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Tuesday, February 15, 2011 - 6.19 GMT

Enabling environment for business to thrive – Weeratunge

 

You as representatives of the corporate sector have been a courageous companion in Sri Lanka's journey during times of turmoil and now the Government has finally created an enabling environment for you to thrive in and help take this country forward in this post conflict period, stated Secretary to the President Mr. Lalith Weeratunga, addressing the Business Today TOP TWENTY awards ceremony recently.

This government will continuously strive to create conducive conditions and employ useful instruments to facilitate the private sector in its growth.

One of the major areas for investment must be in manpower skills development. It was of course a major responsibility of the Government, to ensure that our human resource is used productively not only for their individual benefit but also to advance the progress of this country as a whole, he said.

One of the areas identified for enhancing the skills of our workforce is to expand industry- specific vocational training with continuous retraining and reskilling programmes.

With a clear vision set for Sri Lanka by His Excellency the President, we can be hopeful that our future as well as the future of our children and grandchildren will enjoy life under the sun in a country that is soon to be the Wonder of Asia.

In fact, the Mahinda Chinthana Vision for the Future pledges to make significant changes in the education structure to produce trained persons to meet the emerging challenges in both public and private sectors, he added.

Full text of the speech

Let me first of all say how glad I am and how privileged I am to be able to address such an august gathering. In that connection let me thank my good friend Mathi for giving me this opportunity to share some thoughts on this momentous occasion. We are here to pay tribute to 20 leading companies that have reached excellence in business and corporate Sri Lanka. My congratulations to all the companies that have earned this coveted title and my best wishes to aspiring companies who I am sure will be bracing themselves for tough competition for a place in the next year's awards from tonight onwards.

You heard, a couple of minutes ago the story of our being able to defeat terrorism, it is something we must celebrate and talk about. We ended 30 years of bloodshed and economic stagnation in May 2009 clearing the path for the private sector to engage in enterprise and investment. As very rightly stated by the compere, today we are here without any fear because terrorism has been eliminated from our land. That feat many thought was impossible. Sri Lankans as well as other nations did not believe that terrorism could be eliminated from our midst. But we did it. Let me thank the two distinguished members of the armed forces who are here for being involved and of course I must pay tribute not only to the great leader that Sri Lanka produced to take this tough stance against all odds, against all opposition, against foreign pressure, he is the country's leader, but also Mr Gotabaya Rajapaksa who brought in great dimensions to defeat terrorism. The opportunity cost of the war against terrorism has been tremendous in all possible aspects. It becomes more apparent when we experience how in these past one and a half years of peace alone the business climate has improved remarkably, prompting Business Today no doubt to elevate its traditional top notch ten to 20 this year and give due recognition to the dynamism and competitiveness of the emerging corporate giants. I am encouraged to see several new companies making the list for the first time since Business Today introduced this ranking system in 1998. With a clear vision set for Sri Lanka by His Excellency the President, we can be hopeful that our future as well as the future of our children and grandchildren will enjoy life under the sun in a country that is soon to be the Wonder of Asia. You as representatives of the corporate sector have been a courageous companion in Sri Lanka's journey during times of turmoil and now the Government has finally created an enabling environment for you to thrive in and help take this country forward in this post conflict period.

With a clear vision set for Sri Lanka by His Excellency the President, we can be hopeful that our future as well as the future of our children and grandchildren will enjoy life under the sun in a country that is soon to be the Wonder of Asia.

