The Employers' Federation of Ceylon

Home EFC News Private sector told to end reliance on protectionism
Private sector told to end reliance on protectionism PDF Print E-mail
Thursday, 28 November 2019 00:00

Shah says local firms failed to become global corporates due to protectionist measures and non-competitiveness 
Stresses competition in the future will come from unexpected players, driven by technology 
Notes there will be more emphasis on data in the future
 
 
Sri Lanka’s private sector was told last week to redefine its business model which is heavily reliant on protectionism, and to make the transition towards sustainable and competitive enterprises, attracting employees from the unproductive to the productive industries in the private sector.

“In the past, the success in the private sector or the majority in the private sector have succeeded due to protectionism. Protection was defined as high import tariff and preventing foreign investment into our economy. This is how we have defined protection in the past.

However, if we continue to define protection in this form, we will not be able to compete in global markets, and we will not be able to create jobs for people to move out of agriculture, public service in order to accommodate the returning Sri Lankan expats,” Lion Brewery CEO Suresh Shah asserted.
He shared these views delivering the keynote speech at the Employers’ Symposium 2019, themed “An Agenda for Change” organised by the Employers’ Federation of Ceylon in Colombo last Friday.
Comparing leading global corporates such as Apple, Google and Amazon with Sri Lankan firms, he pointed out that local firms failed to become global corporates as they are depended on protectionist measures.

“How many of these organisations had the kind of protection that our private sector had? Nothing, they didn’t have any protection at all. How did they succeed? They succeeded because they were competitive, productive, aggressive, creative and innovative businesses.
“We fundamentally redefine protection as sustainability, to be sustainable enterprises. If not, we will not be sufficiently geared to meet the competitive challenges which the private sector needs to take on as we move forward,” he elaborated. 

By becoming sustainable and competitive enterprises moving away from protectionism, Shah believed that Sri Lankan private sector will be geared to create employment opportunities for Sri Lankans who are employed in agriculture, public services and for low-skilled and under-paid Sri Lankans expatriate workers.

“Around 27 percent of the population is in agriculture contributing 7 percent to the GDP. We cannot bump up the agriculture sector contribution to over 10 percent of GDP. Therefore, we still can’t have 27 percent of the population in agriculture contributing 10 percent of GDP. We need to bring it down to 15 percent or even 12 percent of our population. They need to be accommodated in some kind of productive and sustainable employment.

We have about 1.5 million in the public service including 300,000 in security forces. However, the requirement for the country is estimated at 600,000. We need to cut down 1.2 million to 600,000. We need to accommodate them in productive, sustainable employment. That will only come with investments in to our economy,” he said.

Shah also emphasised that competition in the future will come from unexpected players, driven by technology. Hence, he urged Sri Lanka’s private sector to be prepared for such surprises.
“Competition comes from most surprising places. It will come from some place, which would completely take us by surprise.

“In the Sri Lankan context, there is this well reputed fast food chain that has lost about 30-40 percent of its revenue very recently. The competition has come from Ubereats.
Therefore, the competition comes from sources that we cannot simply anticipate at this moment,” he illustrated.

Moving forward, Shah was optimistic that more Sri Lankan females would join the labour force bringing diversity to many workplaces in Sri Lanka. Thus, he urged the private sector focus on corporate infrastructure to welcome an uptick in female labour force participation.

“Is our corporate infrastructure sufficient to accommodate and welcome the gender balance that we will see in the future? That’s something we all in the private sector need to consider. This is a change that will happen and this is a change that we must welcome,” he stressed.

He also outlined that the patterns of globalisations has been sifting during past several years towards data and developing economics.“Going forward, the patterns of globalisation will change. We always thought globalisation in the form of goods and services. We also thought of globalisation in the forms of big Western companies entering this part of the world. Both these patterns will change.

Moving forward, the emphasis will be more on data. For an example, from 2005-2017, cross border bandwidth has increased 148 times to 700 terabytes per second today. This will not replace the good and services trade, but will be an addition to goods and services, trade,” he added.

scroll back to top
Last Updated on Wednesday, 04 December 2019 09:37
 
Banner