The Big Issue Sri Lanka Magazine


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December - January 2014 Vol.2 No.10

The Big Issue Sri lanka Magazine offers its readers a wide range of insightful reports, analysis, features and
entertainment that is aimed at informing and educating its readers.

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The Big Issue Sri Lanka Magazine

  1. 1. December - January 2014 Vol.2 No.10 Reclaiming the skyline : Colombo’s luxury real estate Sri Lanka travel shines in London, Beijing Taking the Lead in Alternative Medicine with Prof. Janitha Liyanaga
  2. 2. Disclaimer The Big Issue Sri lanka Magazine offers its readers a wide range of insightful reports, analysis, features and entertainment that is aimed at informing and educating its readers. No part of the publication may be reproduced in part or full without the written permission of its management. The material in this publication which includes opinion and views of our contributors may not necessarily reflect the views of the management. We are also not responsible for any loss or damage caused to readers indirectly from this material. The Big Issue Sri Lanka, 14, Pepiliyana Road, Nugegoda, Sri Lanka., READ THE BIG ISSUE ONLINE -’ ContentsPage 05 Page20-21 Page 30 - 31 Page 40 Chairman Mr.SumithEkanayake Managing Director Mrs.AsankaEkanayeke Directors ThusithaNissanka RoshanMadawela Editorial RoshanMadawela T:0722741305 Nawaf Dilesha Layout Design T:2825666-0715555558 Printers T:2825666-0759555558 Circulation MohemadHilal Advertising ThusithaNissanka T:0752413626 Tourism the new golden egg for Sri Lanka, with caution The importance of Human Resource Management A Listing on the CSE: A Mark of Distinction Interview with Mr.V. Ganesh President of the Organization of Professional Associations (OPA) of Sri Lanka Migrant Birds of Sri Lanka 50Years Chinese ParkView Lodge The story of Michael KweiTing Hsu Page 50 Page 14
  3. 3. Editorial In the name of the most high A warning for environment oppressors Life does not always give you a second chance. Sometimes, one only has the option to watch and learn from the mistakes of others and not commit the same mistake yourself. Tourism offers a perfect example of exactly this predicament. We know that the phenomenon of package tourism and the massive volumes of seasonal travelers is one that is very recent in human history that has evolved in tangent with cheaper air travel. However, the consequences of having millions of visitors frequent beautiful locations around the world can either be economically beneficial to local communities or environmentally catastrophic, or both if you take a shallow concept of economic benefit to equate with profiteering ventures that plunder the environment for a quick gain. There is no long-term economic benefit in such myopic strategies, or the lack thereof, and future generations will have to pay, both economically and with the quality of life itself. In this issue of Sri Lanka’s favorite read, we take direct aim at ‘quick buck’ approaches to tourism that jeopardizes the environment of Sri Lanka that is so unique and delicately balanced. Moreover, dis-respecting the environment will its self ‘kill the gooses that lays the golden egg’ and will ‘cannibalize’ the very resources that are essential to the tourism industry’s success. The point is that as soon as the ‘virgin beaches’ and the ‘tranquil scenery’ turns putrid, the package tourist will turn on their heels faster than it takes for a tourist to travel from Colombo to Kandy along the congested A1. The message is one of adhering to the highest practices of sustainability, stricter application of environmental regulations and laws, enforcement of the Central Environment Authority legal compliances, vigilance against corruption in all these areas and the application of the rule of law for all offenders, regardless of their rank or political connections. As we embark on a new year filled with cautious promise amidst a slow global economic recovery, it is a good time for all like-minded folk who care about the quality of both the physical and social environment to work together and promote their common objectives in our global village. This year will also consolidate the BIG Issue’s position as the number one publication that covers both Sri Lanka and the diaspora as we have now opened up an office in London to distribute in the UK and 20 more countries around the world. With online global sales also reaching record levels, we believe that the Big Issue Sri Lanka can be a voice for all Sri Lankans both home and abroad. We wish all our readers, from the cyclist to the waste re-cyclist, the very best for 2014. Roshan Madawela Chief Editor
  4. 4. Tourism the new golden egg for Sri Lanka, with caution Now as the years have gone by the single traveller has been replaced by charter groups, flying in from anywhere, either East or West. That means the people arriving here are still digesting the food they ate in their respective countries and the food served on onboard the aero plane. Sitting on an ivory toilet in a marble bathroom is only the first part of the journey. The tourist flushes the toilet and for them it all disappears, so they can fill up again at the hotel buffet. The untreated effluence ends up directly in the Indian Ocean, hangs around the pristine coast and becomes part of the water in which the tourists, as well as the local people swim. The fishing fleets catch their fish in it and one day they too will disappear, and or be diseased and inedible. I have lived in Sri Lanka for many years, including the time of war, when there were absolutely no tourists visiting the island. When peace finally broke out , it took about a year before the tourists felt confidant enough to visit Serendip. Now the sector is growing exponentially, especially along the coast and to a The tourism sector, like so many countries seeing quick wealth, must not follow their example of throwing the gold dust to the wind and the dross to the waves. I have lived and travelled throughout the world long before there was anyone called a "tourist". One met only fellow travellers, adventurers or pilgrims, and nature, coastlines and people were as they had always been. The means of transport was by rail, or road, and if one had to cross large oceans to get to another shore, it was by passenger or freight ships, as flying was a prohibitive and expensive luxury only enjoyed by a few. The first area of this new tourism was the Spanish Meditteranean coast, followed by the rest of the Med, because Northern Europeans could reach these destinations easily by bus or train.They are, now known as the Spanish Gold Coast, after many years of misuse, has become a coast of cheap "bling" tourist factories, fast food outlets noisy bars, and has generally been degraded to a place where the obnoxious and lower classes congregate. A few years ago, I was invited to Mallorca, a beautiful island off Spain in the Med. There I joined my friends on a large yacht and we sailed around this most majestic island. We were about a half kilometre from the coastline and decided to snorkel under the sea to look at the fish swimming in the blue green waters. I put on my flippers and mask and looking through my goggles saw an entirely different world. There were no fish, but instead human excrement, hundreds of used condoms, plastic bags, shredding toilet paper and other detritus discharging directly into the sea from the tourist resorts. I doubt that the Meditteranean will ever recover. The same is now true of countries like Turkey, Egypt, Cyprus, Greece and all the other countries who have gone in for tourism, on the premise of making quick money. Knowledge 5
  5. 5. lesser degree in other parts of the Island . My question is: what is being done to clean or recycle the waste deposited by the large consumption of everything from these tourist ghettos? One does not have to travel far to see the result of taking a natural paradise, like the island of Bali or the country of Thailand and turning it into a cheap, dirty, down at heel area. Sri Lanka and the hotels that service the large influx of tourists could end up like so many other places who have sought the tourist dollar. Do you wish to kill the goose who lays the golden eggs, or will you follow the Buddha way and take the middle path? Tourists are coming to this country because of its fantastic nature and pristine coastlines. If you foul the sea and concrete over the sublime natural attributes what is left? Tourists are fickle and will leave as quickly as they came. “Sri - Lanka is a God - Given Paradise. Please keep it that way” From my own experiences, and first hand witnessing of the march of tourism I believe that if nothing precautionary is done to curb the discharge of waste, human or otherwise , the country will lose its unique ambience and end up like all the other third rate destinations in the world, where tourists have come, enjoyed and left. If the path to folly is continued unchecked, Sri Lanka will have a growth in the industry for the next ten years, whereupon it will level off and after a short period go into a decline, ending up as a down-market destination, and the end of a golden dream. I myself am the local Manager for "Ninas Pathways" a tour company from Australia who bring many tourists to Sri Lanka each year. Part of our marketing is to make our clients fully aware of the fragile nature of the places we visit, and to respect it. What I have written is not a science fiction story but what I have observed with my own eyes as I have travelled the world in the past many decades. It is far better to be aware of the great mistakes other countries have made and guard against them before they happen here because of short-sightedness. Sri - Lanka is a God - Given Paradise. Please keep it that way. Prof. Dr. Feelgood, Senior Correspondent, Big Issue Sri Lanka. Knowledge 6
