• Mind your Business 
• UNP, JVP concur on some issues
• Telecom pressure group invites mobile users
• Mercs wins prestigious award
• Garment manufacturers seek swift state relief
• IMF standby credit facility in complete jeopardy
• Key to employment in the private sector
• Happy ending with a timely retirement plan
• Features
• News

Mind your Business 

Price of war

With air traffic down anyway, this seems to be the case and our own bird is feeling the heat, what with Colombo being a risky destination anyway.

Now the bird's desert managers have called for a review of the staff, fleet and network and more cost-cutting measures are on the cards, we hear.

Gore greens gore

Prominent institutional and overseas investors are garnering funds for a buying spree which is expected to begin towards end November when players are more confident of the outcome, brokers say.

Of course, things might still go horribly wrong if the anticipated green victory doesn't materialise.

Hedging bets

Both corporate giants have been careful to keep their support discreet but now word is filtering out and the rival political camps are aware of who is supporting whom, we hear.

So, at least one blue chip has decided to take 'damage control' measures, making the correct noises and offering token contributions to the "other's" campaign - with the consent of the party whom they really support, of course!

UNP, JVP concur on some issues

"We need an education system that makes youth employable"

Also believe or not - the JVP and the Sinhala Urumaya (SU) are thinking alike in the field of foreign investment. Is foreign investment good or bad? This question was posed to both parties. Their response was quite revealing and a slight departure from previously perceived positions on this issue.

Both sides while stressing that local entrepreneurs should be given pride of place, don't oppose foreign investment in some selected sectors. "We will attract investors who are willing to invest in the latest technology and in finished goods under the direct control of the government," said Sunil Hadunnetti, the JVP's Colombo district organiser.

Neville Karunatillake, a former Central Bank governor and a candidate for the SU, also said his party had no objections to foreign investment in productive areas and where high-tech knowledge is required.

On education, the UNP's Milinda Moragoda, also a candidate at the December 5 polls, agreed with the JVP that any party in power must implement educational reforms that would produce youth who are able to find jobs in the marketplace.

"Whatever party that comes into power should have education reforms that produce youth to suit modern day market needs," says Moragoda.

But that was as far as all three parties had in common, The Sunday Times Business journalist Hiran Senewiratne found when he went on the campaign trail ahead of next month's polls. He spoke to candidates, with a knowledge of economics from the three political parties, to ascertain their views on the economy, business, privatisation and a host of issues that confront the country's business community and the average citizen.

The Sunday Times Business posed a set of 20 questions on the economy and business and asked the three politicians for their general party positions on these issues. Kingsley Wickremaratne, a former minister, presidential advisor and a national list candidate from the ruling People's Alliance (PA), was also approached but he was unable to provide answers before the paper's deadline. Tamil political parties also could not be immediately reached for a response to these questions.

While the UNP took a pragmatic approach to privatization - generally in line with PA thinking - the JVP and the SU are firmly of the view that state entities should remain under the state but made more viable. Both parties agreed that SriLankan Airlines, the Gas Co, the Ceylon Petroleum Corporation, etc. should be owned and run by the state.

The JVP was also of the view that it is the state and not the private sector that should be the engine of growth, a view not shared by the UNP or the PA. To this question, the SU response was that it would give every encouragement to Sinhala Buddhist entrepreneurs.

There was also common ground in the responses by the three parties to the question of whether the two state banks would be privatised. All three said better management, not privatisation, was the solution to raising the viability of these banks. While the SU said foreigners would not be allowed to run these banks, the JVP and the UNP were of the view that the banks should be more customer-driven.

While the December poll is a straight fight between the PA and the UNP, the support of the JVP, the SU, the SLMC and Tamil parties would be required by the two frontliners in the formation of a coalition government, economists say, adding that the views of the smaller parties on the economy were important in this context.

"The JVP proved it by somewhat dictating policy to the PA - for a short period - even though it had just ten seats in parliament. Other parties would have a similar clout in future coalition governments and their stand on the economy must be viewed in this light," one economist noted. 

Telecom pressure group invites mobile users

By Hiran Senewiratne

"Since the growth in mobile phones has picked up tremendously over the past few years, we decided that the association should cover all telecommunication users," said TUA President M.A Navaz Caffoor.

There are an estimated 795,000 fixed-line telephones and approximately another half-a-million mobile handsets in Sri Lanka, according to official statistics.

The TUA, established under the aegis of the International Chamber of Commerce, Sri Lanka, offers many services to its membership including filing complaints or suits against telecom firms over issues like bills or service faults.

