Saturday Sep 21, 2024
Saturday Sep 21, 2024
Monday, 22 December 2014 00:00 - - {{hitsCtrl.values.hits}}
Kishu Gomes addressing the gatherings
To begin with, many thanks to the organisers of this national event for allowing me to be able to address all of you this morning. I must say it is an honour and a privilege to be a part of this very momentous occasion.
We come from different backgrounds, professionals representing different disciplines. From the business leaders here at this forum, we have doctors, we have lawyers, we have business owners and others representing many different fields. We have achieved our own levels of success, we have our own backgrounds, we have different aspirations in life but we all have one thing in common. What is that one thing? That is our mission.
We have one goal, we have one objective. The objective, ladies and gentleman, is to create a better future for ourselves, for our people and for the country. So with that objective in mind when we engage ourselves in different activities day in and day out we need to make sure that we do things right. I guess you are here to basically make that pledge so that we as a country will be able to achieve economic independence under which over 20 million people will have the right quality of life, which I believe is our obligation as people who have achieved a certain level of success. The world is becoming a very competitive place to live and work in.
The competition is multiplying day in, day out, so therefore we as Sri Lankans, if we are to achieve economic growth, need to compete, and to compete we need to have sustainability, we need to have capabilities, we need to have competencies and every other skill and attribute that is required in order to face global challenges. We as a country have very small opportunities to drive business growth. So the pie is small and us trying to share the pie wouldn’t take the country to the extent which I want. So therefore the people in the country have to get together and compete in the external world for which we need certain things in place so that we will be able to do our best.
In terms of what we want as professionals, we need that enabling environment within which we will be able to be focused and to do what we need to do in order to achieve success. And we need a stable economy and if the economy is not stable we wouldn’t be able to achieve our goals. And we need macro environment policies that are consistent with what we need to achieve as professionals.
Terrorism hurdle
If you just look around, you can see what impediments we have had to encounter in order for us to be able to do what we like to do to help the country. Terrorism has been a major issue. Here in Sri Lanka we believe that we have been able to eliminate terrorism and the fruits of that and the benefits of that you and I are enjoying today. But globally we know that terrorism is actually raising its head.
Globally about two trillion dollars is being spent to mitigate the risk of terrorism, of which about 48% is picked up by the US. There are other countries where there is a major chance of it where it is being picked up. So that is to provide security to the people, that’s to create an environment where the lives of seven billion people on this earth move on. So this is a serious issue. So we need as professionals an environment which is free of terrorism. In terms of the level of terrorism in different countries, because I had to speak to this audience, I did a little bit of research and I ended up taking a look at what is called the Global Terrorism Index, where countries are ranked according to the extent to which they are affected by terrorism. Last evening, maybe this morning, you got exposed to a story from Pakistan where 140 people were killed from which about 100 were kids. So that’s the extent to which terrorism can be felt.
So I just looked at the index and it is said that Pakistan was the third most affected country in the world. And I knew that there were issues in Pakistan but I never thought that they were ranked three. India is sixth. Thailand, a place we go for shopping and for various entertainment, was 10th in the world. The UK; we like the UK for some reasons, we do not like the UK for certain other reasons, was 27th. The US, I won’t say anything about the US, was 30th.
Where are we, Sri Lanka? We are at the 36th place. I guess this index is looking for stability and sustainability which I’m sure we can be number one in the world. We can be lowest in the ranking which is the best. We are still marching towards that end. So this goes to show as to what terrorism can do to an economy. How bad terrorism can be for an economy of a particular country.
Why is political stability important, leave politics aside? We need as professionals, strategies for the long-term, strategies which are consistent, strategies which are predictable, strategies which we as professionals are able to come up with, strategies for the medium- and long-term.
Whereas if there is no political stability we cannot think of strategy but just deploying tactics. Tactics in this fiercely competitive world will not take you anywhere. That you and I know having been in the different fields which we have been in. So we want a stable Government so that we can have longer strategies through which we know how to play our game. And unless a Government is stable and a Government is able to think of long-term strategy, you cannot expect a sustainable macroeconomic environment in the country.
And switching direction every now and then will not get you anywhere. So in summary, we need consistency, we need stability, we need a strong economy and we need peace. Contrary to this was what we experienced when the war was going on, when terrorism created issues in our country.
Limited market access
I, being a business leader for quite a long time, know that we as professionals and business leaders did not have access to 100% of the market. I did say during the initial stages of my speech that Sri Lanka was a small market and in order to expand that business we need to think beyond the boundaries of Sri Lanka. But those who played the market did not have access to 100% of the market. The north and east were not involved and before the war actually we had about 15% contribution made to our national volumes in terms of revenue and the volume of business we did.