This government will continuously strive to create conducive conditions and employ useful instruments to facilitate the private sector in its growth. We were conferred the status of a middle income emerging market country by the IMF last year. For the first time in about 50 years, our economic growth rate has surpassed inflation. Not only have we to maintain this strength, but we are looking to increase the growth rate from the present eight percent to ten percent while curtailing inflation around five percent. The Hon Minister is here who is responsible for tourism and many other things as you saw in the clip that was shown just now. I just want to say, that we are in for good times. We surpassed 600,000 tourist arrivals in 2010. The tourism sector continues to show promising signs of exceeding expectations. Critical infrastructure is being provided as never before. Ports, highways, power facilities are being built at a rapid rate to facilitate and encourage investors. Private sector has the opportunity to tap into business in virtually every sector of our economy and they are already doing that, be it in agriculture, health, industry, latest is education, transport, banking or insurance. Interest rates have been reduced on private sector borrowings and more facilities are envisaged in the future. We expect that FDI and higher foreign financial inflows to the private sector will reach USD 1.5 billion and that more domestic funds will be available at competitive rates to engage in public sector development projects.
In World Bank's Doing Business Index, we are currently placed at the 102nd slot. Our position has not changed in 2009 and 2010. But, we are making every effort and that can only be done with the help of the private sector to elevate this ranking to 30 by 2016. And that is also the year, my dear friends, Sri Lanka would achieve the IT literacy of 75 percent. That is the target set by His Excellency the President in his IT initiatives. I wish to commend the Central Bank's efforts in assisting in this regard by publishing a step by step guide to doing business in Sri Lanka.

One of the major areas for investment must be in man power skills development. The private sector has to tap the human resource available in the country for its own advancement. As I mentioned earlier, Sri Lanka is engaged in an upward trajectory of growth. The government is promoting regional hubs in the areas of naval, aviation, commercial, energy and knowledge. We can build infrastructure and introduce the latest technology, but what will be the most valuable resource will be sustaining the economic competitiveness of these assets. It, of course, has to be a competent, skilled workforce. They need to be competent and skilled not just in traditional fields, but to meet new requirements in our economy like information technology, nano technology, oil and gas technology, satellite technology and etc. In fact, the Mahinda Chinthana Vision for the Future pledges to make significant changes in the education structure to produce trained persons to meet the emerging challenges in both public and private sectors. Every year, approximately, 14,000 young people graduate from national universities in Sri Lanka. For some of them, stable employment is assured. For others, many factors influence in securing employment. Market demand, skill levels, personal initiatives and of course access to information. Traditionally, every year, more than 200,000 students leave school after advanced level, of whom, only about 20,000 manage to gain entry to national universities. Majority of the remaining students either seek job opportunities or seek vocational training of some sort. In that connection, I am so deeply privileged to have been associated with the Ven Podi Hamuduruwo, way back in the 1980s when he started his vocational training initiatives at Gangaramaya which trained thousands and thousands of young people to get into very productive employment opportunities.

This is of course a major responsibility of the Government, to ensure that our human resource is used productively not only for their individual benefit but also to advance the progress of this country as a whole. As in most other countries, the government as a single entity is the largest employment provider. The Government must find means and resources to enhance the effectiveness of not only the persons directly employed by it, but also the entire workforce through appropriate education and training. It is here that the private sector in Sri Lanka can play a major role. Many countries have realised that manpower and skills development cannot practically be the sole responsibility of the Government. Public private partnerships are therefore common in human resource development strategies in many countries. The private sector, especially the enterprises create the demand for jobs in industries. The industries in turn define the type of skill required. Here in Sri Lanka, we have to acknowledge that there is a mismatch between what is produced through the local educational and vocational training stream and what is required by the industry. The graduates who pass out every year find that they are not received with any great enthusiasm by the industrial sector due to their deficiencies in managerial and technical capabilities. We are going through post conflict development. If we consider the experience of post conflict regions the scope for industrial development in such countries is reliant on the ability of the labour force to acquire skills in the manufacturing sector. This may be applicable to us as well and we need to forecast and be prepared for the manpower needs of the future growth industries. But when it is realised that the supply is not readily available to meet this specific industry demands the enterprises themselves can take on skills development and job trainings of these people. The experience is that graduates who train through programmes run by the industry show higher employability, productivity and labour mobility than those trained through training institutions.

In fact, the Mahinda Chinthana Vision for the Future pledges to make significant changes in the education structure to produce trained persons to meet the emerging challenges in both public and private sectors.

