Asia Cup 2022 and the “enabling environment”
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The Sri Lankan cricket team being welcomed in Colombo
The Asia Cup 2022 tournament which was scheduled to be held in Sri Lanka from 27 August – 11 September, moved to the United Arab Emirates (UAE). As the venue changed to the UAE out of the total 13 matches, 10 were played in Dubai and the other three in Sharjah.
As the Sri Lankan cricket team won the Asia Cup 2022, for a moment Sri Lankans seem to have forgotten all their economic hardships, supply shortages, hyper-inflation and even hunger in the midst of the country’s economic crisis; they were all overwhelmed by the victory. The joy was doubled as the Sri Lankan Women’s Netball team also won the Asian Netball Championship defeating Singapore.
While sharing my joy with all of you who are celebrating the victories of the Sri Lankan cricket and netball teams and congratulating both the teams, I thought of discussing some economics out of the game, particularly the cricket tournament. A cricket tournament as such will bring together players from other countries as well as the international service providers and tourists; they would all be given proper hotel accommodation and should be treated well.
Crickets in Emirates
Actually, I am not aware of the reasons for changing the venue for the Asia Cup tournament. But I have a valid question: How does a crisis-ridden country treat its visitors or tourists as it used to do, when the country is faced with all sorts of shortages? Shortages of food and drinks, medicines, transport services and other essentials due to import controls! And the Galle Face “Aragalaya” too had added another dimension to the issue, regardless of the fact as to who was right and who was wrong!
In the first place, what is surprising to me is not the rejection of Sri Lanka as the venue for international cricket tournament for whatever the reason; much more than that I am surprised by the choice of the UAE to play cricket!
Let’s elaborate on this point with a simple comparison: Sri Lankans know cricket much better than the Emiratis – the native people of the UAE. We learnt cricket from the British during our colonial times, and thereafter became as good as those who invented it.
Therefore, we in Sri Lanka have a historical track record of cricket to boast about, whereas the Emirates don’t. Even though the British introduced cricket in the Emirates too, it doesn’t seem to have become a popular sport like in South Asian countries.
Emirates doesn’t have a good climatic and weather conditions to play cricket and, neither does its sandy deserts provide suitable grounds for a lush green pitch. Perhaps, for the same reasons, Emirati children didn’t get used to play cricket like the Sri Lankan children who would play it anywhere – mostly in paddy fields or street corners.
Necessary, but not sufficient
In spite of all negatives working against “cricket in the UAE”, the world today can choose UAE as one of the best venues for playing international cricket. And, for that matter Asia Cup 2022 tournament too moved from Sri Lanka to UAE. It’s because the UAE has created the so-called “conducive environment” for playing cricket!
Thus, international cricket tournaments take place in the UAE so that international cricket players as well as cricket fans in the world go to the cities of UAE such as Dubai or Sharjah to play and watch cricket. A “conducive environment” doesn’t mean only the natural conditions and infrastructure; it includes “everything” that creates enabling factors to attract the players and the spectators in the case of cricket or any other sport.
Obviously, international cricket is attracted by the UAE not because the UAE has built “world-class” cricket stadiums in Dubai and Sharjah. It’s a necessary condition, but not a sufficient condition! You can build cricket stadium, but it’s quite possible that it can remain idle without cricket! The point is that it’s a set of conducive factors which would attract cricket – players, spectators, and other related stakeholders and their activities.
The term “enabling environment” is often used to describe a set of such enabling factors which attract and promote investment for economic development. Although there is no shortage of investment funds in the world, not every country is capable of attracting investment through which the country would achieve rapid growth and prosperity.
We may be having a lavish climate, golden beaches, educated labour, smiling people, proud history and, of course a strategic locational advantage which we can talk about for 100s of years; all that is good, but if we haven’t created an “enabling environment”, they will not attract investment and promote growth and prosperity.
Enabling environment
I am going to highlight some vital elements of an enabling environment: Let’s hope that we need investment to flow into all production sectors – agriculture, industry and services. How do we ensure that we have created a “world class” competitive investment destination in the country?
Firstly, the country needs to provide firm regulations and simple procedures competitive enough to make businesses easier than in other countries in the region. It is not about the absence of regulations and procedures, but the quality of such regulations and procedures which attract investment. Lengthy and complex regulations and procedures make investors exhausted about dealing with such “red tape” and in such a case investors look for better locations elsewhere. If investors have to make frequent visits to numerous government offices and waste time with bureaucrats or even politicians to deal with business approvals, tax regimes, licences, labour laws, international trading and many other, then it’s not an enabling environment for doing business. They may find better enabling environments elsewhere.
Secondly, a better enabling environment must ensure the “inputs” to any type of business under important conditions of availability with timing, affordability of quantity at competitive prices and, quality standards. Inputs are numerous as primary inputs such as finance, human resources, land, technology; intermediate inputs such as raw materials, components and utilities, infrastructure and logistics.
Finally, it is necessary to establish cross-border institutions, mechanisms and facilities to promote trade and investment with the rest of the world. In terms of trade, it requires both import trade and export trade for two reasons. From an industry point of view, both imports and exports are essential features of an enabling environment in order to receive “inputs” through import sources and to sell “output” through exports in unlimited international markets. From a macro point of view, a country cannot promote one side without the other, although some people used to believe that exports must be encouraged and imports must be discouraged; they may have not understood the economic preposition that “import controls are implicit taxes on exports”.
Play the game internationally!
Some countries, when they are not that good in providing a better “enabling environment” for investment, would provide various incentives to attract investment, while these incentives can also be used as measures to cover up the weaknesses in the enabling environment. Investors know that when they are deceived by lucrative incentives, the outcome may be dangerous. Therefore, genuine investors don’t merely look for special favours and incentives, but the enabling business environment as well.
By the way, a nation can be champions in economic progress, only if they play economics internationally and according to the international rules of the game. If you continued to play cricket or netball or any other game in the paddy fields or street corners or village schools, your game has no competition from the equals and your victories carry no international value. Every country which has achieved economic success has played the game internationally.
(The writer is a Professor of Economics at the University of Colombo and can be reached at sirimal@econ.cmb.ac.lk
and follow on Twitter @SirimalAshoka).
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