So we did not have access at all to those markets. Apart from that look at the territories. Trinco was not an open market, Ampara was not an open market, Batti was not an open market, anywhere beyond Anuradhapura was not an open market. We could not forget the revenue of the market opportunities in those areas.
So we lost 15% market potential or more during the time of war and we know in this competitive world what that percentage can do to you. It could be your break even through profits or your break even through loss. So it makes such a difference. And then market access limitations; we had access to certain markets but we had limitations. In terms of being able to make deliveries, in terms of being able to keep in touch with our customers and business partners we had enormous market issues.
The cost to serve customers was a huge issue. We had to have a special insurance and the insurance companies in Sri Lanka came up with insurance packages and those are very high risk packages which they came up with so we had to pick up that cost.
Distribution cost; you load up in Colombo, you travel 5km and have to unload, reload, unload, reload. So if you were travelling 10 km or 15km you would have had to do that several times more, so that costs. Then illegal taxes. There were terrorist groups who wanted me to take those illegal taxes. I do business on a transparent basis, embracing and living by value for ethics and if I can’t do that I’m not in that area, not in that business. But we all know there are business partners in those areas who do not live without picking up those incremental costs. Unethical or otherwise that was the only way they could survive in those areas.
We couldn’t find people to work beyond Anuradhapura so surely we couldn’t achieve what we had to achieve, what we needed to achieve in those areas due to terrorism. The list goes on and on.
Infrastructure development
So what are we experiencing now? How is the environment today? We have been able to reverse all those issues that I spoke of and we have an environment through which we can approach challenges with the right mindset. Infrastructure development we know. We love to travel now. We see highways being here and you know what kind of pleasure it gives you.
So that helps a business organisation, leave aside your personal entertainment. We were able to save a massive amount of money as a result of that. We are only talking about highways but how about less traffic. I’m from Matara and it used to take four and a half hours to five hours those days. It only takes three hours or three plus hours now. So that’s less distribution costs for our businesses.
Accelerated growth post-war is something we have experienced. We’ve had a very resilient economy which we have been boasting about. We have been recording 6% growth during the war time. But today, post-war, we have been hovering around 8%. We get the benefit of that 2% extra economic growth. 2% sounds small but we know how big that 2% is in terms of value and that value is enormous. And 10% would be better and that is what we are striving for. And we as a country are on the radar of global stakeholders for future investment and for future focus and for those who are operating in the country already, of expansion.
So that’s something the country can surely benefit from. I as a professional have travelled around the world and people have asked me about how the country is. Before you give any answer to that question the feeling you get is just fabulous because you know you have a positive story to share with these stakeholders. And when you share that story you feel good for yourself, for your family and for your country so it’s fantastic. And to me that’s more valuable than money.
What are some of the positive changes we have seen post-war? Corporate tax for business organisations, which used to be 35%, has dropped to 28%. And mind you 28% corporate tax is one of the best in the world. You look at the indexes and you discover that. There are countries where you have to pay more than 50% and you know what those countries are. I’ve been paying 28% taxes and then it dropped to 24 two years ago and it is going to drop to 16% effective 1st April. So these are the benefits we are deriving as a result of this stable environment which has been created.
Access to key decision-makers; you know some business leaders, some corporates, professionals complain about not being able to have access to the stakeholders of the country. I have no issues with being able to do that. If you have a valid proposition you are able to secure those opportunities. Relatively low real estate cost and so many other benefits have emerged after the war.
So today every single country is looking at Sri Lanka for future investment. We have top global brands operating in Sri Lanka and they are expanding given the new environment here. We see foreign investment coming in which will get added on to the economic development of the country. We have the location advantage and we have come up with this five-hub concept and that is something we can make work; we are very confident about that and we have access to quality human resources and we have capable local suppliers with whom we can work.
There are certain issues like in any other country that need to be addressed. I know as a business leader who is dealing with all these stakeholders of the country the intention is there to correct some of those issues.
I personally believe we have a better country to work in as professionals and create economic growth for the country so that the 20 plus million here will be able to live a better quality of life which is what we need to deliver as business leaders, as responsible leaders, so it’s up to us to create that empowerment and economic growth.
It’s not up to the politicians. Politicians can only create the enabling environment within which we have an obligation to play an effective role to drive the country’s economic growth. So with that let me wish each and every one of you a better tomorrow.