  6. 6. Staged annually at ExCeL – London, WTM , a vibrant must-attend business-to-business event, was held in London in November 2013. Presenting a diverse range of destinations and industry sectors an estimated 47,776 global travel professionals were present at this event and some £1,859 million of travel industry deals were made. The Sri Lankan stand was one of the brightest and busies, hosting dancers, tea drinking stalls and hosting dozens of local tour operators on site. EXCLUSIVE : U.K, Europe, still the key Hiran Cooray, Chairman, Jetwing Hotels As far as we are concerned, the U.K and the rest of Europe is still the most important market for inbound tourists into Sri Lanka and this will remain the case well in to the future. Visitors from Europe are particularly drawn by the unique facets of the island that include golden sandy beaches that are un-paralleled in terms of their beauty, nature that is blissfully reinvigorating for the soul, and of course Sri Lanka’s many heritage sites that offers a glimpse in to the rich history of the island’s past. A history that once led the world in terms of architecture along with social and economic infrastructure. With so much to see and do, the typical European visitor tends to spend less time in the Capital Colombo and more time exploring the island, enjoying nature or simply relaxing at the beach. By contrast, non-European visitors tend to spend more time in the Capital and less time traveling the island. Up to September this year, there have been over 90,000 inbound tourists from the UK alone. This figure can easily reach 200,000 visitors from the UK per annum. When we include the other large markets of Germany and France, these three markets are easily capable of generating half a million tourists for Sri Lanka. To fully realize the potential of these markets, the Sri Lanka Tourism Board needs to keep up the good work and build on branding the island in this part of the world. Jet Wings contribution to the industry includes 12 operational hotels with another hotel due to be opened in Jaffna very soon. The latter will support the strong growth in tourist interest in the north that will continue into the future. Jet Wing also operates a budget brand that aims to meet the needs of lower- income tourists, including backpackers and also the local tourists. Our future plans include building a further five hotels that will further strengthen our brand as one that strives for excellence in the industry. THE WORLD OF TRAVEL Knowledge 7
  7. 7. Mr. Nishantha Wickremasinghe, Chairman of Sri Lanka Airlines, takes a few moments from his busy schedule at the World Travel Mart in London to give an exclusive interview to the Big Issue Sri Lanka magazine. Can you give an update on recent development at Sri Lankan Airlines? Since the end of the conflict, we have had a massive surge in the flow of air traffic to and from Sri Lanka. As a result of this increase in air traffic over the past few years, seats on our flights are nearly always fully booked. Leading this growth has been a revival in inbound tourism to the island. This is not something that we should be surprised about. When we consider that Sri Lanka has so much to offer its visitors in terms of the beaches, nature, culture and the richness of historic sites, we can certainly expect a continual growth in this sector over the coming years. Accordingly, SriLankan is in a more advantageous position to meet this growing demand. For that the Airline has entered in to multifaceted investments such as purchasing new aircraft, cabin refurbishment of the existing fleet and the installation of latest on-board entertainment technology; thereby giving our passengers a greater freedom to enjoying our warmth and hospitality. How important is Europe in terms of tourism for Sri Lanka? Europe can be considered as the largest markets for us especially destinations like Germany ,France and the United Kingdom. Both of these sources of inbound tourism are expected to grow strongly over the next few years. Currently, we have two flights per day from the U.K, four weekly flights from France and five flights a week from Germany. How about the diaspora? Do they contribute significantly? Yes. Since the end of the war, we can note a sharp increase in the number of Sri Lankans who have made their home in countries around the world making their way back to the island for various purposes. These include business and leisure travellers while some have looked to re-settle in the island that now enjoys peace. We have met the growing demand form the diaspora by increasing the number of connecting flights from destinations like Canada. What are the main challenges faced as the Chairman of the national carrier? Formally, I was in the tea industry before entering the travel business. First of all, I must stress that this industry is a lot more challenging. It demands all your time and energy and requires a lot of passion. Sometimes, I feel like I am working 24 hours a day. However, it is also rewarding and rich in job satisfaction. I am currently enjoying the challenge. Who is your number one inspiration? That’s an easy question. It is our President, H.E Mahinda Rajapaksa. He is my inspiration because he does not fear anyone when he knows that he is doing the right thing. He gave us peace. FLYING WITH A SMILE Business 8
  8. 8. Lake Serenity Boutique Hotel of Ratnapura in Sri Lanka has been selected as the winner of the 2013 sustainability award that was organized by the World Boutique Hotel Awards in London. It is truly an honor for the hospitality business model – Lake Serenity -to be recognized at such a prestigious ceremony and it is proud to have been involved in the Sri Lanka Tourism Industry. This is the highest honor for best boutique hotels of the world selected under several categories. Lake Serenity is the newly created ecstasy by Sri Lanka’s RTS Holdings as its second successive eco – friendly Boutique Hotel and is located in Ratnapura, the capital town of Sabaragamuwa province of Sri Lanka. The city of Ratnapura is popularly known as Sri Lanka’s “Crown of Gems”. Ratnapura is located in a setting surrounded by thousands of Gem mines and it is known for both its historic and cultural importance. Ratnapurahas also been known as “Ruwanpuraya, Minipuraya, Menikpuraya, all denoting ‘City of Gems “due to its abundance of much sought-after gems in its soils. People of Ratnapura are said to be very pleasant, hospitable, and leading a simple lifestyle.There is a saying among its residents that visitors to Ratnapura are reluctant to return back to their hometowns due to its most precious natural resource gems on one hand and due to the extreme hospitality and pleasantness of its people on the other. RATNAPURA HOTEL BAGS SUSTAINABILITY AWARD IN LONDON Just as the name explains itself, this beautiful Boutique Hotel known as ‘LAKE SERENITY” is the ideal Luxury boutique Hotel in Sri Lanka that is encircled by graceful paddy cultivations, tea plantations, rubber estates and loftymountains.Thesurroundings of the Hotel provide the true feelings of nature to each and every guest, to breathe with fresh air and relax their body and mind. Some of the attractions located in close proximity to the Hotel are the Udawalawa National Park, Adam’s peak, water falls, tea factories, gem mines, Sinharaja rain forest, elephant orphanage, Vaulpane natural caves, and Saman Devalaya, to name but a few. The Lake Serenity offers guests the ultimate in accommodation with opulently appointed garden suites furnished in t y p i c a l l y designed Sri Lankan tradition with private b a l c o n i e s edging the tea terraces. The hotel has fourteen suites provided with aircondition,hot and cold water, m i n i - b a r s , safe lockers, TV, IDD and other facilities needed by guests. The hotel also has an outdoor swimming pool, kiddies pool; kiddies play area, Jacuzzi, and a pool bar while activities such as nature walks, bird watching, peddling and rowing boats will surely mesmerize guests with a heartwarming experience. There, any visitor will be able to watch more than 62 birds’ species on trees in the hotel garden. More than 20 fresh water varieties of fish can be seen freely moving in the lake while Black Swan and Mendarine Ducks in the lake add to the beauty of the Hotel. RTS Holdings having its nine subsidiaries is owned by top businessman Lalith Liyanage who is also the Chairman of Lake Serenity Boutique Hotel Pvt Ltd. Mr Liyanage personally received the Bouitique Hotel Award in London from Mr Edward Gabbai, Director of World Boutique Hotel Awards – 2013 – Business 10
  9. 9. Enjoy the beauty of the English country side and visit fa- Watch a great football match and see amazing historic land- marks like the Stonehenge.  Air port pick-up and drop-off  Hotel accommodation for 7 nights. In 3-star style  Tailored to suit your taste  A Sri Lankan tour guide  Choice of cities to visit Prices from Rs.200,000 for seven tour and air fare!!!
