Business leaders call for ‘culture of productivity’

The Ceylon Chamber of Commerce (CCC) Annual General Meeting saw top corporate leaders and intellectuals calling for a culture of productivity with a special focus on education.

“Sri Lanka must develop a culture of productivity,” Mahen Dayananda , Chairman CCC said, addressing an elite gathering at the AGM held last week.

He noted the major drawbacks in the country as high recurrent expenditure, the underperformance of the public investment programme, excessive borrowings from the banking system and the relatively high government debt burden.

“Amongst these negatives, the higher and ever increasing recurrent expenditure warrants special attention,” he stressed.

He said that the oil crisis has been increasingly engaging the attention of world leaders. “The ever increasing price of a barrel of oil is now at around US$ 76 and is fast approaching the highest ever level of US$ 79 per barrel. The situation until year 2012 is described as critical unless production is significantly increased in the short to medium term. Fortunately, for Sri Lanka, foreign remittances continue to grow and this income mitigates to a large extent the impact of oil prices in relation to our economy,” he noted.

Dr. Norbert Walter, Chief Economist, Deutsche Bank Group, in a keynote speech, pointed out that the old capitalism, where the old world set the rules called the shots and played the tunes, was dead and a new orientation is making way.

“The days when US and Europe were in the driving seat is heavily challenged now. Now the shareholder value in companies is highlighted and the shareholders call the shots. They have changed the direction of capitalism,” he said giving a thought provoking speech, adding that this new direction has created ‘deep worry’ to the rich countries.

In an interview later with The Sunday Times FT, he said a large number of emerging markets have truly emerged. “Those who were suppliers of commodities have been more rich, more experienced over time and are now in the driving seat,” he said, adding that this incarnation of the new set up should keep Sri Lanka aware of looking at foreign direct investment (FDI) from the emerging markets than the traditional markets such as US and Europe. He highlighted education and infrastructure as the main areas needing attention in Sri Lanka.

“Education must be tuned for the globalised world. The youth need to learn more languages and skills such as IT,” he noted, stressing that the country’s infrastructure should be supported by strong companies.

On a serious note he pointed out that bilateralism is a disadvantage to the small and unallied nations.

He said that the Sri Lankan economy is in good shape. “It is very resilient and fitting to the Asian dynamism. The macroeconomic business dynamics are time,” he said, adding that the fiscal policy is moving at the right direction.

“If you open up the economy more, the country can grow at higher growth rates,” he said, noting that there should be a ‘positive real rate of interest.’ Speaking about the capital market in the region, he said that Asia has a truly underdeveloped bond market.

“Many international investors are keen to have this asset class. There is a demand. It is important to get into the capital markets as a country,” he said.