One of the areas identified for enhancing the skills of our workforces is to expand industry specific vocational training with continuous retraining and reskilling programmes. There can be many opportunities for the industry to collaborate with government vocational training programmes and create their own supply to the market. You can be involved with the vocational training institutions in Sri Lanka in planning programmes from the outset to meet the future growth of your business. Sri Lanka developed, as you would very well know, a well thought out apprenticeship scheme in the early 1970s. Modelled on the German skill system, our apprenticeship scheme did yeomen service to both the industry as well as young people who were keen to learn a trade or acquire a skill. From about year 2000 due to poor government industry collaboration as I feel the apprenticeship scheme seemed to have lost its original sheen. Fortunately for the youth of this country the present minister of youth affairs and skills development Hon Dullas Alahaperuma has understood this issue and is taking steps to remedy this situation. Another area of concern is the brain drain. Highly competent professionals, especially in science and engineering skills, have been leaving our shores, primarily because of the lack of opportunities in the innovation industries. We have internationally known NASA scientists and engineers who have made a mark in their countries of domicile. In fact, the State of the Economy Report for 2010 published by the Institute of Policy Studies discloses that Sri Lanka is only second to the Philippines on the extent of brain drain in this sector. It is not often that the Government can afford to pay high salaries to such deserving Sri Lankan professionals and retain them in this country, but the private sector can afford to attract them, retain them in this country and make use of their services for national development. I have spoken briefly thus far on how we as a government and you as a private sector can help this country flourish and forge ahead.

You are entrepreneurial leaders in Sri Lanka's corporate world, with vast amounts of corporate experience and business acumen that has brought you to this status, to the level of winning highly acclaimed awards over the years. I am sure that your superior management skills have served you well in achieving the excellence that you have displayed so far.
I would like to divert your attention to a slightly different topic. An aspect of business practice. Just a few days ago I was browsing through this month's issue of Business Today when I came across several pages of an article written by Sir Richard Branson, the British industrialist and the founder of the Virgin Group that had created an empire from airlines, record labels, mobile phones, digital publishing and even space travel. Richard Branson incidentally is one of the most influential entrepreneurial figures in the world known for his humanitarian work and his efforts at tackling global environmental problems. While on this thought I was reminded of an interesting article I came across in a journal some years ago on what is known as corporate philanthropy. The Ven Podi Hamuduruwo in fact brought about another aspect of philanthropy in these times of national need and I am sure you industry leaders who are compassionate, who can afford to help the unfortunate brethren of ours would come forward to help them at this point of time.
"Your fortune is rolling up, rolling up like an avalanche. You must distribute it faster than it grows. If you do not, it will crush you and your children and your children's children."

This corporate philanthropy dealt with one of the best known philanthropic organisations in the world the Rockefeller foundation. This foundation was started by John D Rockefeller, his son John D Rockefeller Jr and his business advisor Fedrick Teller Gates. John Rockefeller created one of the largest oil monopolies of his time and was in a position where he controlled 95% of the US oil market. He had not only vast control over oil drilling, refineries, prices and transportation, but he also sabotaged his competitors, spied on them and manipulated secret contracts. His business success was phenomenal. Certainly I am not asking you to do those stuff what Rockefeller said and did, but these are facts. His business success was phenomenal and his fortunes were expanding so rapidly that he could neither control nor protect them. Very interesting. Yet for all his wealth, he was one of the most hated men at the time for all the excesses in his rise to power. As an attempt to soften this perception, he was prompted to make a contribution towards the rebuilding of the University of Chicago. This is a well known fact. But, what defined him in later years as a well meaning philanthropist was the result of the partnership he built with his advisor Fredrick Gates.

