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LTTE
boycott and foreign aid The aid pledges
expected in Tokyo were seen as critical for the economy. For not
only would the money provide a much-needed kick-start to a spluttering
economy, barely coming out of recession, but they would also be
seen as a confidence signal by foreign investors. Without foreign
direct investment this country would not be able to accelerate economic
growth to the levels required to make an immediate and visible impact
on the lives of ordinary people, and especially the poor. And without
making that immediate and visible impact the government risks losing
popularity and the support required to push through the peace process. Already Norwegian
special envoy Erik Solheim has warned that Sri Lanka cannot expect
significant amounts of foreign aid and investment if the LTTE stays
away from the peace process. Jeffrey Sachs, the internationally
known academic advising the government on economic reforms, has
also pointed out that foreign investors are waiting for a final
peace deal to be signed before committing large sums of money in
direct investments. The LTTE's
boycott of peace talks undoubtedly has serious implications for
the effort to revive the economy and speed up economic growth, as
well as rebuild the devastated north and east. The fact that
the LTTE supremo Velupillai Prabhakaran last week indicated to the
Japanese peace envoy to Sri Lanka, Yasushi Akashi, that the rebels
have no intention of going back to war - at least at this stage
- is indeed reassuring. The government
should take a firm stand with the LTTE and point out their own lapses
and transgressions of the ceasefire agreement - lapses and transgressions
which now have been accepted and publicly acknowledged by such influential
players as the outgoing American ambassador Ashley Wills and the
Sri Lanka Monitoring Mission, albeit belatedly. The most obvious
and glaring transgression is the killing of informants and political
rivals in the past year in violation of the truce that was initiated
in February 2002. The Scandinavian monitoring mission has said the
killings have undermined the ceasefire. From the time
this government started the peace process it has been accused of
bending over-backwards to please the LTTE, even to the extent of
endangering national security and sovereignty. If, as the government
spokesman Industries Minister Prof. G.L. Peiris says, what needs
to be sorted out are some "practical problems" before
the Tigers resume peace talks, that should not be too difficult.
The government should leave no room for the LTTE to accuse it of
not doing enough to care for the Tamil people, especially the large
number of long-suffering displaced people. It can easily cut through the red tape that seems to be holding up the rehabilitation effort, if it has the will. After all, this was the position on which the government embarked on the peace process in the first place - to sort out the immediate day-to-day issues affecting the Tamil people and thereby build confidence. That this effort has lost momentum is inexplicable. What is at stake is the future of the country, billions of dollars in aid and investment and the whole reconstruction effort. Build
large reservoir of Sri Lankan talent Sumi Moonasinghe,
chairperson of the Bank of Ceylon, in a recent speech to the American
Chamber of Commerce of Sri Lanka also urged the business community
to lobby the government to recruit the best Sri Lankan talent available
abroad and pay them global market wages. Here are excerpts
of her presentation which was based on the knowledge economy: The new wave
of development has brought with it a genuinely new way of life based
on diversified, renewable energy sources, on methods of production
that make most factory assembly lines obsolete, on a novel institution
called the electronic cottage and on radically changed schools and
corporations. This newly
emerged civilisation has written a new code of behaviour for us
and carries us beyond the concentration of energy, money and power.
It has its own principles for the politics of the future. This confrontation
between the vested interests of the second wave and the people of
the third wave already runs like an electric current through the
political life of every nation. Cheap labour Third wave
nations sell information, innovation, management, culture, advanced
technology software, education, training, medical care and financial
services and military protection as we just saw in the recent war
in Iraq. Although a staggering $ 85 billion was spent the war which
was won in three weeks, allowing the Iraqi natural resource to enter
the world market within a short period of time, therefore recouping
this vast investment as opposed to conventional warfare which may
have taken years with many lives lost and unable to use the resources
of Iraq for many years due to the vast destruction. Third wave
countries become less dependent on the first and second wave partners
except for markets. More and more they do business with each other.
Eventually, their highly capitalised, knowledge based technology
will take over many tasks done by the cheap labour countries and
actually do them faster, better and cheaper. Meeting
challenges We have opened
the most vital sectors such as all imported essential food items,
oil, telecommunications, financial services and now we are about
to open up electricity. These companies
are driven by profits and therefore we can't expect much from them
individually. However, as a body I am sure you all can do something
to help our future generation. When the World
Bank and the IMF give us any assistance it is tied up to us meeting
certain goals specified by them. Liberalise, open the economy, level
playing field with no protectionism, downsize and retrench staff,
etc. We as CEOs' of companies are fully aware that this is what
we have to do because we have studied overseas, travelled or learnt
the best practices. But what about our bureaucracy? Have they been
trained in negotiating skills to get the best deal for our country?