  10. 10. 1. As the 33rd president of the OPA, can you kindly highlight the main achievements of your organization since 1975 In 1975 the OPA was established with ten professional bodies mooting the idea of a joint professional body to cater to the country’s growing need of professional opinion. Since the Commonwealth conference was held in Sri Lanka this year and HE our President has taken overastheHeadof theCommonwealth countries it is appropriate to mention that the formation of OPA, Sri Lanka was under the aegis of the Commonwealth foundation based in UK. The Commonwealth foundation providedthefundsfortheOPAbuilding. The foundation is an intergovernmental Organization established by the Commonwealth Heads of Government in 1965 in order to have a joint voice in areas of economics, politics and policy. Since then OPA has grown over the years to be having a membership of 44 professional Associations as at now and through them a membership of over 50,000 professionals. OPA holds regular seminars and lectures for members and the public creating awareness of good governance and for the development of the country. The various committees on the other hand work on various areas covering national issues. Thus the OPA today stands as a very important institution which brings together various professionals from a range of sectors. OPA carries out regular dialog with the Government and the opposition parties to ensure good governance, media freedom right to information and constitutional matters. In fact the 17th amendment to the country’s constitution was the brain child of the OPA and to date OPA regrets the replacement of the 17th amendment with the 18th amendment. OPA organizes annual conference on numerous subjects of importance to theNationandtheoutcomeissubmitted to the Government and other decision makers. We have had 26 such annual conferences and as the President Elect I was responsible for organizing the 26th conference in October 2013 Interview with Mr. V. Ganesh President of the Organization of Professional Associations (OPA) of Sri Lanka under the theme “Human Capital Towards 2020”. Also for the first time OPA organized a “National Apex Awards” for the professionals and ten such awards were presented to outstanding professionals for their contribution both to their professions and to the Nation. We have put up a three storied building which we have given on rent to LB Finance which is the main source of our income. We also have a well equipped Auditorium, Meeting Rooms and an up to date Kitchen and Restaurant to cater to our members 2. Being the president of ISMM from 2002-2005 and as a member of the Ex-Co & Forum since 2001 what were your contributions to the OPA. In response to your question I must state that I am satisfied that I have taken ISMM to greater heights. During my term a long term strategy was formulated. We tied up with WTO in Geneva to commence a three stage “International Diploma in Supply Chain Management SCM on the Modular Learning System (MLS). We also commenced a Certified Supplies Manager Course in Sinhala medium. We gave Scholarship to University Graduates to follow our Professional three year Diploma Course. Some of them have reached the top in supply Chain as Company Directors. As regards OPA, I have been an active member of several committees and as Chairman Publicity Committee in 2006. I commenced a weekly page on Thursdays in the Daily News Paper as the “Daily News – OPA at your Service” , answering questions from the public on professional matters and other areas where the Public needed assistance” It turned out to be not only Q & A but assisting the public to solve their problems. This I continued up to 2011 at which stage I had to give up due to work pressure. This service was extended to the “Dinamina” and the “Thinakaran for almost a year or two. 3. What are the key areas in focus to develop in your tenure of office: During my tenure of office I intend to focus on “Career Guidance, Skills Development and Human Resources Development” as it is a dire need in the country to direct our school leavers and those who are not successful in entering the Universities. Also my efforts will be to establish Branches of the OPA in the Provinces. At least to start with in the South, East, North and North Central. It has been a crying need to bring the professionals together in the Provinces so that we can serve the society where assistance is needed most in the development of the people and the economy. Other than these two I do not wish to undertake anything major now but to consolidate what has been done so far by my predecessors. I am very keen to give a face lift to the OPA Building. 4. What do you think of the unique challengesfacedbyyourmembership (Professionals) and what are your proposals to overcome them? The challenge that our membership is faced with is the internationalization which means, the country will open itself to professionals from other countries seeking employment in Sri Lanka for which our professionals should have continuous professional development (CPD) and gear themselves. Also we must ensure level playing field and not allow any deviation from the requirements set for the practice of any profession in Sri Lanka. The other challenge is to raise our performance levelsinlinewiththerapiddevelopment that is taking place in Sri Lanka post the end of the armed conflict that has taken the country backwards. 5. Tell us your other involvements? My other involvements have been with sports, especially Hockey and after serving Hockey at Mercantile and National level for over 30 years, I have taken a back seat. However I continue as the trustee for the Mercantile Hockey Association. My other interest is in free masonry where I have been involved for over 20 years it has helped me immensely to be what I am today. Mr. Ganesh is a fellow of the Institute of Supply & Materials Management (ISMM) and currently serves as the CEO of the Nawaloka Group of companies. He has been a member of the OPA Ex-Co & forum since 2001 and has served as a Vice President for over Four years, since 2007. He was the president of the ISMM from 2002 to 2005 and has represented ISMM at several International seminars & conferences of the International Federation of Purchasing & Supply Management (IFPSM).Mr. Ganesh worked at Unilever Ceylon Ltd. for Thirty Three years and ended his carrier as the Chief Buyer and Head of Logistics. He has been the Leader of several Regional Buying Teams and Global Buying Teams of Unilever worldwide. After his retirement from Unilever Ceylon Ltd. he served as General Manager of Amico Industries before joining the Nawaloka Group of Companies in it's CEO. Mr. Ganesh, a public schools athlete and a sportsman has served as the Vice President of the Mercantile Hockey Association and as Senior Vice President of the Sri Lankan Hockey Federation. Leisure 14
  11. 11. DFCC Vardhana Bank is rated AA-(lka) by Fitch Ratings Lanka. DFCC Vardhana Bank is a licensed commercial bank supervised by the Central Bank of Sri Lanka
  12. 12. After over 25 years of travel across continents, I now dread air travel, security checks, airports and hotels. A business class seat can be nice but you are still in the air for hours especially over the Pacific Ocean and you still have to go through the mess at most major airports….. A few months ago I arrived at Melbourne’s Tullamarine Airport. The immigration officer stamped my passport and said with a smile: “Welcome to Melbourne and Australia Sir”. I had just left Sri Lanka and Colombo with all it’s chaos on the streets where a dividingwhitelineonaroadmakes no difference! People, especially buses and three wheelers, drive and stop wherever they please till you honk and get them out of your way! They are a law unto themselves! Most often the police just stand and watch! I was picked up at the Melbourne airport and immediately saw the difference law and order and basic decency and courtesy makes! This was the first world with it’s own set of challenges. A month later, I arrived in Kuala Lumpur, enroute to Colombo. It was not Australia, but the immigration lady responded with a smile when I greeted her in Bahasa Malaysia and welcomed me to her country. There was a good degree of law and order on the streets. Malaysians are very hospitable people. This was the second world! Malaysia has it’s own challenges. A week later I arrived at Katunayake Airport! There was no welcome or smile on the face of the immigration officer. I asked him why he did not smile. He told me that he was tired and sleepy! As I came out of the airport, I knew I was back in the third world! Ceylon used to be known for world class hospitality. What has gone wrong in Sri Lanka today? Recently, the nation, especially Colombo, was totally focused on CHOGM, the Commonwealth Heads of Government Meeting. Prince Charles represented the Queen. Late in the morning on the Friday before CHOGM, I was at a bank on Independence Avenue. As I turned into the bank parking area, I saw the street with school children rehearsing for the CHOGM events. They were waiting for the music to begin. I walked up to some young school girls and asked them in Sinhala where they were from. They were very shy but replied, “Tissamaharama”. I asked them what they were doing in Colombo. They replied: “CHOGM”. I asked them what CHOGM meant. They did not know! The one word that is now on the lips of almost everyone in Sri Lanka today is CHOGM! A new word has entered the vocabulary in Sri Lanka! The member countries that attended were once ruled by Great Britain. Winston Churchill once said: “The sun will never set on the British Empire”. It did! A shadow was cast over all the excitement in Colombo by the absence of Manmohan Singh, the Prime Minister of Great Britain’s largest colony, India and the stated “mission” in Colombo of the Prime Minister of Great Britain itself David Cameron. And Channel Four! For the sake of Sri Lanka, I hope CHOGM was a success. I was having a discussion in a hotel lobby with a Sri Lankan colleague recently. A gorgeous young lady in a gorgeous sari and a curvaceous figure walked by. As ‘normal” men, we both glanced at her. My friend, in jest, asked me if I would like to have her. I replied: “I would like to but I am a married man”. I then looked at him and continued: “If I did have her, what would happen to me and her the morning after?”. He laughed. To my Christian male friends, looking and admiring the beauty of a woman is not a sin. It is REFLECTIONS: First,secondandthirdworld…and Business 16
