake, Chief Information Officer – Virtusa disclosed that the local IT industry global brand position has improved significantly.
Sri Lanka’s competitive advantage in IT/BPM is built around agility, cost, a niche talent base, ethics, cultural adoptability and superior quality of life as a destination for doing business.
“Our focus is to drive on two fronts for the next wave of growth. On the BPM front, we continue to build on finance and accounting as our primary global niche,” he pointed out.
The emergence of a vibrant start-up eco system with several angel funding initiatives and major mentor network was a positive development in the country, he added.
The vision 2022 is to reach $5 billion in revenue, create 200,000 direct jobs and 1,000 start-ups by 2022, he disclosed.
Outlining the country’s economic outlook, Amal Sanderatne, founder and CEO of Frontier Research, reiterated that, from 1978 onwards Sri Lanka was a massive economic success story (third fastest growing economy in Asia) and the backsliding was from the period before 1978. The open economy did work.
The economy did extremely well during the war times due to the open economy, he said adding that while looking at Malaysia and Singapore as success stories, we should also look at how these countries failed, and see how Sri Lanka can learn from those lessons.
Sri Lanka should look at these countries and avoid strategies that failed in those economies, with special attention placed on the economic crash, he said.
Sri Lanka should move away from a negative mindset as it has been able to improve the living standard of the people despite difficult circumstances he added.
Dr. Nayana Dehigama, founder Chairman/ Managing Director of EPIC Lanka Group, said that the Small and Medium scale Enterprises could play a vital role in shaping Sri Lanka’s development landscape by 2025.
The development of an ecosystem conducive for SME’s to carry out their businesses in a sustainable manner is the need of the hour, he said pointing out that the government should protect local entrepreneurs as they generate wealth to the society.
Local enterprises should be given all assistance to establish their brands locally unless otherwise they cannot go globally, he stressed.
“Becoming an entrepreneur demands an array of personal characteristics and traits. You got to withstand against numerous tests perhaps risking everything you can think of before you emerge as an entrepreneur,” he said.
“Entrepreneurship remains unique due to those rare qualities that differentiate an entrepreneur from the rest who will tend to be satisfied with what is easily achievable within their regular comfort zones,” he added.
| Sri Lanka shifts economic trajectory from protectionist trade regime | |
| Sri Lanka has embarked on an ambitious initiative of shifting its economic trajectory from a protectionist domestic market-driven financial system to an outward-growing economic model.This was disclosed by Finance Minister Mangala Samarweera when he delivered the keynote address at the CEOs forum last week in Colombo.It was organised by the PIM Alumni Association, the professionals’ association of the Postgraduate Institute of Management, affiliated with the University of Sri Jayewardenepura under the theme of “Development Landscape of Sri Lanka 2020”.The country’s protectionist trade regime should be gradually liberalised through reform of tariffs, para-tariffs, and non-tariff barriers, as well as closer regional integration, Minister Samarweera said. The government will remove another 1200 para- tariffs in the upcoming budget, he revealed, adding that this aim is to remove around 3000 such tariffs by 2020. 1200 para-tariffs have already been removed under the trade liberalisation initiative of the government, he said pointing out that it will add costs to business and consumers. The Government has already enacted legislation to protect Sri Lankans from unfair trade practices. The government needs to undertake more difficult and challenging reforms in order to achieve economic stability and development under this initiative, the Finance Minister emphasised. Addressing a fully packed CEOs Forum at Kingsbury Hotel in Colombo, Minister Samaraweera noted that the improvement of the competiveness of the economy is vital at present so that the output of employees will be higher. It will be reflected in higher real wages, he said adding that in order to drive competiveness, it is necessary to divert economic resources into activities that optimises the output of workers. The country should move away from sectors where it cannot compete globally and enter into sectors which are favourable for it to compete internationally, he said. The government intends to implement an economic programme that will attract private sector investments and provide more competition while making a safety net for those affected by the competition. Poorest of the poor will also be safeguarded by a welfare net, he said pointing out that the country’s future economic growth depends on exports, investments, FDI and private enterprise. Economic stability is a sine qua non for a private enterprise-led growth model. The Government was able to introduce several key reforms towards ensuring long-term economic stabilisation. In 2017 Sri Lanka achieved a primary budget surplus for the first time in many decades after the Sir John Kotelawala regime, he disclosed. Plans are underway to the amend the country’s Finance Act in order to bestow more power on the Central Bank to carry out its functions as a regulator focusing on its core activities while being relieved of the handling of Treasury bonds, CB Governor Indrajit Coomaraswamy told the gathering of CEO’s. In addition to the fiscal policy reforms, the Central Bank has been successful in bringing down inflation while resorting to inflation targeting, he noted adding that reserves reached a record high of US $ 9.5 billion, and credit growth has been managed to a sustainable level. All these developments have set the stage for a take-off in economic activity and growth, he said adding that macroeconomic conditions have stabilised for investment and economic growth. Sri Lanka is poised to be a major source of investment for companies looking to use Sri Lanka as a base to tap into the fast growing Indian Ocean region, he added. |