There is an urgent necessity for Sri Lanka to develop new business models along with the adoption of new technologies and platforms as Sri Lanka grapples with issues growing out of the current pandemic. In the days ahead, the fostering of citizen-centric governance consequent to the use of the digital media in the state sector will ensure that the public will have at its disposal a wide range of essential services expeditiously, President Gotabhaya Rajapaksa said yesterday while inaugurating the Sri Lanka Economic Summit 2020, organized and conducted in virtual mode by the Ceylon Chamber of Commerce.
Extracts of the address:
This year, with the prevailing global pandemic, the Ceylon Chamber of Commerce has taken the commendable step of hosting this summit on a virtual platform.
During the past six weeks, the Government has focused intensively on containing the threat posed by the second wave of the virus. However, unlike in the early stages of the pandemic, a lot more is known about it now. This allows us to better balance the twin imperatives of containing the virus on the one hand and ensuring continued economic activity on the other. We must all adapt to this new normal.
In some ways, this new normal has had beneficial consequences. It has forced the adoption of many new work practices. Working from home has been normalised for most knowledge workers. Offices where the physical presence of staff remains necessary are devising means to improve efficiency so that work can be carried out even by a skeletal staff. Innovative technology driven solutions have been adopted to solve logistical problems. Consumers have become more familiar with using online platforms for day-to-day activities, whether in accessing financial services or for shopping.
Such changes can potentially transform how economies operate even after this pandemic is a thing of the past. If our institutions are agile and adapt quickly, we will see gains in productivity resulting from these changes.
I therefore strongly encourage the development of new business models, adoption of new technologies and platforms, and improvement of infrastructure needed to support this productivity enhancing transformation. Investment is also needed in human resource development to enable our workers to make the most of these changes.
It must be admitted, however, that some government institutions may lag behind in this regard at the moment. This is due to legacy problems including lack of infrastructure, process engineering, and training. Changing this is one of my key priorities.
The very recent establishment of a separate Ministry of Technology under my direct purview is an important step in our overall drive towards digitization. Fostering the creation of a “Technology Based Society” that improves services available to citizens whilst enabling our industries to compete globally is a key pillar of the vision I articulated before my election as President.
By converging four prominent technologies—social, mobile, analytics, and cloud—we have the potential to transform the way governance works. The recent introduction of the Staysafe.gov.lk website to ease COVID19 contact tracing is a case in point.
More broadly, the fostering of citizen-centric digital governance will ensure that services such as obtaining National Identity Cards, Passports, Birth Certificates, Death Certificates, Driving Licenses, Land Deeds etc., is made faster and more convenient to the public.
The digitisation of the National Persons’ Registry in particular will enable a more streamlined and secure process for identity verification. This will in turn build the foundation for improved online service delivery in many other areas, including financial services and ecommerce. It will also greatly enhance the Government’s ability to effectively widen the tax base, which will be one of the key factors in improving our fiscal position.
A significant issue in Sri Lanka’s current economic context is the extremely high debt burden we are faced with. The large volume of pending debt repayments is a matter of concern. It is important to stress, however, that Sri Lanka has always met its debt obligations on time and in full, and that we will continue to do so.
Nevertheless, our overreliance on loans must come to an end. That is why the focus of the Government is on fostering investments. We must attract more Foreign Direct Investment and encourage more local investment to drive our economic growth. With this in view, the Government is bringing in new laws to fully protect investments. We are also committed to enhancing the ease of doing business in Sri Lanka so that returns on investment can be generated faster.
In this context, I must also note there have been several instances of projects, including some funded by foreign Governments, that have stalled due to various reasons. Such delays are deeply problematic because they inhibit the benefits of these projects from reaching the people. They also create a negative picture about the way the country operates.
The Government is keen on addressing such problems that discourage investors. I note with interest that our closest friend and partner India is in the process of setting up a digital unified single window clearance system so that access to regulators, policymakers and facilitators will all be available at one point for investors.