  13. 13. what we do after looking and admiring, if we are married, that is a sin. A woman is the crowning creation of the Maker who saw that “it was not good for a man to be alone”. The Maker also saw that his creation “ was very good” (Genesis 1, 24 -31 and 2: 18-25). Now back to CHOGM, what really matters is what will Sri Lanka do the morning after, after all the excitement is over! If there are two things of utmost value in the new global economy that the British Empire gave a nation like Sri Lanka, it is the English language and universities that were once respected in the world. We appear to have lost both! Whether we like it or not, English is and always will be the language of global business and international relations. In Sri Lanka today the most common sign one sees in every town is “Spoken English Classes”. The principal of a leading school in Sri Lanka remarked to me after I had addressed 170 selected student leaders that this was perhaps their biggest challenge. They were graduating students by the thousands who had a very poor knowledge of the English language. Look at the state of our local universities today. Almost every building on Galle Road has a classroom delivering degrees, especially MBA degrees from a foreign university! There is a strong likelihood that in five years almost every other employee in the private sector will have an MBA degree. This was once a very coveted qualification for employment in business. There appears to be a growing indication that many are now even going after PhD’s being offered by so many schools, some reputed and some very questionable with virtually no globally recognized accreditationbyrespectedbodies. Many of the advertisements in Sri Lanka from organizations selling foreign degrees use the words “globally recognized and globally accredited”! Recognized and accredited by whom? The reader must understand that the most respected business schools in the world are those accredited by AACSB. Only 3% of the world’s business schools are accredited by AACSB. The right Education to compete in the new global economy and a mastery of the English language are two keys to getting from third world to the second and first. This must begin in our pre-schools and early childhood development centers. What is the sense in graduating future leaders from our schools and universities with a degree in any language other than English? We are crippling them for life! I have seen the result in my 20 years of teaching students and managers from all over the world as an adjunct professor of global business in MBA and Executive Education Programs in California. If there is one place on earth that the best and the brightest come to learn, it is the USA and yes, California. Let me be clear. A person must be proud of his or own native language. So much is written about human capital performance and productivity in the public service, the nation’s biggest employer. Two years ago, I spent three hours with Ministry Secretaries and Heads of Government Departments discussing leadership, change, capacity building and developing a world class public service. They were basically good people who wanted to make a difference. Many of them got very emotional and told me that morale was very low, that they were helpless and could do nothing except follow orders. With very few exceptions, they had little or no respect for their bosses and there was little or no trust. Respect and trust are the foundations of any society and any organization. How can you even begin to develop effective leaders, drive change and build the right capabilities if there is no trust and respect? Leadership must be by example. Something dramatic must be done. With very few exceptions, the private sector is no different. I hear the same thing from the youth that I address. As a result, so many of our best young people are migrating. In real sustained human and economic development, a rising tide must lift all the boats, not just a select few. Our young people must see a credible future. A recent global study published in the Sunday Times in Colombo revealed that Sri Lanka is listed among the 20 worst passports to have for visa-free travel. This is so sad. What must this nation do to change this? This also adversely impacts the nation’s “brand identity”. In conclusion, my organization is in the business of management consulting, corporate education and learning and development. We are engaged in numerous assignments globally, in Asia and Sri Lanka. As a result of our work, my global team and I see what makes a nation a third, second or first world country. Each has it’s own challenges. We see what makes an organization get on and stay on the list of most admired companies. It is all about people. What kind of people and future leaders is Sri Lanka producing? A nation like Sri Lanka must be “born again” from within. One first step is to remove two words from the Sri Lankan vocabulary: “Yakko Bugger”! Gerard D. Muttukumaru, Chairman, Center for Global Leadership Worldwide LLC (USA) and Adjunct Professor of Global Business, California. Business 17
  14. 14. Tea Surveillance The quantity of the tea arriving at the Colombo Auction this week 11 th December 2011 increased by 6.282 Mkgs to 7.326 Mkgs which traded in the previous week's auction, whilst the Ex-estate quantity increased from 1.170 Mkgs to 1.380 Mkgs. MARKET SEGMENTS: In the Ex-estate Category, Best western BOP/BOPFs were irregular. Below best BOP's declined by Rs.5-10 per kg, whilst BOPFs declined by Rs.15-20 per kg. Plainer BOP's were lower by Rs.5-10 per kg, whilst the BOPFs were lower by Rs.10-20 per kg. Nuwara Eliya BOP's were firm, whilst BOPF's were irregularly easier. Udapussellawa BOP's were irregular. BOPF's were lower by Rs.5-10 per kg. Uva BOP/ BOPF's were lower by Rs.10-20 per kg. Select best CTC's were firm to dearer, whilst best and below best met with a firm demand. Low Grown Leafy Market Segment: Select best BOPl's/OPl's were dearer, whilst the others met with firm demand. Select best OP/OPA's were firm at last levels. Others were dearer by Rs.5/- to Rs.10/- per Kg. Poorer types were firm. PEK/ PEKl's were fully firm overall. Russia and CIS concentrated more on the cleaner types, whilst Turkey and Syria followed the similar trend. Iraq and Libya maintained their buying patterns at last levels. In the Tippy Market Segment: Select best and best FBOP's/FFl's were firm, whilst the below best met with irregular demand. Teas at the bottoms were easier. Very tippy teas were firm to dearer, but deteriorated as the day progressed. An improved demand was witnessed. Buyers from Iran were very active, whilst the buyers from Dubai and CIS were moderate in their buying pattern. WEEKLY AVERAGE PRICE MOVEMENTS WESTERN HIGH GROWNS WESTERN MEDIUM GROWNS Best BOP/BOPF's wore irregular. Below best BOP's declined by Rs.5-10 per kg, whilst BOPF's declined by Rs.15-20 per kg. Best BOP/BOPF's wore irregular. Below best BOP's declined by Rs.5-10 per kg, whilst BOPF's declined by Rs.15-20 per kg. Business 18
  15. 15. NUWARA ELIYAS UVA / UDAPUSSELLAWAS CTC OFF GRADES: Liquoring best and the below best FGS/FGSl's were firm and poorer sorts were dearer by Rs.5-10 per kg. Low grown best and below best type FGS/ FGSl's were firm. Poorer sorts met with fair demand. Cleaner BM types were firm. Below best maintained at last week levels. Poorer sorts met with strong demand. Low grown BP's met with fair demand. Poorer BP's met with lower demand. Best BOP1 A's were irregularly lower. Below best and poorer sorts were lower by Rs.15-25 per kg. DUST: Select best D/DTs were dearer by Rs.10-20 per kg. Best and poorer sorts were irregularly strong by Rs.10-20 per kg. Low Grown best D/DTs were dearer by Rs.10-20 per kg. Below best had a strong demand. Poorer sorts were dearer by Rs.20- 30 per kg. CTC's remained firm as last week. Saucer : BARTLEET PRODUCE MARKETING Nuwara Eliya BOP's were firm, whilst BOPF's were irregularly easier. Select best CTC's were firm to dearer, whilst best and below best met with a firm demand. Udapussellawa BOP's were irregular. BOPF's were lower by Rs.5-10 per kg. Uva BOP/BOPF's were lower by Rs.10-20 per kg- Business 19
