What Christmas means to Sri Lanka

Christmas celebrations today are not confined to a particular religion. It is a time of cheer to many homes and on 25 December when I met some of my cousins who had come from overseas, one question I asked was: “Do you see a difference in Sri Lanka?”

The answer was very interesting. Yes. I see Colombo very clean. Galle Road is elegant with the pavements done up and lighting put up by the shops. The highway is brilliant… gives a touch of a developed country. This prompted me to do a piece for this week themed ‘What Christmas means to Sri Lanka’. Merry Christmas people!

Politicians and CEOs

Given that my work calls me to work with the political hierarchy of the country, I get the opportunity to talk to many diverse personalities on topics that are really interesting. Last week at a function a very prominent political personality mentioned something that really got me thinking.

He said he had reflected on the year gone by and where his time had been spent. It was one month in Colombo, almost three months in vehicles travelling and the rest of the time in the electorate through which he was voted to power. I guess these were facts that the general public does not see as we see only the flashy side of a politician in the media.

Especially in a political economy like Sri Lanka, the time spent by a CEO in the engagement of the key public sector can also be an important point to reflect as against the time spent on driving the business.

I remember when I was working for a top British multinational, one of my bosses of Irish origin said: “If you know the correct 100 people in Sri Lanka, anything can be done”. It’s worth noting these two insights as we look at 2012.

 Private sector

If I reflect on the private sector, where my DNA comes from, a point to note is that many in the FMCG business sector told me that business was tough in 2011. When I reflect on the statement made by the Managing Director of Nielsen, a company that tracks consumer purchasing, he said that the growth agenda in 2012 would continue.

I guess it is important find out where the growth took place in 2011 and may be do a gains and loss analysis. The logic being, people are sure moving to consuming/using personal care products like creams and lotions but what happened to the consumption of basic essentials in 2011 is very important to understand.

I also feel that even though the best performing sector of the economy is the hospitality industry, we do not see the sentiments in the stock prices, which is quite sad at a time we celebrate Christmas. May it’s worth noting this point and determining what course corrections are required to correct this anomaly.

Public sector

The bonus declared by the Cabinet may have sure made this Christmas very special for the public sector. At the end of the day, at every meeting that I have attended at budget time, the grouse has been the inefficiency of the public sector.

Having worked in the public sector for almost five years, my take is that when one has got remunerated to deliver a growth of 4-5% GDP and today the economy is at 8%+ GDP, one cannot expect the speed to increase in the public sector unless a remuneration change happens. It’s the basic of motivation theory.

In this light I hail the bonus declared. I would advocate that a performance incentive be introduced to the public sector from a practical angle that can increase the productivity of the public sector in 2012.

FDI: $ 1 b

FDI crossing the one billion dollar plus mark was great news. But now the challenge is how the funnel can be made wider so that FDIs become systemic rather than through special intervention.

However, a point to note is that when a country is at war for almost 30 years, one cannot expect policy changes in two to three years. It cannot happen. The way forward is targeted investment by carefully segmenting global organisations and investors so that once the momentum takes form, it becomes systemic. A point to note is that with growth comes inequality, and this is the reality.

Exports: $ 10 b

Whilst we can be gaga on exports, the reality is that it is organic growth. What Sri Lanka requires is a step change in exports either by new products or by new markets. Given that Fitch Ratings has made an adverse comment on Sri Lanka and many other Asian countries on their vulnerability to the West, I feel Sri Lanka can maintain the growth momentum, provided we develop some focused strategies in exports; namely how the Russian market can be developed with focus post the WTO giving thumbs up to this country after 18 years.

This means most noncompliant taxes will have to be removed by the Russian authorities, which can have many opportunities for Sri Lanka, especially in the tea sector. Maybe the roll out of the global tea communication campaign will have to take centre stage in Sri Lanka’s strategy for 2012.

Tourism: $ 1 b

Whilst Sri Lanka has seen a jumpstart in this industry in the last two weeks, the fact of the matter is that most five star hotels are at occupancy levels of 50-60% given that Sri Lanka is seen as pricy destination.

If we can increase the awareness of the product portfolio, we can make Sri Lanka a value for money destination. May be the Budget break on refurbishment given that the 2013 Commonwealth meeting is to be staged in Sri Lanka; Sri Lanka needs to use this opportunity whilst launching a global campaign on media. Unless we invest US$ 20-30 million, our share of voice will not be heard is the fact though.

Next steps

1.The national Budget must be calendarised on quarter and a stronger evaluation is required as some ministries find the utilisation in 2011 has just above 50 per cent plus. This must be corrected.

2.The overall remuneration strategy must be changed in the public sector with necessary changes in the structure of the organisation so that productivity and outcomes will be the yardstick rather than just implementing activity.

3.Launch of a global campaign on tourism, tea and apparel will have to be done given that the dynamics of the global economy have changed.

4.Private sector engagement in the public sector must increase, especially in the policymaking bodies and think-tanks. If this does not happen we cannot create a market-oriented economy.

(The author is actively involved in the growth agenda of the country in the public, private and international public sector. He has a double degree in marketing, an MBA and is a doctoral candidate in business administration. The thoughts expressed are his personal views and not those of the organisations he serves. He was the first Executive Director of the Government’s Economic Council – NCED – and the eighth Chairman of the Sri Lanka Export Development Board. He has served two Presidents of Sri Lanka.)