Durable peace before donors commit funds
A senior World Bank official said last week that enough funds were available from foreign donors to help rebuild the island's economy but the money would be committed only when there is durable peace.

"The funds are not the problem," World Bank country director Mariana Todorova said. "The question is whether there is peace and good (development) programmes. It's not the money first."

International lending agencies and bilateral donors were ready to provide aid to rebuild and modernise the economy but first wanted to ensure there would be no more fighting and that the required economic reforms were being implemented, she told reporters.

"Whatever is built, it will be done when there is peace," Todorova said.
The present transitional phase, where both sides are preparing for peace talks, could go on for a long time, she added. "It's a good thing there's no war," she said. "The people benefit - no one is getting killed. Things are really moving in the right direction."

The forthcoming development forum in early June would focus on fine-tuning two critical programmes - the Relief, Rehabilitation, and Reconciliation programme, known as the "Triple R", and the Poverty Reduction Strategy Paper (PRSP).
The government needs the PRSP to get more aid under the Poverty Reduction Growth Facility from the International Monetary Fund, Todorova said.

"A major restructuring of the economy has to take place," she also said. "The government is committed to the private sector, to improving labour mobility, the land markets. This would ensure a fast recovery when there is peace." Todorova said she was encouraged by her recent visit to the Wanni to check on World Bank funded projects on both sides.

"There is real change," she said. "I saw irrigation tanks being repaired, minefields being cleared, people moving about. She said she was particularly struck by her visit to Kilinochchi where people were trying to rebuild their lives.

"One and a half years ago it was a ghost town," she added. World Bank projects in the region were helping people to "jump-start their lives by working on projects, earn some income, rebuild their lives."

The bank was considering extending a $100 million soft loan for renewable energy projects in the island. Among the projects being considered were windmills in Jaffna where "the winds are very good," Todorova said.

Private sector companies were very enthusiastic about renewable energy, she said.
Funds under a $34 million pilot project ending this year had already been fully disbursed, she added.

Crisis facing Lanka's footwear industry in crisis
By Ranjith Hettiarachchy
The footwear industry, which was a foreign exchange earner and prospering local industry catering to the demand of local customers, has gradually become a sick industry. Some major producers have already closed down while a few other major manufacturers are struggling to retain their labour force.

With the improvement of living standards, footwear has become a fashion item. Consumers anticipate frequent changes in design and styles. Due to financial constraints local industrialists were not in a position to carry out frequent design changes to satisfy demanding customers. In addition to the above, due to very progressive tariff structures, imported footwear found Sri Lanka as a good dumping ground to dispose over runs and leftovers at very low prices. Though footwear industrialists drew the attention of the authorities to this problem, no one took the situation seriously and to initiate steps to safeguard employees as well as industrialists.

Imports have increased by 100 percent against last year figures. This is a situation the authorities should be concerned as it involves valuable foreign exchange. Savings on foreign exchange should be treated as equally important to earning foreign exchange.

Footwear industrialists up to now have lobbied at various forums over their plight but nothing positive has happened. The industry is in danger of losing 25,000 jobs if the authorities doesn't review the issue of imports.

Industrialists have given an assurance that if certain changes are made in the duty structure, the industry will once again emerge as a winner catering to the growing customer demand.

What needs to be done? Follow the example of neighbouring India and introduce a minimum invoice value for imports. While maintaining the present duty structure for completed footwear i.e. 25% on CIF value and duty surcharge, make the imports of shoe components duty free.

Until the Bataatha new tannery project is commissioned in Hambantota, steps should be taken to reduce the duty on imported leather. Limit the number of pairs on personal baggage.

Footwear manufacturers are confident that if the above changes are implemented on a priority basis, they would be able to fulfill increasing customer demand for new designs, protect jobs and save valuable foreign exchange.

(The writer is Deputy Chairman, Ceylon National Chamber of Industries and Chairman of the Chamber's Footwear and Leather sector).

A Business @ Home
What business is right for you?
By Nilooka Dissanayake
How do you pick on a business idea that is right for you? How do you pick a business idea at all - leaving aside suitability? I feel that the "right business" for each person is an entirely personal thing, say like choosing a life partner or deciding what you wear. What is right for me may not be right for you. So, don't expect others to find you a business idea. Find one yourself. No one knows more about you than you do.

Succeeding in business is all about doing better in your chosen niche than everyone else operating in that niche. That is called competitive advantage. How can you do better than others unless you have something special to offer? Let us analyse carefully how this "something special" concept applies to all the varied ideas spinning around in your brain. These ideas occurred to you for one of three key reasons:

Because you like it - Have always dreamt of it. Others can give a million reasons why it will not work; so many obstacles can hamper your progress; but you still want to do it. Welcome to the club with members like Henry Ford and Thomas Edison. If you are in this category, you need nothing other than blind faith, perseverance and optimism about your project. Nothing is an obstacle. Nothing can stop you. But, make sure you know what you want. Regret is not a feeling you can afford to encounter down this path.

It also helps to know something about the business field you want to enter and to have an idea of the market. You feel you can do it with the resources, skills and opportunities available to you. By resources we mean money, ability to find materials and supplies, access to technology and your contacts. So many little things which will help you perform relatively better fall into this category.

This is one step ahead of a mere liking for the idea. Liking is one thing; being able to do it is another. Think of swimming or running in a marathon. As my father is fond of saying "what is possible should be more desirable than what is desirable." Of course, that does not mean you need to give up on your dreams. You can learn and develop skills and competencies.