  16. 16. What is your take on the core concept of HRM ? Human resource management is now expected to cover all disciplines within the corporate world. Almost without exception, people anywhere in the world attribute success to their teams. When we consider the traditional measures of the human factor in terms of IQ, EQ and the more modern SQ, they all point to the same concept in its multifarious dimensions. A person – in totality his body, mind and spirit can present him/herself creatively in so many ways, that include vocal as well as body language. How does this concept fit into the Sri Lanka context? In Sri Lanka, there is only one HR manager for every 25,000 workers whilst the global average is around one HR manager per 100 workers. This represents a tremendous challenge that cuts through all segments of society and even the President has recognized the urgency of the situation. At the frontline of the problem, Sri Lanka has a large public sector that is for the most part un-productive. The importance of HumanResourceManagement “The traditional HRM concept has evolved from being confined to only HR operations to encompass the whole gamut of management – whether it be finance, administration, marketing, IT etc and indeed all trades, industry or occupations – banking, plantations, tourism, medical – whatever or wherever associated with people! And people need to be trained, developed & motivated to produce effectively in an environment of trust & harmony. The study and practice of Human Resources would no doubt make a paradigm shift in leading people and teams to realize their goals on a win-win platform! Human Resource Management (HRM)and by extension Human Resource Development is a vast, yet exciting discipline, applicable to the corporate world”, opines Dyan Seneviratne, CEO of the Institute of Personnel Management (IPM)the acknowledged National leader in ‘HR:’an institution that is working vigorously to promote the globally accepted practices of HR Development throughout the island. Knowledge 20
  17. 17. Public Sector = high labor unrest + low productivity Private Sector – low labor unrest + high productivity Challenge = Addressing the imbalance and making advances in both sectors There is also the testing task of getting University students to be more employable in the corporate world. Currently there is a high pool of unemployable youth. This is simply a product of the education system that has mostly failed to connect ‘education’ to the world of work. How big a role do language skills play? In Sri Lanka, we need to be Tri- Lingual and give all people equal opportunities. For this to happen, everyone should be made to learn each other’s l a n g u a g e and of course both the Singhalese and Tamils must learn to speak, write and think in English. If you take Singapore as an example, their leaders ensured that the language of administration was English. This served to bond the classes of people. The Indian middle-class is a good example of how much English has bonded these disparate groups of people. Didn’t we have 2011 named as the ‘Year of English’? Yet ironically in Parliament we can see that 95 percent of the deliberations take place in Sinhala. Political expediency is perhaps the root cause! What are the other urgent issues that are connected to the human resource factor? We need to be much more d i s c i p l i n e d throughout all segments of society. Political leadership is needed for this and they need to act as role- models. What is the history of the IPM? The Institute of Personnel Management (IPM) was incorporated by an Act of Parliament in 1976 and has grown to become an iconic institution in Sri Lanka. The institute runs programs for school leavers - for those in employment as well as those in between jobs. C u r r e n t l y the IPM has branches in all parts of the island and over 6,000 students at any given time. The IPM with its small beginnings in 1959 has developed into the leading Human Resource Authority in Sri Lanka. During this period, the institute has contributed significantly to develop and nurture the Human Resource Management profession. IPM is acknowledged as THE HR Institute in the country. In fact on 16thOctober 2013, IPM won the Silver Award for the SME Brand of the Year at the 12th SLIM Brand Excellence Awards, the most prestigious marketing awards ceremony in Sri Lanka, making IPM the only educational institute to be honored with an award for brand excellence. Dyan Seneviratne, CEO of the Institute of Personnel Management (IPM) Knowledge 21
  18. 18. WORLDWIDE •Flights •Holidays •Sports tours A 01, Olympic Way, Wembley, Middlesex, HA9 0NP T + 44 (0) 20 8166 5050 F + 44 (0) 20 8166 5100 E E Visit our website for more information Paradise Travel & Tours trade as Paradise Vacations and Paradise Sports Travel
  19. 19. Journey to the Wonder of Asia Mother Sri Lanka engages over 10,000 school children for the country’s journey to The Wonder of Asia status Mother Sri Lanka which is an initiative of the President’s Office rolled out its’ initiative of engaging the next generation of Sri Lankans to understand the value of Responsible Citizenship, Unity and National Pride through the aptly named Project RUN during the months of October 2012 - March 2013inover1300schoolscovering all 25 districts of the country. Each school that expressed willingness to participate were then guided to identify an issue that needed improvementintermsof theattitude and behavior of the community with respect to any of the above three themes Responsible Citizenship, Unity and National Pride and develop a project based around the theme. As of now, over 600 schools have started implementing their projects and now the movement is gathering momentum since the first round of evaluations of the success of the projects have started with the Western Province finals which were heldrecentlyatRoyalCollegeinthe distinguishedpresenceof Secretary to the President Lalith Weeratunga who took time off his busy schedule to be there to encourage and motivate the children on this unique effort. The best projects of the Western province were presented to a distinguished panel of judges consisting of Presidents office, Mother Sri Lanka and the Ministry of Education officials. The children had to prove the success of their projects by showing the status before and after the project with physical evidence through power point presentations made by the children themselves. The officials have also made site visits to each of the shortlisted projects before this presentation to verify the project status. The Chairperson of the Mother Sri Lanka Trust, Janaki Kuruppu who was also a judge at the presentations mentioned, that “the long term objective of Project RUN is to build the minds of the next generation of Sri Lankans to be ready to accept and protect our beloved motherland when it reaches the ‘Wonder of Asia” status. She went on to say that, “we have seen many countries who have developed in a material sense but have degenerated in values; we do not want our country and its’ people to end up in the same way. Mother Sri Lanka movement strongly believes that while the massive development work that is undertaken by the government will build a strong physical infrastructure in our country, it will not be complete if we do not build the mindsets of our people Knowledge 24
  20. 20. to be ready to be part of that new Sri Lanka while preserving and protecting the values that are unique to our culture. Hence, we started Project RUN. We were not sure how successful we will be, since many good concepts in the country get wiped out with weak implementation. With our minimum staff and the help from the Ministry of Education we have now reached the first round of evaluations. This is the first province that presented their projects; and I am thrilled at how we have been successful at building self confidence, team spirit, entrepreneurship and leadership among the children. We plan to finish all nine provinces by end of 2013 and continue the same program next year. Out of the over 125 successful project implementations in the Western Province the top 40 short listed schools presented their efforts on how they selected the project, how the team worked together, and specially the attitude and behavioral change that they were able to effect. Theprojectsrangedfrominculcating good hygiene, cleanliness to looking after school properties such as libraries, toilets and public properties such as bus stands, health centers, hospitals, water ways, streets etc and under unity many schools have started projects jointly with schools of different ethnic groups in their own area or in a different area of the country which lays a strong foundation for the post war ethnic harmony and reconciliation efforts. Some of the best projects in the Western Province were from Mathugama Kaburawala Maha Vidyalaya who restored the Badureliya central bus stand which demonstrated how even a set of students with limited resources can make a difference to make society a better place. “It was also an example of how people need to demonstrate responsibility to public property not only in school but also outside the school premises which changed the mind-set of not only the students but the people in the area” said Nethra a student from the project team. Another note worthy project was the one from Pinnawala Rajapola Maha Vidyalaya which focused their efforts on making the Medical Center in the area clean and pleasant for those who came for medical attention. “It gave a sense of responsibility about the sick, and also gave a sense of pride to us” said Lasantha a student from the group of Pinnawala Rajapola Maha Vidyalaya. A judge who officiated at the Western Province Competition commented that the initiatives of the students were very high and better than she expected and that it just showed that many youngsters are interested in community based projects if given an opportunity of being part of such programs. The opportunityprovidedbytheMother Sri Lanka Trust and the Presidents Office together with the Ministry of Education is commendable. The evaluations will be held in the rest of the provinces in the next two months and the finals will be held with the patronage of His Excellency the President Mahinda Rajapakse, who envisioned that post war, we must build a new Sri Lanka with a positive attitude and concern for the well being of all society. Mother Sri Lanka Trust is a unique effort implemented through a joint effort of the Private and Public Sectors and volunteers which is a classic example of a private public partnership that can make a difference in society. Knowledge 25
  21. 21. Now distributed throughout the U.K. - Hot Line : 0044 7463401869
