‘We have to be more imaginative in our enterprises’

Address by Dr. Sarath Amunugama Minister of Enterprise Development and Investment Promotion at the recent inauguration of Marks & Spencer Operations at Global Park - Seeduwa.

SPEECH: As a country we have to, we can think big; being a small country we have no future if we cannot think big. Today in a highly competitive world, every country must play to its strength. As a country on a growth trajectory, Sri Lanka needs many initiatives such as the one pioneered by Global Park and Marks & Spencer Ltd.

We have many advantages. Firstly the location. A very few countries in our region can offer a land of this dimension, so close to the airport, and a port. If you have this amount of land in Singapore or Hongkong you are automatically in the dollar billionaire class; it’s difficult to get extents of land like this in Mumbai, or Chennai.

So though we have been rather negative in the past saying that Sri Lanka cannot find land; after I took over BOI, I have found that that is one of the strengths that we should capitalize on.

Secondly, our people; I think many of you would agree, that after about six decades of investment, in education, health and social welfare, we have created a workforce, which is as good as any in the world.

Of course, it could have been improved if we had, for example, taught our people international languages. If we had moved earlier on into the computer age.

But even so, we have to be proud of what we have got now; A highly receptive workforce. Only the other day, I was speaking to some top IT entrepreneurs from India, and they told me that one problem with Indian employees is the high attrition rate.

Once they come and start working, in a highly mobile society - actually it is a good sign - people work for a short while and move on very fast. A Sri Lankan employee stays with a company for a fairly long time. They are skilled, and our attrition rates are low.

Thirdly, we can use of our “Hub” status. Very few people have thought of exploiting that. We have the capacity to be a hub for South Asia. We are just 25 miles away from one of the biggest emerging markets in the world. And not very far away from the East Asian markets and the markets of China and Japan.

What other country can boast, of being mid point between the Middle East and the Far East; or if you take going northwards, we look at the markets of India, Pakistan and now the growing markets of central Asia.

I want to thank Ravi Karunanayake for having the good sense to support Free Trade Agreements; to promote those Agreements with India and Pakistan. We should think of widening such trade cooperation to other South Asian countries which would include largely Bangladesh, as a close partner.

We have special tariff concessions within the European Union. Only last week I was able to speak to Margot Wallstrom, Deputy Chairman of the EU, who knows Sri Lanka very well, and she assured me she will try her very best to continue with those tariffs which only Sri Lanka has won in our Asian region.

Due to various political and other factors, while limitations are placed on exports from China, at least in the near future Sri Lanka will be the beneficiary of those overt and covert constraints that are put on trade with the big developing industrial countries of China and India.

We are in a very pivotal position. But that is not enough. We must learn to exploit every single advantage that exists in this country. There is a saying by the Chief Minister Battarcharjee - Leader of the Communist Party of West Bengal. His slogan is “Reform, Perform or Perish”.

I very often wished that our Leftists would also adopt this policy. Many of them are following only the perish policy. But as a country we cannot accept that. We have to accept the policy of “reform, perform or perish”, as in China and West Bengal.

I have told the BOI that we must think big and I have set them a target of US dollars 2 bn in the near future and in a couple of years US dollars 4bn.

This is ambitious but I think is quite achievable. The BOI should go for big ventures like this one. I am glad to say, we have the assurance of an Oil Refinery from the Middle East which will cost US dollars 1 bn.

There is also a Chinese offer of a coal power plant on a private/public sector partnership which will be approximately US dollars 1 bn. There are many other ventures. Only last week I had negotiations with Croatia which is keen to establish a ship-building centre in Sri Lanka.

Hambantota must be projected as a mega construction zone and industrial port. That is how we want to think big. With Power plants, Oil refineries, with Ship repair and building and with mega projects which will bring it in line with the tendency for mega projects all over the world. That is the only way in which countries can now survive in a highly competitive economic situation.

This idea is something that is very modern. If you look at the objectives of companies in America and Europe, a major one now is to cut costs and to compete.

If you can’t cut costs, you can’t consolidate, you can’t get your product dispatched on time to you markets, and then your company shareholders are going to be very worried and very angry. So every enterprise today is looking minutely as to how they could cut costs and make more money for their enterprises.

That is keyone of today’s competition. Without competition the world’s industry will not move. Otherwise you might have a situation which America is facing today.

They are undertaking large imports from big countries like China or their own funds are flowing into China for manufacture and a huge Balance of Payment gap has arisen. It is reminiscent of our own Balance of Payment gap.

America is having a huge balance of payment gap. And they are now wondering how to use fiscal policies to narrow this gap because like Sri Lanka, the US is also living beyond its means.

So, this is a time we have to fight for every Dollar. The Sri Lankan public is not aware, that, for example, the cost of living is largely caused by the falling Rupee. And why is the rupee falling? Because we don’t attract sufficient foreign investment and foreign currency into the country. It’s as simple as that.

We have to buy more and more rupees to by less and less dollars. So naturally we have to spend more rupees to buy those dollars.

If their is an influx of dollars or foreign currency then the rupee will get stabilised as we found during the tsunami when there was an inflow of foreign currency. Then we were naturally able to stabilise the rupee and I was given the credit as Minister of Finance.

But, it is very necessary that our country positions itself, uses its hub status, uses all those very favourable factors that we have to attract the highest amount of foreign investment, foreign trade and foreign inflows of capital which will then strengthen the rupee and thereby even help alleviating the cost of living.

That alone is not enough; we have to manufacture more, we have to be more imaginative in our enterprise; I want to say that I am particularly glad that this is a private sector operation.

Global Consolidation Parks, Parks like this, have to have substantial private sector thinking. I am going to have close by, in 22-acres which belongs to BOI, a Techno Park, where all the big IT investors will come in initially and start their operations.

One lesson that we have learnt from India is that we must not think that these investors will come and establish their own campuses, their own research centres, initially.

In India, they came into these parks, worked in those buildings, got to know the country and at the next stage, set up their own campuses and so on.

So, Techno Parks, and Global Parks like this, where you consolidate activities, is the them of the future. We can use our Hub status, our availability of land, Initiatives of our people, to align ourselves with this growing concept.

That time has come and this is an example of what we can do. And we have to do much more if this country is to prosper in order to give our people a standard of living that they richly deserve.

I want to thank every one of you and to wish that this enterprise, this gigantic structure, which I think is the biggest in South Asia, will be full of orders like from Marks & Spencer, for consolidation.

Marks & Spencer has shown the way, others are also welcome I believe, to use these facilities and this will spur our airports and harbours also to expand.

As you know, we are undertaking large expansion projects, in the airport, and in the port in Colombo, we are thinking of the Industrial Port in Hambantota; so all these are integrated and as an important component of this integration, I want to thank each and every one of you and want to tell you, particularly, our foreign friends, that the Government of Sri Lanka is committed to helping you.

We welcome you and we are greatful to you for co-operating with us and being a partner in our growth process.