We hear about bad privatisations. What is the
reason for this? Shouldn't we as a body lobby with these institutions
that we must have access to this knowledge economy in return for
the market we are offering them? How many of our clever students
can afford to study at Oxbridge or the Ivy league colleges or for
that matter how many of our public sector officials have been sent
out to learn and experience this third wave we are talking about?
Do we have properly trained regulators to monitor these privatised
entities? The US, which is the most advanced nation, could not regulate
Enron. When Asian economies crashed they attributed it to corruption
but when long term capital funds crashed they bailed them out without
a murmur. The river cannot
flow back. We are in a global village and we cannot control this
momentum of globalisation. But who is
studying the shadows of globalisation and taking action to minimise
them? Our institutions
have invested very large sums of money in the last five years to
computerise and still we are unable to get them working to our satisfaction
whilst the foreign institutions in the same business are racing
ahead because of the knowledge they brought in with them and the
human resources needed. Human resource
development Performance
related reward systems must be in place and we must give all the
incentives for our young executives who have experience in the knowledge
economy to return, to help our nation to embrace this third wave
without much conflict. We need to invest a very large sum of money
to access this knowledge if we are to survive. But we are
not allowed to spend because of the outdated rules and regulations
we are burdened with. If we calculate the total sum of money spent
as management fees and consultancy fees I am sure that if that money
is invested in exposing our clever youth to access this knowledge
we can at least expect a return on that investment within the next
five years. As a first
step let us lobby to get 500 best performers in the country, based
on the A-Level results, into the first class universities in the
west, with specific courses identified so that on their return they
know exactly what they will be called upon to do and in which government
institution they would be working and for what salary. Another 500
best performing students passing out of the universities or the
recognised professional institutions should be helped in work experience
and post-graduate studies. All this should
be funded by the donors in return for opening up the markets to
the rest of the world. We will then be laying the foundation for
building our future leaders. Pay market
salaries I am sure if
we recruit these skilled people as middle managers in the public
sector after installing administrative service reforms, and empower
them fully with accountability they could be change agents. We hear
of many Sri Lankan achievers all over the world but have we stopped
to think why they can't achieve their full potential here? We have to
invest in human capital if we are to survive. We do not have the
skills especially in the public sector to obtain the best value
for our assets - when they are being sold - as we don't possess
the negotiating skills. The public
sector can be made to compete with the private sector if the administrative
reforms remove the control and the procedural blocks which have
been installed 50 years ago, which are now completely outdated.
A tender for
the purchase of PC's in the public sector takes one year for evaluation
and award which means 18 months for receipt of goods by which time
these machines are obsolete. Why can't we
do the whole thing very transparently and conveniently on the web?
The tenderers can answer all the queries on the web, and they can
also point out any irregularities if it is published on the web. At present
these are done in a secretive manner and there are so many allegations
of corruption after a tender award, even if the best product has
been ordered, due to this non-transparent method. We must, as
a first step, launch the widest possible public debate over the
need for a new administrative and political system attuned to the
needs of the third wave. We need conferences, TV programmes, contests and simulation exercises to generate the broadest array of imaginative proposals for restructuring our educational system to unleash an outpouring of fresh ideas. The responsibility for change therefore lies with us.