Such mechanisms improve the speed and ease of doing business. They also enhance transparency and reduce corruption. Mechanisms to monitor project implementation and enable intervention when required are also important. Means of introducing these are being assessed.
The theme of this year’s Economic Summit—Roadmap for Take Off: Driving a People-Centric Economic Revival—is very appropriate for our present circumstances. Several key economic areas have been badly affected.
The worst hit has been Tourism, which usually contributes so much to our economy. Leaders in this industry together with the medical community must set out a plan to restart tourism as soon as possible. This plan must adhere to all health protocols and ensure tourists have an enjoyable stay in Sri Lanka while remaining isolated from the wider public. By imposing minimum lengths of stay and attracting high-spending tourists, it should maximise earnings from tourism so that the economy benefits overall.
Especially since the number of tourist arrivals may need to be limited early on, we should first reopen to the highest spending tourists we can attract. This can also reposition Sri Lanka as a destination for higher end tourists, resulting in higher revenue generated by the industry in the long term.
Despite its overall negative impact on the economy, the current situation has nonetheless provided an impetus for improvements in certain sectors including manufacturing. Increased global demand for Personal Protective Equipment has encouraged many of our strong, well established companies in the apparels sector to pivot to manufacturing these products.
I am in fact glad to note that Sri Lanka’s export revenue in 2020 overall has fared considerably better than the ongoing pandemic would have initially led us to anticipate. This is largely due to such commendable efforts by our private sector.
We must also understand that the disruption of global value chains and supply chains, and constraints on traditional manufacturing hubs, create space for countries like Sri Lanka to innovate, produce new things, and enter new markets.
Our rising entrepreneurs as well as established companies must seek out new opportunities, moving beyond their comfort zones to explore new ways to deploy their talent and capital. Instead of relying on our geostrategic position and traditional industries alone, we must seek new frontiers for our resources.
Many companies in Sri Lanka have proven their ability to tackle complex manufacturing in some industries. Their capital, management expertise, and well-trained, experienced human resources should be deployed in new areas.
With the Government as an enabler, the private sector must expand its role in the economy. It has often been pointed out that the private sector is the engine of growth. However, for the private sector to truly live up to this reputation, it must make bold investments that can potentially realise outstanding returns, instead of continually adopting conservative, low-risk strategies.
The Government will play its part to unleash the full potential of the private sector so that the interests of our people will be best served. The Budget for 2021 contains a range of initiatives designed with this in mind.
The Agriculture, Fisheries and Poultry sectors will be exempted from income tax for the next five years. Improving productivity and enhancing earnings from these sectors is critical. The private sector must introduce new technologies that enable farmers to produce more, and to target lucrative new export markets.
Encouraging wider adoption of organic farming and traceability mechanisms will help increase the price of our produce internationally. Finding new markets and investing in better processing, storage, packaging, and transportation is important, together with increasing value addition through agricultural product processing.
Tax concessions will be granted for strategic investments larger than ten million US dollars in value for agricultural product processing, IT, dairy, fabric, tourism and export industries. Exports are being strongly encouraged through the removal of import taxes on required raw materials, machinery, and equipment used by direct and indirect exporters.
New investment into digital infrastructure is being strongly encouraged. Companies in the Information Technology space must make full use of these incentives to expand and seek new markets for Sri Lankan talent. Companies must also invest more in IT education and training.
Given the fast-changing nature of the industry and its high earnings potential, companies can gain enormous returns by training large numbers of young people in this field themselves, without over-relying on Government funded institutions for new recruits.
Vocational and technical education in general can benefit from much greater private sector investment, for which the Budget also provides incentives. The forced migration of education to digital platforms has shown that there are opportunities to be exploited in online education too. This is an area to which more attention can be paid by established companies as well as by Start Ups and individual entrepreneurs.
