Financial Times

The private side of the private sector
By Random Access Memory (RAM)
There has been so much talk this week and for sometime now about the role of the private sector in the development of the country's future. An appeal was made at the recently concluded AGM of the Ceylon Chamber of Commerce for all private sector leaders to read, grasp and buy into the vision of 'Regaining Sri Lanka'. After all, the document has been available to members of the body corporate for sometime now and has been deposited in cyber space at several Internet websites for access by all. It has been talked about at many forums but the buy-in seems to be slow and low from both the formal and not so 'formal' private sector.

This is apparent, as the prime minister has had to call formal private sector leaders last week to remind them that reciprocity is wanting from them. After all, there have been dividends from the silencing of guns for over a year and half now. The private sector was officially declared the 'Engine of Growth' and was expected to fire fast and strong. Donor funding was committed and the private sector was identified as the operational spearhead. Reforms were undertaken in the financial and labour sectors and liberal tax concessions and amnesties offered.

The objective of all of this in the short term was to create new wealth and with it production of goods, services and employment. There is an ultra-urgent need to bring down the high cost of living, sharing dividends with the people as a whole. This is seen as the cornerstone of the launching pad for long term take off, when the econo-socio-political conditions are expected to ripen.

Instead, what we see is a boom in trading mainly in the imports sector, with key traders rushing also into the North and East to set up operations to sell foreign goods with all their glitter. De-assembled second hand car parts are being brought into the country for reassembling as cars for our already congested roads. More and more bakeries producing bread, buns and croissants from imported wheat flour are springing up. Tourism entrepreneurs of international repute are coming in for management of properties yet raising equity in the local financial market. A fair share of share trading is moving existing wealth into the hands of a few individuals and the privatization of the so called 'higher yield potential' public sector institutions has been a contributory factor to the process.

The relatively few active local producers and exporters are lamenting about the high costs of production as a result of higher energy costs, inefficiencies and the blatant lack of integration between the small time 'informal' sector and mainstream operators. There are youthful new generation technoprenuers who are willing to take risks and go into innovative ventures but venture capital from the formal private sector is slow in coming.

It is true that the lack of peaceful coexistence and collaborative politics between the executive and the legislature gave jitters along the way. The antics of ministers openly flouting dictums of meritocracy and transparency from day one did not help build confidence either. And now we have the stalled peace talks, more cases of abuse of power by top ministers, officials and even their kith and kin and talk of mergers between once polarized political parties and also of impending elections.

These uncertainties place other realities on the laps of most private sector operators and leaders. Not all but most, now have to allocate resources to make campaign contributions not only to the parties but also to individual contestants. They need to support their school, class and club mates, friends and relatives.

Since there is no need for declarations to be made of whom the contributions are made, they also buy insurance cover type concessions by making contributions to those they do not much like, but may need in case tables turn. In addition, they need to find non existent jobs for those recommended by the political big wigs. Closer to elections, it is said, the going gets even tougher.

The private sector to its credit has been reciprocally supportive of the government through words all along the way. They have openly sung praises on the efforts made on the peace talks and policy reforms and made presentations at major international forums to build confidence on our ability to deliver. Seldom have they been critical of policy mix-ups, misdeeds and/or corruption and had always left it in the hands of the media.

Even when recommendations were made to the government, they were in the main, pre-tested to ensure palatability. Such is the private side of most of the private sector.The writer is a former public servant with wide international experience in public/private sectors, in a range of disciplines. He could be reached through The Sunday Times on ft@sundaytimes.wnl.lk.

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