You see this often: someone starts a small catering business; another goes into dressmaking; home gardening and it turns into a home business. The "special" factor here is the skill. A good dressmaker will stitch a better dress than a novice who dreams of being a good dressmaker. Knowing what to do will help you save time, reduce wastage, provide good quality and eventually make a better profit.
Have you come across people with experience in selling starting their own business? Or engineers going into business making technical components? Here, in addition to skills, their insight into an area and the network of contacts gives the competitive edge.

Many people pick on an idea because there is a market for it.
A very logical reason. We will talk a lot more on this in the coming weeks.
A good business idea is born when you combine a liking for the subject, some compatibility with your current skills or circumstances and a potential market, which will help you make a reasonable profit.

What is reasonable depends on each individual. I may be happy with a profit of Rs. 10,000 a month and the satisfaction I get; you may be unhappy unless you get Rs. 100,000 a month in profits and not care about satisfaction and that sort of thing. And if you go into it purely for money without the other two factors - liking and ability - you may find the road rough. Some people are very flexible and adaptable. The purely-for-money business idea may spur them on to learn new things, work very hard and keep going. It may make others give up in no time. So, as you seek a business idea to suit you, let us bear all those factors in mind.

Are you having so many ideas and cannot choose one? Or are you just dreaming of business and can't seem to find an idea? Tell us how you feel and we will try to help you. You can contact me on 074-304100 or email your comments to btimes@wijeya.lk

The writer is a Chartered Management Accountant by profession with a Masters in Business Administration from the University of Strathclyde in Glasgow. She is the Managing Editor of Athwela Vyaparika Sangarawa (Athwela Business Journal), the only Sinhala management monthly targeting the small and medium-sized business operators.

Seminar on techno solutions for clothing business The Bobbin (Pvt) Ltd and Apparel Technologies (Pvt) Ltd together with Textile Institute Sri Lanka Section organised a seminar on the theme of "Technological Solutions for the Competitive Clothing Business" in Colombo on May 3.

Harry Vornhalt, Senior Technical Consultant, Groz Beckert Germany, making a presentation on "Needle Technology - The subtle difference", gave details as to why the quality of a needle is important for the competitive clothing business. Gihan Nanayakkara, Deputy Chairman, Sri Lanka Apparel Exporters' Association, spoke on "Achieving Buyers Target Prices By Saving Fabric with CAD/CAM Solutions". He took a practical example, explaining how he was able to save as much as 30 percent on fabric cost by using CAD which enabled him to achieve the buyer's target.

Groz-Beckert KG, Germany, who is one of the leading high quality needle manufacturers in the world since 1852, has appointed The Bobbin (Pvt) Ltd as its sole agents in Sri Lanka for their sewing/embroidery needles.

Baubles and beads of great delight
By Naomi Gunasekara
Surrounded by tins, glass bottles and plastic containers full of colourful beads, sequins, buttons, glitter, ribbons, piping, thread, lace and ornaments, M.A.M. Rizvi of Siri Centre was busy weighing colourful beads on a silver scale.

Siri Centre, situated at City Paradise Supermarket, Main Street, Pettah, is a tiny shop full of diverse goods and deals mainly in gold buttons, cord, lace, ribbons, embroidery, imitation jewellery and other fancy goods.

Like most shops situated at the ground floor of the supermarket, Siri Centre too specialises in beads, buttons, thread and ribbons. While Rizvi stood facing stacks of colourful silk ribbons and cotton, nylon and organza lace imported from India, he gestured towards thousands of flower, heart, star and moon-shaped buttons and beads. "We sell a lot of gold and silver buttons and beads. We also have all the other colours needed by our customers," said Rizvi while spreading daffodil-yellow flower-shaped buttons on the table.

Siri Centre displays over 40-50 varieties of beads of the most delicate shades like apple green, peach, lavender and violet, while boasting of a collection of bright, colourful buttons, between 3-14 in size, in shades of mossy green, sunflower yellow, hot pink and scarlet. While some of the beads and buttons are plain and simple, others have intricate and dainty designs.

"Most of our buttons and ribbons are used for cake decorating, flower making, sewing and other decorations," says Rizvi who points out that the demand for buttons and beads depend on the whims and fancies of consumers to a great extent. "Sometimes we purchase buttons thinking the consumer will like them but it proves to be otherwise," he said placing a bottle containing russet buttons. "These have been at the shop for almost 10 years," he said.

According to Rizvi, the shop contains buttons that are 10-15 years old. And with his expertise in selling buttons and ribbons for nearly four years, Rizvi is well aware of the consumers' needs.

His clients mostly comprise beauticians, seamstresses and brides to be. Items like buttons, ribbons, piping, beads, sequins and glitter are used mostly at weddings to make bridal gowns and dresses for bridesmaids and flower-girls more attractive.
"People don't like to buy local goods. They prefer imported stuff," he says. Local products have less appeal compared to Indian products as the latter are available at a low cost. Moreover the consumer generally does not believe that local goods can be as good as imported goods.

Siri Centre, which is essentially a wholesale shop, sells both wholesale and retail today realising the importance of changing with the times. "It is advisable to satisfy the needs of customers without sticking to wholesale or retail sales because it is difficult to survive if you stick to one."

Business has not been brisk for Siri Centre during the last two years and Rizvi hopes that things will improve now that economic policies have changed. "We didn't buy new stocks for some time because we were sceptical about the economy. We only bought what was essential and we will wait for a while before we replenish our stocks."

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