It is a consumer protection and advocacy group that lobbies actively, continuously and successfully to improve the lives of subscribers by finding a solution to their problems, he said.

Caffoor said the TUA is hoping to get official status under the Telecommunications Act and has invited telecommunication subscribers to make use of this opportunity by being members of the association.

He said that they represent the interests of members of the association in issues against the authorities or any other organisation to whom it is relevant to make representations.

TUA presently has 250 individual and 49 corporate members including world-renowned scientist, Arthur. C. Clarke. The association has also made its observations on the draft Telecommunication Policy Bill.

Mercs wins prestigious award

"This is the first time a Sri Lankan company has won such an award," noted Thomas Kriwat, director of Mercantile Shipping Co Ltd, after the company won the Lloyds List Award for outstanding performance.

Kriwat and Rohan Codipilly, general manager of Mercantile Marine Management Ltd received the award in London recently on behalf of the group.

The group's Seamen Training Institute at Galle has conducted three-year courses for seamen since 1986 and over the years has seen 800 completing its intensive courses which include stints on ships here and abroad.

Mercantile Shipping has nine cargo ships, two of which exclusively ply between India and the Persian Gulf. The other seven ply between Colombo and Galle, Trincomalee, Point Pedro and KKS. Consumer and industrial goods to Jaffna are transported on Mercantile ships. Kriwat said trainees are provided stints on their ships as well as international liners through contacts the company has worldwide. Salaries for deck hands, engine room workers and catering staff vary from US$ 550 to US$ 1,000 per month.

The training institute has an annual intake of 80 students.

Garment manufacturers seek swift state relief

"I have never faced such a crisis in my 17 years in this industry," noted Nihal Seneviratne, an industrialist and general secretary of the Sri Lanka Chamber of Garment Exporters.

Cassian Fernando, past president of the chamber and a veteran manufacturer, agreed saying this is one of the worst crises faced by the industry, at least in the past 20 years.

Some 200 factories are either working at 50 percent capacity or have shut down production in many of its production lines. "Some factories which have 12 lines are working with just two," said Fernando, as the chamber summoned an urgent meeting with the media last week to highlight the crisis.

The crisis in the industry goes back to many months before the bombings in the US in September, which further aggravated their problems.

Chamber officials said the US recession had slowed down garment orders and then on top of that came the September attacks. "We also had the July attacks at our airport which has added to our headaches." Fernando said.

Many of the US buyers were situated in the World Trade Centre in New York and after the bombings they have been displaced and unable to place orders.

"They have told us to hold on for at least three months to get their act together," Fernando said, explaining the problems in the US in addition to the recession.

The chamber is equally angry that the government has failed to implement proposals in the last budget where small and medium-scale industries were to be allocated funds for re-structuring. 

Modernisation, including installing new machinery, etc, is the key towards Sri Lanka's garment exporters meeting the challenges of the industry when the non-quota regime starts in January 2005.

The 2001 budget provides for the creation of a re-structuring fund for the garments industry where a 75 percent state grant will be given to factories while the industry invests the balance 25 percent. "We fought for this for a long time, as this is our money and we need to gear up for 2005. But sadly this has not been implemented," said Fernando.

Why? "Because some Inland Revenue tax amendments, which are necessary, have not been made. Why? I don't know," he said.

The chamber urged the government to provide an immediate relief package taking care of problems like increasing costs of production, finance and paying wages to workers when there is no work.

"We need relief and fast. We don't have money to pay wages," said chamber president Asitha Gunasekera. "We are struggling and trying to crawl and avoid factory closures," noted M.I. de Silva, chamber vice president.

The chamber, which represents 250 industrialists and close to 100,000 workers, is pleading that some relief be at least provided through the cess that is collected from garment exports.

"There is close to 900 million rupees in this (cess) fund and not a single cent has been spent on the industry. In a crisis like this, the government should make some effort to help us," said Fernando, who added that it is unfortunate that the government is pre-occupied with election work.

"Some of our factories will crash by the time the election is over. We are struggling. There are no orders. Normally by this time I have orders till June of the following year. Now I have orders just for November. Where do we go from here?" he queried.

Chamber members, who employ between 50 to 1,000 workers per factory represent close to 30 percent of the country's garment exports while the balance is handled by the big factories. They also criticised the present allocation of quotas, saying the big factories get more quotas than the smaller ones, though the smaller ones are equally capable of producing the goods.

The chamber also said their costs were much higher as they had no duty-free access and other benefits received by BOI companies but was still one of the most efficient and cost effective industries in Sri Lanka.