What has deterred local and foreign investment in Sri Lanka’s past two decades? The war, stupid!
This has been the eternal bane of the private sector over the years since 1983 when ethnic tensions exploded into full-scale war. There were others who said government facilitation was also a problem.
Now fast-forward to October 2009 and five months (in May) after the LTTE has been militarility defeated: Investments are still hard to come apart from the stockmarket zooming and trading and banking services taking off. So what’s the problem?
Some businesses entrepreneurs, who are positively investing, reflect on the famous John F. Kennedy saying (when the US President made his inaugural presidential speech on January 20, 1961): “Ask not what your country can do for you. Ask what you can do for your country.”
In an email poll this week, the Sunday Times FT asked its readers whether or not the private sector was slow in investing in post-war Sri Lanka and the responses were very interesting with a key, standard factor – that investment was slow because of uncertainty over government policy, roadblocks and elections. And most agreed that investment was slow and gave reasons for it.
In most post-war economies, private sector investment has surged – take Japan for example where it’s the brands that have made what Japan is today. No excuses were given and none taken. Civil society and businesses worked together to build the country and today brands like Nissan, Toyota, Sony, Yamaha or Toshiba are legends.
Having said that, there are companies and sectors here that have flourished during a period of conflict and progressed without giving excuses. Take the garment industry which has seen tremendous growth and produced world-class workers and what about Dilmah, Sri Lanka’s only international brand?
Handouts and concessions are what most of our businesses have been seeking over the year in addition to the perennial complaint of ‘removing roadblocks (to investment), minimising red tape and facilitating investments’. In recent weeks after the war ended, the private sector has been looking for a kind of ‘policy’ statement/direction from the government on the investment climate – rather than go ahead and invest and create jobs.
The government did its job – finishing the war. Now the private sector must deliver the goods and lift the economy to never-before levels. There has been a rush, however, to the East looking for tourism opportunities while in the North it’s more to do with trading and services opportunities. Understandably, it’s too early to start talking of industrial development as roads have to be cleared of mines and infrastructure must take place.
But what about the rest of Sri Lanka? The complaint about an investment slowdown across Sri Lanka has always been that foreign investors are wary because of the war, etc. The war is over; any more excuses from their local counterparts?
One businessman, responding to the poll, said that during the conflict prospective buyers and business partners were reluctant to place orders as they ‘doubted our ability to adhere to stringent delivery schedules. As a result, the industry lost several opportunities.’
Now he says, globally reputed buyers are interacting with ‘our industry at a heightened level of confidence and certainty’ and ‘my own company received a substantially big order from a reputed Japanese company as soon as the war ended because we went out and made our case’.
That’s the kind of positive sentiment and dynamism that is lacking in the private sector. The private sector is the driver of the economy, after years of asking for it. Now it’s delivery time.
An ‘advertising’ hoax
The ‘historic’ government announcement at 8.05 pm on TV channels on Wednesday was anything but historic and being widely considered by the public as simply a hoax.
It is ‘advertising creativity’ gone too far, creating level of public panic apart from curiosity, interest and speculation. A more disturbing issue that arises from this highly, irresponsible act is that the public will reject further ‘notices’ like this even if, seriously there is an important government announcement to disseminate.
Wild rumours were spread about a likely dissolution of parliament, oil discovery in Mannar and so on. More than a million SMS was sent through a directive from a government agency, and probably millions more waited with bated breath for this ‘historic’ announcement which left people puzzled and angry.
Transport Minister Dulles Allahaperuma has, according to newspaper reports, said it was his decision to use this ‘ad’ technique to promote the ‘Uthuru Mithuru’ (northern) railway reconstruction programme.
This kind of advertising gimmick raises some fundamental issues: isn’t creating public panic an offence and shouldn’t there be ethics in advertising?
Some years back there was discussion on the need for an advertising regulatory mechanism to tackle bad and tasteless ads in addition to other issues. Wednesday’s fiasco once again begs the question whether the need for some regulation is required. |
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