Small and Medium Enterprises and Start Ups are being encouraged through concessionary funding schemes and the establishment of a stronger Development Bank that should lend based on assessments of project viability instead of collateral.
Nascent domestic industries will be supported through cess that will be selectively imposed. Other initiatives including simplifying Customs Duty and related streamlining will facilitate functional economic improvements. A range of capital market incentives are also being introduced to encourage investment.
Setting the platform for a robust economic revival requires both the public sector and the private sector to work in partnership. We must ensure that all our initiatives in various sectors are guided by a shared central vision and driven by clear objectives and actionable plans. All initiatives undertaken by both the public and the private sector must contribute to uplifting our growth trajectory.
In this context, I am aware that the Ceylon Chamber of Commerce has prepared an Economic Acceleration Framework with the participation of over 70 industry professionals for the consideration of the Government. I appreciate this initiative and look forward to perusing this document. Value generating proposals will certainly receive the Government’s serious attention.
I trust that over these two days, the speakers, panellists and the leading luminaries from the public and the private sector participating in this Summit will give considered thought to innovative ways and means of fostering a truly people-centric economic revival.
Together, we have the opportunity to make a transformative and beneficial difference to Sri Lanka’s future.
In concluding these remarks, I wish to reassure you of my great and sincere confidence that together, we shall.
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Unlimited music streaming platform in Sri Lanka
SLT-Mobitel, the nation’s ICT and Telecommunications Service Provider recently partnered with Spotify, to mark their launch in Sri Lanka. Spotify is a paid premium music streaming app which allows subscribers to listen to music to their hearts content. Both, SLT-Mobitel Post-Paid and Pre-Paid customers will now be able to enjoy Spotify by activating a monthly recurring subscription or one-time subscription plan and access unlimited music streaming and downloading facilities.
The subscription charges will get added to the user’s customary billing, where payment will be deducted in real time. Starting from the payment date, the user will be able to access Spotify and download their favourite songs, for the next 30 days. Users who sign up for their first monthly subscription will receive an additional one month, courtesy of Spotify. The one-month subscription plan is not applicable with one-time subscription plans. SLT-Mobitel data rates, depending on the user’s respective broadband charges, will apply.
Spotify also has some exciting features that will provide SLT-Mobitel customers with the opportunity to listen to ad-free music, access millions of uninterrupted music under one platform, play any song they like, anywhere they go, and also be able to enjoy their music offline.
SLT-Mobitel customers can select their preferred premium package under four categories; Individual, Duo, Family, Student. Each category has recurring and non-recurring plans. After one month of free streaming, the package will activate once the offer period terminates. While both, the Individual and Student premiums are limited to one account user, the Duo package offers two accounts and the Family premium is accessible through six accounts. To view Spotify plans, users can log on to https://spoti.fi/3aLWvce
Sri Lanka using ‘sovereign power’ over economy: CB Governor
by Sanath Nanayakkare
Anyone conversant with the elements of a political economy would know that Sri Lanka is using its ‘sovereign power’ to manage the different dynamics of the economy in a sustainable manner, Professor W. D Lakshman Governor of the Central Bank said on Wednesday.
“Some critics are saying that we adopt a so-called modern monetary theory. That’s not the case. In fact, Sri Lanka is using its sovereign power in a number of economic aspects to honour its external debt repayment commitments as well as to reduce its debt burden in the medium term as well as achieve resilient growth in the medium to long term, he said.
“We make policy decisions to boost our gross foreign reserves, meet our external debt servicing, to facilitate monetary expansion, to boost our GDP growth, to strengthen our current account balance and manage our domestic and external economic variables in a sustainable manner. This is not a modern monetary theory. This is an age-old tool used by central banks around the world when the circumstances demand it, he said.
“Certain trade-offs will be necessary when dealing with an economy which has a big fiscal gap to bridge. There are efforts to push Sri Lanka towards the IMF again which would in turn have influence on our policymaking. We have taken policy measures to stabilize the economy and we have adequate reserve levels to meet our debt repayments. Meanwhile, we are in negotiations with overseas central banks and multilateral agencies to further boost our reserve level and it would materialise within a matter of weeks,” he noted.
