Friday Nov 22, 2024
Friday Nov 22, 2024
Tuesday, 26 August 2014 01:00 - - {{hitsCtrl.values.hits}}
Apparently, every one of us is blind to some area in our lives and sometimes it’s better to be visually blind as we know our weakness rather than living a lifetime not knowing our blind spot. I guess this same ethos holds ground when running a country as after all its human beings who govern a country too.
If we Google Sri Lanka’s State media, we realise that as a nation we have become so internally focused with our achievements like expressways, GDP growth, foreign reserves and Shangri La setting up that we have forgotten to understand the global realities which have now reached a crescendo, with human rights panels being appointed in Sri Lanka and internationally amidst allegations by many NGO organisations internally on this theme, which is very sad given that Sri Lanka is a blessed country where family is the core of the society and many of us have very close friends from all races and religions.
Sri Lanka 2014
Let’s accept it, Sri Lanka is on high gear. Export growth crossed 22% in June with the lead business apparel growing at a commanding 45.3% and overall industrial income registering 18.7%, with overall exports poised to cross the 12 billion dollar mark in 2014.
The unemployment level is at a near perfect 5%, poverty at a single digit and per capita income doubling to cross the $ 3,500 mark. To be honest it is a commendable performance when I see in the last two weeks the second quarter results of the private sector, which is showing amazing financial performance.
Dialog has crossed 16.7 billion in revenue bolstered by mobile and pay TV segments, Commercial Bank revenue is up 25% with net income registering 15.5 billion revenue in the financial sector whilst a consumer business like Nestle has grown by 7.6% in revenue to arrive at a net profit of almost a billion, to just name a few. Foreign reserves at almost $ 9 billion are numbers that Sri Lanka has never heard of, which I feel we must be sensitive to as a nation.
However, we must keep in mind that on the external performance almost 90% of all these items are bought by a global consumer who is either in the United States or the EU. Hence, unless we identify the challenges we are up against in each of these countries and then address them, we are heading towards a serious issue in the near future as we see the reality unfolding on a superpower country like Russia on Ukraine.
Global reality
To be specific we must identify the consumer who purchases Sri Lankan merchandise and understand their perceptions, attitudes and the impact on influences like the aggressive Sri Lankan diaspora in each of the key countries like US, UK, France, Germany which make our top five markets for our export business and to a certain context the tourism industry earnings.
In this respect a point that needs to be noted is that in 1983, there were more than a million people who left the country with hatred and dismay, never to return. The challenge is even greater, given that their siblings have now become the voice of the diaspora who have actually only heard of the issues in Sri Lanka rather than actually experiencing them. The reality of this new generation diaspora is that they are more educated, more connected to the powers that be in that respective country, which is why Sri Lanka is experiencing apprehension by many countries globally.
The reason why we need to address this brewing issue is because Sri Lanka is strategising to take the high ground on its key export products like the apparel industry driving a global strategy on the theme of ‘First Ethically Sourced Destination Globally’ and the tea sector driving on the proposition of ‘Ozone Friendly Teas’ whilst the Food and Beverage sector is talking about a Rainforest Alliance, which are strong positions that require support from stakeholders domestically and globally if we are to really make an impact.
This is the reality that we must be sensitive towards where we have to engage stakeholder groups like the diaspora and make them feel that their concerns are addressed for their kith and kin who live in the north and east of Sri Lanka. This includes decisions like the National Anthem being sung in Sinhala and in Tamil as well as being able to engage either in the Sinhala or Tamil language in any Government institution. If Sri Lanka does not have these building blocks of reconciliation in place, we will continuously have protests and agitation, which will result in the ‘Wonder of Asia’ dream being unrealised.
Budget 2014
It will be interesting to see the 2015 Budget. In my view the focus will be on the small, medium and micro enterprise sectors that do business outside Colombo, who do not get excited about data like GDP growth, single digit inflation, expressways, tallest building in the world will be the Lotus Tower or the beauty of the Independence Arcade.
The Budget will have to address aspects like access to finance, business development services for the SME sector, technology transfer and setting up of industrial zones like Atchchuvely given that presidential elections are coming to play and there is no option but to launch a very mass market and people friendly Budget given that over the last five years the budget has been focused to the top end of Sri Lanka.
Positioning SL
A recent research study has revealed that global awareness of Sri Lanka is below 4%. Some are not even aware of the LTTE terror organisation that the country has been up against for the last 30 years. Some do not even know that Sri Lanka has been a budget destination on the tourism front in the last 20 years or more.
"Sri Lanka’s export community is giving leadership to Sri Lanka with an outstanding performance in June and 22% growth over last year, but at the end of the day, we have to understand that the consumer who ultimately buys our product lives overseas and we must be sensitive to the influences in that market"
This can be in one way a blessing in disguise as we as a nation can start a global positioning campaign from a clean sheet. The current tourism campaign globally will not add value to brand Sri Lanka given that the TV filment is totally away from the Sri Lankan footprint or the value proposition.
It’s very sad given that the best global advertising agencies operate in Sri Lanka but we have such unfocused communication being rolled out. I guess the tea campaign can also add value to the global proposition of Sri Lanka but it has been on the drawing boards for almost three-and-a-half years and even as we speak a five billion rupee advertising muscle is waiting to be unleashed on the focused 10 markets globally.
Cannot be blind
Another area that needs our focus is the overall fiscal management of the country. Even though the debt to GDP has come from the last year’s percentage of 78.3% to 74.3%, the reality is that the IMF has commended the overall growth of the country but warned in diplomatic language that in the medium term there can be serious ramifications given that export earnings are not keeping a similar pace and overall public debt has touched Rs. 7.18 trillion or a staggering $ 55.2 billion, of which 44% happens to be foreign debt. Moody’s has reported that the current foreign debt is 59% of the GDP, which is the highest in the Asia Pacific region and needs careful thought.
Next steps
I guess these are the realities that will affect Sri Lanka’s competitiveness in the near future. The challenge is how the country can increase its private-public and community dialogue so that issues of the country can be discussed and a solution of a collective nature can be found.
(The author serves the country on many private and public sector boards of management and is a respected thought leader and saught after marketing professional in the country. The thoughts expressed are not the views of the offices he holds in Sri Lanka or in the global organisations he serves.)
