Themes from the CCC Economic Summit

By Antony Motha

Peace dividend
US Ambassador Robert Blake quoted Colin Powell when he said, “Capital is a coward. It flees from conflict and unpredictability.”
Giving the example of Northern Ireland, British Ambassador Dominick Chilcott said that – following the outbreak of peace – unemployment had fallen to 4.2% in 2006, lower than the average for Britain as a whole. He said that peace would provide the best opportunity in Sri Lanka.

Indian Ambassador Alok Prasad echoed these sentiments, describing peace as an essential element to restore business confidence.

Clean & Easy Business Climate
In the Business Climate Rankings, Sri Lanka stands 89th on ‘ease of doing business’. Calling for improving the ease of doing business, Dr Nihal Samarappuli, Executive Director (Research), Board of Investment of Sri Lanka, said that prospective foreign investors perceive the local business climate as ‘quite average’.

Similarly, Malik Fernando, Director of MJF Holdings – the company that turned a bulk tea business into the Dilmah brand - advised firms to “incorporate integrity and ethics into your business model.”

Potent Trade Agreements
Julian Wilson, Ambassador – European Union, indicated that despite being the only country in Asia to which GSP-Plus had been granted, Sri Lanka is under-utilising the opportunity. Although 98% of exports to Europe were eligible for GSP-Plus, Sri Lanka is availing of the facility for only 40%.

The rules of origin issue could possibly be relaxed during the coming year, which should increase the opportunity available.

Alok Prasad made a similar comment when he exhorted manufacturers to tap potential under the FTA. He expressed optimism that the Comprehensive Economic Partnership Agreement (CEPA) would be concluded by the end of this year.

The CEPA would introduce shorter negative lists, recognise standards and simplify customs procedures.

Carving Out Your Niche
When Dayasiri Warnakulasooriya, Chairman/ Managing Director, Midaya Ceramics, spoke of the market for designer ceramics – and the potential for manufacturers to work with ‘studio potters’, he was talking niche marketing. Asoka Hettigoda, Managing Director, Hettigoda Industries, similarly spoke of the opportunity and potential in ayurveda; global trade in herbals has an estimated value of US$ 120 billion.

Malik Fernando advised exporters not to sell cheap and to “always position your product as a premium product.” He emphasized productivity and an entrepreneurial culture when he urged the audience to “break out of the comfort zone that you are in.”

Tertiary Education and ICT
Opportunities in the education and information and communications technology (ICT) sectors were also described as promising. Robert Blake called for permission to be granted for more foreign universities, and partnerships to staff the nascent ICT sector.
Dominick Chilcott also spoke of the need for high-performance ICT and remarked at the rising number of students going overseas for education.

Policy Climate and Funding
To attract a sharp increase in private investment – predominantly FDI – that could bridge the technology gap, a more consistent and predictable policy climate is desirable.

Farmers and SMEs located in rural areas have low access to bank funds, which needed to be addressed.