Key Perspectives by Dr. Anura Ekanayake – Immediate Past Chairman of the Ceylon Chamber of Commerce and IPS Governing Board Member
By Anushka Wijesinha, Research Economist – IPS
In this blog post, we bring to you some key quotes from the speech by Dr. Anura Ekanayake, member of the board of governors of the IPS and the outgoing Chairman of the country’s premier private sector body, the Ceylon Chamber of Commerce (CCC), at its Annual General Meeting last week, on the 28th of July. His comments were timely and relevant, leaving some important thoughts on post-conflict economic recovery and the role of the government and the private sector.
A key statement he made, on the role of the private sector in driving Sri Lanka’s post-war growth agenda, was:
“We cannot leave all this to the government to achieve on its own. After all, over 80% of the national output, a similar percentage of investment, 75% of employment and over 95% of exports come from the private sector”.
He stressed the need for a proactive and productive engagement between government and business:
“What I am proposing is an approach where, we continue to ask the government for facilitation, but, by first taking the initiative to actively demonstrate what is indeed possible. Let us then tell the authorities, ‘see what we have done, now help us to do more’”
We created a ‘wordle’ (using the online tool available at www.wordle.net) of Dr. Ekanayake’s full speech, capturing key words and highlighting them according to the frequency with which they featured in his speech. This is displayed below. This is followed by some key quotes that we thought ought to be shared with the ‘Talking Economics’ audience.
On the role of the CCC and the private sector in the immediate post-war period:
“As people who understand markets and business, our commitment was to initially wholeheartedly support the welfare of the displaced and thereafter their speedy re-settlement along with the restoration of economic activities in the affected areas. Our members contributed immensely though silently in these undertakings.”
On the role of the Chamber in medium- to long-term post-war recovery:
“Nation building has to be supported by several pillars – not only that of economic progress. Given the expertise and the credentials of the chamber, our Comparative Advantage was and remains in the area of business and economics. Without any doubt, this is the area where we can make the best and biggest impact”.
On the need to be cognizant of the challenges, while recognizing the strong post-war performance:
“Our future progress will be much stronger and surer, if we are mindful of the challenges along the way. Not to take away or reduce the glory of what has been achieved, but rather to ensure its sustainability. Not to point fingers at any one, but to join hands with all stakeholders to do the right things”.
On the key socio-economic challenges facing post-war Sri Lanka:
“On the domestic front, my biggest worry is the relatively high rate of youth unemployment. While the overall unemployment rate is a mere 4.5%, 18.1% of our youth between the ages of 15 to 24 years are unemployed, and 10.7% of those qualified with GCE A/L or more are unemployed. At the same time, almost all sectors of the economy are experiencing labour shortages. What a paradox!”
“That youth unemployment was one of the major causes of the North-East conflict as well as the several Southern uprisings should never be forgotten”.
Further emphasizing the need to address youth unemployment:
“We of the private sector need to find ways of employing the youth meaningfully and in a productive manner. If we leave it to the government alone, to absorb them to the public sector, then, the budget deficit will widen, inflation will revert to where it was, interest rates will rise and the currency will depreciate”.
On the need to be wary of continuing regional disparities in prosperity:
“My second big worry is the continuing sharp difference between the level of prosperity of the Western Province and that of the others. While the poverty head count in the Western Province is a mere 4.2%, it is more than 10% in Northern, Eastern, North Western, Uva and Sabaragamuwa Provinces. Again, if the sole responsibility of addressing this is left to the government, then, the same story of widening budget deficit due to direct and indirect subsidies for poverty alleviation, rising inflation along with interest rates, and depreciating currency will recur”.
In a recent article on this blog, we looked at some key highlights in regional economic performance, including poverty and private enterprise growth (‘2010: ‘Phenomenal Year’ for Corporates, but Shared Growth across Sri Lanka Remains a Challenge’ – http://bit.ly/oHv04G)
In that, it was highlighted that although the Colombo Stock Exchange benchmark All Share Price Index (ASPI) almost doubled from 3,494.6 to 6,635.9 between January 2010 and December 2010, regional growth disparities are ever prevalent – the Western Province continues to dominate the country’s economic geography (45% of GDP in 2010), and most other Provinces have not grown their GDP share in the last 5-6 years by any significant proportion. The article also emphasized that while the total number of industrial enterprises increased from 2,340 to 2,404 between 2009 and 2010 in the Colombo district, the increase in the Anuradhapura district, for example, was only from 27 to 30 during the same time period. Moreover, regions outside the Western Province have not seen a significant rise in Section 17 registered BOI industrial start-ups between 2006 and 2010, with Colombo and Gampaha continuing to dominate the BOI industry geography. While the poverty rate in Colombo ranges at 3.6%, the poverty rates of Batticaloa and Moneragala are 20.3% and 14.5% respectively.
On the need for the private sector to ‘get on board’ with addressing this challenge of regional growth disparities, Dr. Ekanayake said,
“Here we need to find ways and means of building sustainable value chains on a win-win basis with the provinces…”
“I am not calling for charity. What we need are sustainable, innovative business models, which will increase economic value addition in the provinces thus creating new jobs”
On the need to address issues on the political front:
“A nagging worry, however, is that addressing economic issues alone may not be sufficient for the people of the North and the East to be happy and content”
“What we as the business community can do to help this process is to build trust between communities based on mutually beneficial commercial transactions, value chains, investments and creation of job opportunities without discrimination. As a Chamber, we must represent the interests of the regions more and more”
On what Sri Lanka should do in preparing for emerging global threats and changing global dynamics:
“On the global front, I worry about potential consequences to us arising from the US and European public debt crises, the on-going ‘re-balancing’ from the West to the East, political upheavals in the Middle East which is an important market for us, and then the volatility of global petroleum and food markets”
“We should be able to develop some degree of cover from these developments which are beyond our control by whole heartedly contributing to the domestic supply of energy – which in our case will have to be non thermal – and in food production via agriculture, animal husbandry and fisheries, and exporting more and more to South Asia and then to the rest of the Asia”
“Building much closer economic relations with India has to be an essential part of this effort…”
A previous article on this blog highlighted the need for Sri Lanka to take a close look at the changing global economic landscape and find strategic ways of fitting in. See ‘As Global Economic Power Shifts, Where Will Sri Lanka Place Herself’ – http://bit.ly/k3DOOq)
On Sri Lanka’s dependence on special trade concessions:
“We can also learn to be more and more self reliant, asking for a level playing field and not for any special concessions. Obviously we do not want special barriers thrown across our path either”
In conclusion, he asserted:
“The dream of making Sri Lanka the ‘Wonder of Asia’ is realizable – if each of us can contribute what little we can – before asking others to do the same, the totality of what we achieve together will indeed be very large”
A PDF version of the full text of Dr. Ekanayake’s speech is available for viewing below
CCC AGM Chairman’s Speech 28July