“One of the tools the Central Bank has introduced is in respect of repatriation of export proceeds into Sri Lanka and conversion of such proceeds into Sri Lankan rupees in order to strengthen the foreign exchange situation of the country,” he said.
The Governor made these remarks while delivering the keynote speech at a webinar organised by the Veemansa Initiative led by its Managing Director Luxman Siriwardene – the former Executive Director of Pathfinder Foundation.
The webinar revolved round the topic ‘External debt situation in Sri Lanka: Are we heading for a resolution or crisis?’
Professor Sirimal Abeyratne, Prof. Sumanasiri Liyanage, Dr. Nishan de Mel and Dr. Ravi Liyanage were the other speakers on the panel.
CSE on the rebound; indices close positive
By Hiran H.Senewiratne
CSE produced signs of a rebound yesterday with both indices closing positive, though turnover remained low. Central Bank Governor W.D Lakshman’s recent statement on managing foreign reserves gave some boost to the market yesterday, stock market analysts said.
The index experienced a zigzag movement within the early hours of trading; thereafter, it recorded a slight up-trend as it reached its intraday high of 7,439. Later, the market witnessed a down-trend at mid-day, followed by a sideways movement and closed at 7,372, gaining 43 points during the month of February, market sources said.
It is said the banking sector dominated turnover with a contribution of considerable parcel trades in Sampath Bank, Commercial Bank and HNB.
Further, the Commercial Bank’s impressive quarterly results during the recent turbulent period also built investor confidence. Commercial Bank was able to register a18 percent net interest income when other banks were reporting a decline. Its share price increased by Rs. 3 or 3.5 percent. On the previous day, its shares started trading at Rs. 85 and at the end of the day they moved up to Rs. 88. Due to the positive growth results, the bank announced a Rs. 4.40 dividend per share, plus a Rs. 2 script divergent for every share.
Further, Sampath Bank shares also appreciated in both crossing and retail. In crossings its shares appreciated by Rs. 1.At the end of the day they moved up to Rs. 154.50. In the retail market, its shares moved up by Rs. 2 or 1.3 percent. Previously, its shares fetched Rs. 154 and at the end of yesterday they moved up to Rs. 156.
Amid those developments, both indices moved upwards. The All Share Price Index went up by 104.48 points and S and P SL20 rose by 67.78 points. Turnover stood at Rs. 3 billion with four crossings. Those crossings were reported in Sampath Bank, where 3.9 million shares crossed for Rs. 602.2 million, its share price being Rs. 154.50, HNB 375,000 shares crossed for Rs. 39.4 million, its shares traded at Rs. 105, Pan Asia Power 9.5 million shares crossed for Rs. 33.2 million, its shares traded at Rs. 3.50 and Access Engineering 1.2 million shares crossed for Rs. 28.2 million; its shares traded at Rs. 24.
In the retail market top five companies that mainly contributed to the turnover were, Expolanka Rs. 450 million (10 million shares traded), JKH Rs. 205 million (1.3 million shares traded), Browns Investments Rs. 199 million (34.9 million shares traded), Sampath Bank Rs. 191 million (1.2 million shares traded) and Dipped Products Rs. 137.7 million (2.8 million shares traded). During the day 101 million share volumes changed hands in 18046 transactions.
During the day, Expolanka, the biggest contributor to the turnover, saw its share price appreciating by Rs. 6.20 or 15 percent. Its share price quoted on the previous day was Rs. 41 and at the end of trading yesterday it moved up to Rs. 47.
Sri Lanka’s rupee quoted wider at 193.50/195.50 levels to the US dollar in the spot next market on Thursday while bond yields remained unchanged, dealers said. The rupee last closed in the spot market at 194.50/195.00 to the dollar on Wednesday.