Asian holidays There is little
doubt that Sri Lanka has too many holidays. The business community
has for many years asked governments - without success however -
to rationalise holidays because it affects productivity. This year
the holiday season gets longer with two holiday weeks in April and
May. This week for instance has only two working days and given
the Sri Lankan tradition, many workers are going to skip these days
and take the whole week off! The Ceylon National Chamber of Industries
(CNCI) is the latest chamber to raise concerns over holidays and
in this special report to The Sunday Times it shows how holidays
could be rationalised in a sensible way. Sri Lanka is
becoming very popular as a nation which struggles at decision making
in most matters and famous for postponing decisions on matters of
prime importance even at national level for a multitude of invalid
reasons. As highlighted by a funding agency recently, Thailand takes
only six months to decide on a highway construction whereas Sri
Lanka would take 24 to 36 months to make such a decision. Our country
has suffered for nearly two decades due to prolonged ethnic strife
mainly due to improper and hasty decisions or indecisiveness of
people of authority. The power generation
crisis in the country is a classic example of incapability of the
decision makers to find a lasting solution to the ever worsening
power shortages and failures which seriously affect trade and industry
in the country. Though the dark days of continuous and regular power
cuts that had adverse effects on the country's economy are over,
we are still doing patchwork to the problem without focusing our
attention on a definite solution. It is a fact that whether it is
hydro, thermal or nuclear - any power generation has an impact on
the environment. While nuclear energy is unimaginable for a tiny
developing nation like Sri Lanka, we are in a position to develop
our hydro and thermal energy though at high cost. Proposed coal
power plants keeps shifting locations from Mawella to Norochcholai
to Trincomalee due to either political, social or environmental
reasons. Tropical conditions in the country are ideal for solar
power generation but it would have its own limitations. The latest
thinking by the policy makers is to generate power along with oil
refineries. However, the fact remains that if Sri Lanka is to progress
industrially and economically, the government must institute urgent
measures to overcome the power crisis in the country by providing
power at a competitive rate. The business community in the country
and the general public now need action instead of words. In addition
to the power crisis another major reason for the low productivity
in the country is the excessive holidays enjoyed by the working
community. Sri Lanka tops the list where public holidays are concerned
in our region or perhaps in the whole world. One could imagine the
opposition that may arise from trade unions and other pressure groups
if the public holidays are to be curtailed. However, it is imperative
that the government should restructure the holiday calendar for
the year without being complacent about the sentimental factors.
After all it is the duty of the government to apprise the people
how the benefits of higher productivity could have direct and indirect
benefits to all. As a first step the government could restructure
the holiday schedule of the private sector enabling them to increase
productivity and thereby support the economy. Our industrial sector
could certainly show remarkable progress and keep pace with the
global industrial giants if these measures are taken. Necessary amendments
should brought in to the Shop and Office Act which governs the private
sector with regard to the holiday calendar to be in line with some
of the developing countries in Asia such as China, Singapore and
Malaysia where they have only one stretch of holidays during the
Chinese New Year. In Thailand the main stretch of public holidays
is the "Sonkran". In China their golden week holiday commences
on May 1 but this year the holidays have been curtailed to catch
up for the production lost due to the SARS epidemic, an example
that should be followed by us. In almost all European countries,
the stretch of holidays is taken during the summer and no one is
inconvenienced by the annual shutdown. Our chamber,
the CNCI, wishes to make the following proposals in restructuring
the holiday calendar for the private sector: * Introduce
two 7-day stretches of holidays during the Sinhala/Tamil New Year
and during Christmas. All manufacturing units will shut down simultaneously,
thus using up the annual entitlement of 14 days as per the Shop
and Office Act. 1) Advantages
- All employees will be on leave together with no loss or retardation
in production. 2) Local/export
production planning could be done in advance taking into consideration
the proposed one time shut downs. Delivery schedules would remain
unchanged and no danger to loss of business. 3) No production
losses or idle labour resulting from skeleton staff situations arising
from indefinite holiday schedules. 4) Annual maintenance
of the manufacturing units could be scheduled during the proposed
stretches of holidays which will help minimise the loss of production
due to machinery breakdowns. 5) Children,
parents and family members get the opportunity to enjoy the two
national festivals in each other's company. 6) Annual family
picnics/holiday excursions could be planned ahead. This will have
direct and indirect benefits on local tourism and business. (It
is said that over a million holiday makers use Air Travel in China
during the long vacation; What a wonderful business opportunity!) In the Sri
Lankan context, in April this year if the private manufacturing
units had been closed for business officially - taking advantage
of the two annual entitlement holidays - April 14 to 20- would have
been a holiday week. In December this year if we use the six days
of annual entitlement of holidays, all private sector manufacturing
establishment employees could avail themselves of a 10-day stretch
of holidays from December 22 to 31. Going by these
examples, private sector employees would still be left with five
days unutilised leave which they could use for other personal needs. Initially we
do not discuss or propose amending the luxurious holiday pattern
of the public sector but why not we start with the private sector?
It would certainly help to improve the already lagging productivity
in the private sector in Sri Lanka and move towards the country's
goals in "Regaining Sri Lanka". We are confident that
these would definitely help to reduce our industrial absenteeism
which currently averages between 7% and 12%. It would contribute largely towards the productivity improvement and enhanced profitability. This will have a significant impact on the growth of GDP thus benefiting the entire nation. |
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