  22. 22. What attributes does the ideal Leader or Director possess? Which ones are your strengths? Leaders need to have extraordinary stamina and great reserves of energy. Leaders have bold vision and aim to achieve great things, confidence that they can make a difference.A leader has to be willing to take responsibility, must have good judgment, more than just intelligence, be able to decide, a course of action, be able to motivate people to teach them to believe in themselves, needs to have good people skills and relationship with followers. A leader, I wish to say finally, should be a moral, or ethical, leader. Second part of your question is little difficult. However I wish to say it is not only one but all attributes. What in your career, whether purely academic or simply life experience, made you the best person to lead the GampahaWickremarachchi Ayurveda Institute (GWAI)? - You mentioned about life experience. That may be more appropriate. Though I am EXCLUSIVE : TakingtheLeadinAlternativeMedicine a professional academic, A Professor, Chartered Scientist and a Chartered Chemist, throughout my career further to discovering, transforming, preserving the knowledge,I was able to put the knowledge to work successfully. I am a practical person. My vision is “to be competent, to have thriving personal life, a successful professional career and to contribute the maximum as a change agent in progressive development.” Your academic background in Chemistry is a great fit for Biology department of the University… but what created your interest in Ayurveda specifically? The question is wonderful. Hope I can give you a justifiable answer. Ayurveda and allied health and medical sciences exist and continue over more than 5000 years. The Chemistry of Ayurvedha needs to be discovered, preserved and transformed. Now our doctors, BAMS graduates understand and redefine properties of matters ( Dravyaguna) in a different perspective. I believe this should be the door to open Ayurvedha medicine and treatment to the world. How can GWAI benefit from your academic researches? Are there any lessons you learned that are transferable to managing the community? It is not my all academic research that bring benefits to the GWAI. My specialized area is chemistry. There is no doubt that to identify the chemistry in Ayurveda practice is vital. Thus researches done by me collaboratively with veteran Ayurveda practitioners and scholars will bring benefits to this industry. How would you describe your leadership style? You will agree that a leader who has to work within a set frame and predefined limits needs to have more than one leadership style. Especially when leading an education institution belongs to the government the leader needs to be more flexible than fixing in to a particular style. However Ifeel my leadership style is more towards to transformational leadership as I always focus change, I need to redirect others thinking and I Knowledge 28
  23. 23. frequently challenge and inspire my team. What is your vision for GWAI? I foresee the GWAI as one of the forerunner higher education institutes in Ayurvedha and allied sciences which can contribute enormously in the endeavor of elevating Sri Lanka as the international education hub in South Asia. My vision is to be the change agent in creating a brilliant future for the institution, elevate the institution into the state of a university. At the end of your term what do youhopetohaveaccomplished? We have already submitted a proposal to uplift the institution to the state of a University. We have received green light from authorities concern. It is a long process. I wish to see a university name board infront of this historical education institution. What do you believe makes GWAI a “unique” institution? Ilikethisquestionastheanswer contains competitive advantages we have in this transformation process. After a careful analysis on local and global trends in the Ayurveda sector and allied sciences, especially in education, research and development, we identified immense opportunities and a unique space to establish a world-class university for the Ayrveda and allied sciences in Sri Lanka. This institution can be developed as one of the pioneer Universities for Ayurveda and allied sciences and can be placed among top ten universities in the global universities ranking in this sector. There is a lot of unique opportunities available. The growing interest and recognition foreco-friendlymedicaltreatment concepts and rising demand, both locally and internationally for Ayurveda, Indigenous and alternative medical treatments, products and services can be described as one of such unique opportunities. Is there anything that you believe GWAI needs to stop doing and what new initiatives do you want to start at GWAI? Yes. Not much. We are in a development journey. All stakeholders have appropriately geared into. They think in deferent perspective. They have now realized to upkeep and maintain the dignity of individual and the industry as a whole. At a time of fiscal restraint, how do you go about providing faculty and staff opportunities for professional development, or in other words how can you develop your people and, more importantly, motivate them, despite budget cuts and no raises for several years? I am proud to say publically that I never ever faced any financial difficulties or fiscal resistant in this development process including human resource development. Our academic staff is highly motivated and involved in their professional development. Most of the senior academic staff members have completed their doctoral studies and further enhancing their qualifications. I wasabletofindscholarshipgrants for the newly recruited staff too. Further I wish to state that I cannot seeafiscalrestraintasyouexplain and the government has given more opportunities to enhanced professional development of University academia. It is our responsibility to identify such opportunities and get benefits of self and the country. Mrs. Janitha Liyanage Knowledge 29
  24. 24. In the last article we recognized how the migrant birds come to Sri Lanka . In this Issue we will look at how they enter the country and dispersetotheirfeedinggrounds. Of the 494 birds recorded about 185 or 36% of the Sri Lankan avifauna are migrants. This is very high in comparison to Indian which has only 16% migrants. Sri Lanka's strategic position and its dimension is the main reason for this. The number of Resident birds are 240 , while 69 are vagrants. Among the migrants a few subspecies are resident while another subspecies is a migrant eg : Kentish Plover. The migrants arriving at the end of the Indian peninsula, enter Sri Lanka at five places. Most of the birds coming along the Western flyway fly across the Indian Ocean to land in Sri Lanka along the Western coast between Puttlam & Kalutara. Some weak birds are considered to fly up to join the entry points of the Eastern Flyway. Birds coming along the Eastern flyway, enter either from the Jaffna peninsula flying across from Point Calamire, or from Rameshwaran, via Adams Bridge to enter at Mannar. Some species enter Sri Lanka at Devils Point. The fifth entry point is along the North-East section, for the birds flying across from the Andamans. The weak flying birds, and smaller passerines such as Warblers, Flycatchers etc. are believed to follow the Rameshwaran-Adams Bridge route, mostly being overland. Migration-Map02 Having entered the country the birds continue to follow land formations to disperse within the country. Most of the birds that enter from the Jaffna Peninsula and North-East follow down the Eastern coast, or fly directly inland using again the river systems. The birds that enter along the Western coast follow along Maha Oya, or Kelani river. Another route is to fly along the Kalu ganga & pass through the valley between the Rakwana hills on the south, and the central Hills in the North East and enter the Southern coast without following the circuitous coastal path. Migration-Map03 The largest number of migrants are seen among the Waders, Ducks and coastal birds. In the family Charadridae 42 / 47 birds are migrants. Thus all the Plovers (Genus Pluvialis & Charadrius) except the resident populations of Kentish Plover, Sand Plover and Little Ringed Plover, all the Sandpipers, (Tringa spp.) most of the Snipe (Gallinago), Whimbrels/Curlews (Numenious spp), Godwits (Limicola) & Stints (Calidris) belong to this group. The five birds that do not migrate are the Red-wattled Lapwing, Yellow- Migrant Birds of Sri Lanka Leisure 30
  25. 25. wattled Lapwing, Little Ringed Plover-(subsp jerdoni), and Kentish Plover-(subsp seebohmi). In the family Anatidae, except for the Cotton Teal, Whistling Teal and the Comb-duck and possibly populations of Spot-billed duck all other species are migrants. Thus 11 / 14 are migrants. Of this group the commonest in its numbers is the Gargeny, Pintail, which migrate in numbers estimated very crudely to be around 250,000 or more. In the family Laridae, which is the main coastal group of birds 15 / 19 are migrants. Off them the commonest is the Whiskered Tern, which spreads into almost all the waterways of the in-lands. Many of them are restricted to the Leways, lagoons and the coast. In recent times with the identification of breeding terns in small coral islands offshore from Trincomalee, doubt has been cast on the status of many of the Terns. Detailed studies are needed to verify these doubts. Coming inland, the highest number of migrants are seen in the Family Muscicapidae; 24 / 46 birds. The familiar, Tree Warblers (Phylloscopus), Thrushes (Turdus, Zoothera), Blue Chat (Erithacus), are common and abundant. While a large number of species are irregular, and often unnoticed. Warblers (Locustella ), Reed Warblers (Acrocephallus), White -throats (Sylvia) and Wheater (Oenanthe), are among them. Next in line are:- (a) The Wagtails & Pipits (Fam-Motacillidae) in which six / seven migrate. The only bird that does not migrate is the Pipits sp. Malayensis. (b) The Swallows (Fam- Hirundinidae) in which five / seven migrate. The commonest being the East Asian or European Swallow. Other species in the family are very irregular and rare. Mention must also be made of the birds of Prey. In the family Accipitridae 11 / 25 migrate. Among these the commonest birds are Buzzards (Buteo) and Harriers (Pernis). The Osprey (Pandion) is regular, but not very common. In the family Falconidae, except for the resident breeding Shahin Falcon, all the other members (5) migrate. The threatened Kestrel is fairly common in the drier regions. ( Next Issue Studying migrants - ringing of birds) Leisure 31
