Gampaha beats Thailand at 0.752

Last week the World Bank announced the 2013 Doing Business Index whereby Sri Lanka has pegged up to be ranked 81st as against last year’s rank of 89th in the world, which surprised many of us, given that the theme of the private sector was the radical reforms that were required to make Sri Lanka competitive.

Whilst I stand by the ethos of the reforms required in Sri Lanka on many fronts for us to be competitive as a nation as against the changes taking place globally, what was interesting to note is that Sri Lanka was ranked in the top economies in the world to have implemented changes to policy in driving up the Ease of Doing Business. I feel it’s a win for the private and public sectors and people of Sri Lanka given that over two-thirds of the country’s GDP is generated from the SME business.

I guess the next challenge is to make the deep dive reforms that will sure have a public outcry, but it is the need of the hour. The top two areas in my view are the export industry from a policy perspective and the education sector.

If I am to take a case in point, India has done a similar exercise in its retail trade industry and insurance business even with all the protests from the general public. This explains that even in a political economy, reforms can be done provided there is a strong will to move the country away from a middle income trap.

NHDR

Whilst the country has been registering a six per cent plus growth agenda in the last five years and an eight per cent plus growth in the last two years, some can question what difference this has made to a Sri Lankan living in the grass root level of a country.

In my view the National Human Development Report (NHDR) that was released by the UNDP early this month captures the essence of this.

The initial Human Development Report was launched way back in 1990, where aspects like to live in good health, to be educated and to enjoy a decent standard on living, was researched and country performance ranked by way of a Human Development Value.

The 2011 edition also highlights the people’s freedom to participate in the development process of the country, which makes the recent edition very useful to a country like Sri Lanka that was plagued by the conflict for over 30 years and many people in the north east in particular not having access to be part of the economic development agenda.

SL rank – 28% growth?

The 2011 edition of the UNDP report points to the fact that Sri Lanka has shot up by 28% growth in the Human Development Value (HDI Value) with a 0.691 performance outperforming all SAARC countries and specific countries in the Asian region like Thailand, Philippines, Indonesia and even Vietnam with a value of 0.593.

However, a point to note is that Sri Lanka is behind nations like Malaysia and Singapore, which explains the next phase of development required.

Inequality high?

With projects like Kkrish, Shangri-la and Hyatt coming to play, the perception is that Sri Lanka’s haves and have-nots are showing up, which is essentially on the inequality aspect. However, if one digs into the data on the Inequality-adjusted Human Development Index (IHDI), Sri Lanka still registers a 0.602 performance with the loss on inequality being just 13.1% as per the UNDP report.

If one does a deep dive into this value, we see that the country’s inequality stems from a person’s income and not from the access to education or health, which is why programs like Divi Neguma and the setting up of industrial zones are very important.

Incidentally the inequality gap in a typical middle income country like ours ranges between 25-35%, which means that Sri Lanka’s hard-won peace dividends are reaping the benefits from the ground reality perspective. I guess the challenge is how this performance can be maintained.

Sri Lanka beats Vietnam

In many circles a country that Sri Lanka must emulate in a post-war context is named as Vietnam. This is mainly from a private sector perspective business model. But the fact of the matter is that the HDI value Vietnam scores 0.593 whilst Sri Lanka is well ahead of the game with a 0.691 performance. Indonesia trails at 0.617 and Philippines registers only a 0.644 value.

Gampaha beats Thailand

If one does a detail evaluation of Sri Lanka’s performance, Gampaha comes in at number one with a 0.751 performance, which even beats semi industrial countries like Thailand and is just behind Malaysia that is recording a number of 0.682, which is very interesting.

Even if one takes into account the adjusted Human Development Index (IHDI), the District of Gampaha records a 13.1% loss due to inequality as per the UNDP report, which gives us the strategic development that has been done in Gampaha.

Gampaha – deep dive

If one does a deep dive on Gampaha, as per the Department of Census and Statistics on the poverty front, Gampaha is ranked number three at 3.90%, which is national average eight per cent plus, whilst on the education front Gampaha comes out the best on school children who have not had a schooling at just 1.8% whilst those who have been educated up to A/Level is above the national average.

But strangely as against other urban cities on the aspects of schooling up to Grade 5 and also in the passed A/Level segment, the numbers are below the national performance. May be an evaluation must be done why those who passed A/Ls are below the urban number of 18.7%. It could be that many school children are resorting to be educated in Colombo schools due to proximity.

With regard to the ownership of motor cycles, three wheelers and buses, the Gampaha District have a higher percentage as against the rest of the country as well as against other urban markets, which may be reflective of the lifestyle of the households and occupation. But the families that have no vehicles is significantly lower at 33.5% which is indicative of the district registering the second position in the Average Mean income at Rs. 48,870.

Maybe marketers who are targeting the Gampaha District will have to take these insights into account when developing brand marketing campaigns. For instance, a hoarding that is being designed to the Gampaha District must show motorcycles than a motor car as this number is way above the national average. On the other hand it also indicates the opportunity that exists for motor car marketers.

The penetration of washing machines in the Gampaha District is the highest at 22.3%, which is interesting and I guess marketers from companies like Singer must examine what key strategies that helped the company get there. Maybe it is reflective of the lifestyle they lead, which makes them want such products and it not been a luxury. However, it’s strange that the ownership of refrigerators, cookers and electric fans is below the national average in urban markets. I would argue that the urban number might be skewed due to the Colombo District and maybe it’s not reflective of a normal average.

Given the penetration of sewing machines in the Gampaha District is at 51% of the households, products like handlooms can be targeted for value-added export marketing so that within the next three to five years Gampaha District can become ranked number one on mean income as well as on overall poverty. I guess very soon we will see enterprises from Gampaha being showcased at events like the Sri Lanka Design Festival.

Some of the issues in the Gampaha District that need attention are households that are suffering from chronic illness and disabilities are at a high 17.5% as against the national average of 14.4%, which means special programs aimed at correcting this issue must be targeted.

Next steps

1. A similar analysis must be done on all 24 districts so that ground realities can be understood.

2. A master plan must be architectured so that a three to five year developmental program can be done just like what we see in Gampaha.

3. The overall developmental agenda must be done with a clear mission like what we see in Gampaha.

4. This bottom-up game plan must be linked to the national Budget.

5. GDP growth must be tracked at the district level if possible so that national level planning can be made targeted.

(The author is actively involved in the growth agenda of the country in the Public, Private and International Public Sector. He is an Alumni of Harvard University, Boston.)