The story goes to say that Gates grew frantic at the extent of Rockefeller's financial holdings and said, let me quote, "your fortune is rolling up, rolling up like an avalanche. You must distribute it faster than it grows. If you do not, it will crush you and your children and your children's children", unquote. Gates was an influential impact on Rockefeller's subsequent philanthropic work. He helped Rockefeller develop a system to ensure that his philanthropic donations were put to the best possible use. Philanthropist's real potential it is argued was in his ability to identify and change the roots of social and economic skills, not its symptoms. Heinz, the other new philanthropist at the turn of the century developed on the idea of scientific giving and were able to act in a more organised fashion and tackle areas that could not be addressed by the government such as education, science, public health and agriculture. Rockefeller was encouraged to build universities and hundreds of schools and help disadvantaged groups in all parts of the country and finally to create the Rockefeller Foundation as a permanent corporate philanthropy in 1913 that reached many parts of the world. Although in terms of assets it has been surpassed by other organisations since then, it is the early legacy of the Rockefeller Foundation that still makes it an embodiment of modern corporate philanthropy.

That said, I am reminded of many other globally renowned philanthropic individuals like Bill Gates and Warren Buffett as well as leading philanthropic companies such as Microsoft, Johnson and Johnson etc which has made a difference to people in many parts of the world. Here in Sri Lanka, we too have philanthropic individuals, many, and organisations that make meaningful contributions to society. We, Sri Lankans as individuals are naturally philanthropic. In fact, the World Giving Index for 2010 had ranked Sri Lanka among the top ten charitable nations in the world, tied with Great Britain in the eighth place. It places us as the leading charitable nation in Asia. This ranking is based on a global survey by Gallup Research Company which measured the percentage of people who have given money to charity. The number of people who have given time to those less fortunate than themselves and those who helped a stranger. So there is an abundance of hope for this beautiful and smart island.

In relation to the philanthropic companies I spoke about earlier we see in the world a new trend, even amongst small and medium businesses to do good in society. We are more familiar with the management parlance for this, which is Corporate Social Responsibility, another way of describing corporate philanthropy I mentioned all this while. Whether it is out of self-interest or image building or sheer altruism, making charitable donations or engaging in initiatives to help the lot of the disadvantaged people has become part of worldwide business strategy for reputation management, and competitiveness. However, the positive side is that this kind of strategy is almost always a win-win situation for the company as well as the beneficiaries as well as other stakeholders such as the government which during competing demand is not always able to utilise resources where they are needed.

So you, as corporate bodies, industry captains, entrepreneurial leaders, innovative thinkers interested in creating this win-win situation, if you permit me to say this, ponder over these few questions. How will my company help to advance the interest of my community or disadvantaged groups? How will my company gain by such an intervention? What is in there for me? Will I gain greater acceptance among my customers due to my projection as a business that cares? How can I ensure that my company's actions are taken as genuine by my customers and the community, and not merely as a budgetary requirement, which is not sustainable in the long run. Some of you who are involved in CSR projects in Sri Lanka will know how effective it is to properly communicate and market what you are doing to the public. Let's put it this way. You fulfill your own objectives and the community is better off for it.

Before I conclude, please permit me to quote from His Excellency the President, when he presented the Mahinda Chinthana Vision for the Future, a New Sri Lanka, a Brighter Future. I think all what we have said, all what we stand for, all what we have hoped, is summed up in these beautiful three or four verses.

‘To win the world, develop the country, to develop the country, strengthen the village, to strengthen the village, protect the family, to protect the family, care for the person. By blending your thoughts, Mahinda Chinthana was developed. By drawing on your courage, we fulfilled your aspirations. I promised you a free nation, I promised you sustainable development, I assured you a better society, I assured you a land of plenty. I delivered. The children of Mother Lanka, Sinhala, Tamil, Muslim, Malay, Burgher, look to us with hope, to be their trustee, to be the one to realise their dreams. Now, I present to you our vision for a brighter future. Together, we will make the journey with your trust. I will deliver."

It's a very personal remark that I want to make, the man who made most of this possible, in fact the architect, the person who made this possible and was the livewire behind all this, is none other than our Chief Guest. He helped His Excellency the President not only during the war, but today as Chief Guest, I am very happy to see you here, Hon Minister. You have helped him in development work that is now the priority of this country. And let me at the beginning of this year, 2011, wish you the very best, all of us hope for a brighter future, not only for us but our children and our children's children.

Thank you very much.






 

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Last modified: February 15, 2011.

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