  26. 26. Bank of Ceylon, Sri Lanka’s No.1 Bank and Asia’s Best Brand, is empowering youth in the country through awarding scholarships for 93 undergraduates who are studying in the state universities. BOC commenced this scholarship scheme in 2002 and has awarded scholarships worth over Rs.24.5 million to nearly 850 18 Plus account holders. Out of the 93 undergraduates 20 were selected on a special merit basis. Those selected were the ones who got the highest marks in each of the four streams- science, mathematics, commerce and arts, out of those 18 plus account holders who had applied the highest scoring five were selected from each of four streams. Each of these selected received a scholarship of Rs.35,000/- each. Further, 73 others were selected through a raffle draw and each of them were awarded a scholarship of Rs30,000/- each. BOC 18 plus account holders need to maintain a balance of Rs.5000/- in their accounts for a period of one year beginning from 1st of January to 31st December before sitting the Advanced Level Examination to be eligible to apply for 18 Plus scholarships. These scholarships are awarded in addition to all the other unique benefits that are offered with BOC 18 Plus accounts. Such benefits are, a gold coin that will be gifted on the wedding day (a minimum balance of Rs.100,000/- to be maintained for a period for 12 months prior to the date of marriage registration), a contribution of Rs.500/- to open a Ran Kekelu children’s savings account for the first child (a minimum of Rs.10,000/- to be maintained for a period of 12 months prior to the birth ADVERTORIAL Chairman BOC Mr Razik Zarook, UGC Chairman Prof. Kshanika Hiriburegama and Acting General Manager (BOC) Mr H M Mudiyanse with the 20 merit award winners. of the first baby), offering 0.5% additional interest rate, free life and medical insurance cover (terms and conditions apply), facility to obtain an instant loan up to 90 percent of the account balance, eligibility for an international debit card, internet banking and an SMS banking facility. Ranked by brand finance Lanka as the NO.01 brand in Sri Lanka for the last five consecutive years and ranked among the top 1000 banks in the world by the internationally renowned Banker magazine-UK, and accorded Asia’s Best Brand award by the CMO Asia council in Mumbai, India, Bank of Ceylon boasts over Rs.1trillion in assets, ten million account holders, a Fitch rating AA+ (lka) and over 1000 customer touch points, continuing to be the undisputed market leader in the Sri Lankan financial arena. Bank of Ceylon is also the only Sri Lankan bank with an international presence, with branches in Chennai, Male, and subsidiary in London, soon to be expanded to include the Seychelles. Business 34
  27. 27. g Records Back to Back Hat-Trick Wins Bank of Ceylon won three awards to record a double hat-trick at the National Business Excellence awards ceremony held on 27th November 2013 at Colombo Hilton. Last year also Bank of Ceylon recorded a hat-trick win by receiving three awards at the National Business Excellence awards ceremony. This event was graced by the presence of the Japanese Ambassador His Excellency, Nobuhito Hobo. Bank was awarded two Gold awards and a Bronze award this year. Those awards were received by Mr. D. M. Gunasekara, General Manager, Bank of Ceylon. Those three awards are, • Winner of the Banking and Financialservicessector–Gold award for the 3rd consecutive year. • Winner of the Excellence in local Market Reach award – Gold award • 2nd Runner-up of the Extra Large Category – Bronze award Bank of Ceylon as the “Bankers to the Nation” has served the Sri Lankan community for over seven decades and is the No.1 Bank in Sri Lanka. Bank has touches more than 10 million people in the country. The Bank is leading in every aspect of banking and financial services. During the last five years Bank has doubled its assets, deposits, loans, shareholder’s wealth and also increased profits. Bank of Ceylon became the number 1 brand in Sri Lanka for the last five consecutive years. Our multi-faceted offering is one of our greatest strengths. From the children’s savings accounts to corporate credit, for the state sector and private companies, the bank serves at every level. The bank has over 1,000 customer touch points and over 850 foreign correspondences. Today Bank of Ceylon is the market leader in Trade Finance, inward remittances, NRFC deposits and treasury operations. Bank of Ceylon dominates Sri Lanka’s financial services industry in all directions. Bank has achieved exceptional milestones with a clear vision to make the impossible possible. The only Sri Lankan bank with a one trillion asset base, it raised two US Dollar 500 million bonds, became the Asia’s Best Brand awarded by CMO Council in Mumbai, India and is ranked among the top 1,000 banks in the world by the prestigious “The Banker” magazine in UK. The bank also has expanded its banking services to Chennai, Male and London and will shortly have a presence in Seychelles as well. Bank of Ceylon will be celebrating its 75th Anniversary next year. Bank has consistently succeeded in contributing to the growth of our nation and continues to assist the development of the country and continues to guide our entrepreneurs to reach greater heights making Bank of Ceylon truly the “bankers to the nation”. Bank of Ceylon is truly the No.1 Bank in Sri Lanka. Business 35
  28. 28. Re-claiming the skyline : Thestoryofhigh-risedevelopmentsin TheSriLankanrealestatemarkethasbeenthroughafewstumblingblocksovertheyears but it is now showing signs of stability and sustained growth. However, the turbulence of the past has had its casualties and turning these projects around is no easy task. Building confidence The Sri Lankan property market experienced a peak in 2005, sparking-off higher demand for real estate at all levels including high-rise and high- end condominiums. Since then, steady economic growth has spurred this market as the island has propelled itself towards middle-income status on the back of a period of peace and stability. Key developments that triggered the upturn in the real estate market over the past decade may be described as follows; • Comparative decline in interest rates during the period of 2002 to 2005 that encouraged investment in properties as opposed to comparatively low income yielding securities and deposits. • Rapid rises in income in the private sector. • Tax benefits extended to borrowerseffectivelyfurther reducing cost of borrowings. • Migrant workers pursuing the middle-income housing market as a ‘safe-bet’ investment. • Slow return of expats who, with a peaceful environment prevailing, sought to pick- up high-end properties including condominium apartments in Colombo. The demand for investment in the property market changed many aspects of the supply chain from a financial sector perspective with commercial banks expanding their activities. In 2005 the annual demand for housing in Sri Lanka was estimated at around 80,000 to 100,000 units per year according to statistics offered by the Central Bank of Sri Lanka. In 2005 analysts commented on a rapid rise in demand due to the above mentioned factors as well as changing demographics and life-style patterns. The demand for luxury condominium units in the Western Province served to spur the construction industry as investors backed high-rise developments, which started to silhouette the Colombo skyline. The entry of large groups of companies in collaboration with international conglomerates continued to stir optimistic sentiments in the property industry of Sri Lanka. Enter the Financial Crisis Whilst the positive sentiments prevailed in the Asia region’s property market the overall global economy and financial stability was changing and exposing the economic volatility of iconic global-giants. The first shock to the system was a crash in the US sub-prime housing market. The aftermath of this had severe ripple effects that resulted in a slump in the world Leisure 36
  29. 29. economy that was described as the worst since the great depression of 1930s. Trillions of US$ were instantly wiped off from the global financial markets overnight. With the US housing bubble bursting, banks and financial institutions around the globe imposed strict policies and conditions on their credit policies as risk appetites gave way to conservative practices. Overall, people lost confidence in the system and many even started withdrawing their money from institutions. The public lost confidence in the system which resulted in large precautionary withdrawals of funds from institutions around the world. Whilst for the most part, the Sri Lankan financial services sector was insulated from the global crisis, larger investors, including foreign players operating in the domestic market faced negative prospects. Consequently, the continuity of several projects that were initiated in the 2003-06 period and under construction faced a number of challenges due to funds drying out. Abandoned Projects in Sri Lanka In retrospect, we can observe that the aftermath of the global economic crisis had a significant impact on the local real estate market with many ambitious projects getting stalled due to liquidity issues and some being fully abandoned. Herein, we take a closer look at some of these projects; Frances Residencies The project was initially owned by the Ceylinco Group and was initiated in June 2005. The proposed building is located at Frances Road Colombo 6 and the size of the land used for the project is 51.22 perches. The overall proposed investment of the project was at Rs.800 million. The expected end result of the project was eight floors of high end luxury condominium for high net worth individuals, mainly targeting expatriates. However, the widely publicized controversy that engulfed the Ceylinco Group at the time led to the project being suspended. At the point of suspension, the company had spent, Rs.200 million for the construction of 5 ½ floors, including the basement floor, ground floor and the mezzanine floor. Further investments include Rs.50 million on marketing efforts, employee salaries and consolation related activities. The land investment is valued at Rs.150 million. Theremainingworkoftheproject (3 ½ floors and other work) can be completed within 12 months according to RIU’s research. The current owners of the project ‘The Finance Company PLC’ are negotiating with several investors to recommence the project as a result of improved market conditions. P.T.O to 42 page Leisure 37
  30. 30. Today’sYouth,Tomorrow’sLeaders Sri Lanka initiated the Youth Delegates to the United Nations program in the year 2012. The youth delegates are selected through a competitive interview process, based on their grass- root level involvement, advocacy skills and engagement with youth activities in Sri Lanka. The first batch saw over 400 applicants, out of whom two capable young individuals from the North and South of Sri Lanka, Jayathma Wickramanayake and Aruthra Rajasingham, were selected as Official Youth Delegates to the 67th United Nations General Assembly. The second batch saw more interest of youth towards this opportunity as there was an influx of over 500 applications, out of which Chapa Perera and Adhil Bakeer Markar were selected as the Youth Delegates to the 68th UNGA. Their exposure to the largest international organization in the world allows them the fine opportunity to have a f i r s t - h a n d experience in international p o l i c y making and diplomac y. As part of the process, Chapa and Adhil travelled all across the island speaking to young people with diverse educational, c u l t u r a l and ethnic backgrounds. They were Chapa and Adhil with other Youth Delegates Leisure 38
  31. 31. able to cover all provinces including the war affected Northern and Eastern provinces and also the Central province covering estate sector youth. These consultations allowed Chapa and Adhil to understand the challenges Sri Lankan youth face. The youth delegates were able to meet with H.E Jan Eliasson, incumbent Deputy Secretary General of the United Nations, Former President of the General Assembly and Swedish Foreign Minister. Further Chapa and Adhil delivered the national statement at the Third Committee of the UN on behalf of Sri Lankan youth. This was recognized as a significant step which reflects the importance that youth have received in the Sri Lankan policy structure. The statement had special emphasis on several concerns raised during consultations such as education, employment and social inclusion. As part of the campaign to promote the World Conference on Youth which will take place in Sri Lanka in 2014 Chapa and Adhil organized a side event for the rest of the youth delegates who were part of the General Assembly. This event was supported by the Permanent Mission of Sri Lanka to the UN where Dr. Palitha Kohona, Permanent Representative and Major General Shavendra Silva, Deputy Permanent Representative were also present. The youth delegates of Sri Lanka also attended many youth events organized by youth led movements such as the African Youth Panel, World United Nations Association and also several other events hosted by young delegates from Switzerland, Germany, Belgium, Bulgaria, Dominican Republic, Denmark, Netherlands, Brazil, Poland and Romania. Chapa Perea with the UN Deputy Secretary General H.E Jan Eliasson Chapa Perera presenting the Youth Statement on behalf of Sri Lankan youth Leisure 39
  32. 32. A Mark of Distinction The Colombo Stock Exchange (CSE) is one of the region’s most dynamic stock exchanges & offers dynamic platform for issuers, by facilitating the listing of equity, debt and units of closed end funds. It is committed to ensure that it is the preferred choice of value and wealth creation for both listed entities and investors. Together with the regulatory authority, the Securities Exchange Commission (SEC), the CSE continues to ensure an appropriately regulated, transparent and liquid market that operates to benefit all stake holders. Obtaining a public listing is a major milestone in the life of a company and the decision to list, which may well be the most significant business decision you make, is one that must be initiated only after careful assessment of all relevant factors. CSE has raised Rs.89.55Bn from new listings & Rs.107Bn from further issues since 2010 to-date. Some of the recent listings at the CSE are highlighted in the table below. Recent Listings at the CSE Selected Advantages of Listing Attract long-term capital for growth investments Togopublicornotto,thatisaquestionthatariseswhenacompanyiswell-establishedandiscontemplating the next phase of growth. Being profitable, stable and well reputed by this stage, your company may well be able to access bank debt at favourable terms; however, the question remains if you should. Fundraising at this stage is for long-term projects: to expand, diversify, acquire or merge. While bank debt is a low-cost option suitable for working capital purposes, for projects where the pay-back period is long, it is best to have a mix of equity and long-term debt capital to ease the strain on a balance sheet. Raising equity through a listing provides a company the ideal option of partnering with a set of capital providers willing to share in both the risk and reward of the project. Issuer Listed- Year Sector Equity/ Debt People’s Leasing& Finance Company 2011 Banks, Finance & Insurance Equity Laugfs Gas 2010 Power & Energy Equity Expolanka Holdings 2011 Diversified Holdings Equity Sampath Bank Plc. 2012 Banks, Finance & Insurance Equity Seylan Bank Plc. 2013 Banks, Finance & Insurance Equity Source: Colombo Stock Exchange Business 40
  33. 33. Return to market to fund next phase of growth For a successful listing, and, once listed, for a share price to command a premium valuation, a company should not view a listing as a one-time event. Management has the option to access share markets to raise capital throughout the business cycle. A successful listing where the issuer receives a fair price for the shares and at which the investor generates solid returns, coupled with a good relationship between the two parties, often translates into the company being able to raise fresh capital for the next phase of growth at later dates at a higher valuation multiple (through rights issues, further listings and listed debt, etc.). Enhance the corporate profile Companies listed on the CSE receive regular media coverage. International and local financial publications usually cover each stage of the listing process (announcing intention to float, publishing the prospectus, local/ international road shows, etc.). This heightened awareness of a company’s activities, together with the profiling of key shareholders/ managers, provides what is effectively below-the-line advertising, and it enhances a company’s visibility, brand image, and prestige. Attract strategic investors High visibility, t r a n s p a r e n c y, and enhanced liquidity enable a listed company to attract high-quality shareholders, such as institutional and strategic investors, on to its shareholder register. Attribute an objective value to the company A private company’s valuation suffers a discount owing to illiquidity and perceived risks due to the limited availability of information. A listing at the CSE leads to an independent market valuation of the company. Your company’s superior attributes – such as its potential for high growth, revenue and profit generation, competitive advantage and cash generation ability – would likely attract demand for its shares, resulting in a premium valuation for the company. The higher valuation, combined with the company’s growth through the funds raised, would in turn enhance the value of your holding. Although your percentage of ownership in the company is lower than before, the increased valuation for the entity could likely result in a significant increase in the value of your stake. Align shareholder/management/ employee interests A public listing of shares simplifies and facilitates the process of share-based remuneration for employees, which can serve to attract and retain talented staff. Stock-based compensation provides employees an opportunity to share the benefits of a company’s profitability and growth, which in turn helps align employee interests with that of management and shareholders. Ms. Otara Gunewardene CEO ODEL PLC “Listing on the Colombo Stock Exchange allowed ODEL to raise funds for our expansion and infrastructure development. The listing also gave us the platform to build a strategic relationship with Parkson Retail Group and expand our reach internationally “. The forum was the first of its kind organized by the CSE which is one of many initiatives planned to create awareness and attract of new listings. Business 41
  34. 34. Cont. with 37 page Mayfair City Project The project was initially under the ownership of Shaw Wallace & Company Limited. The development of the project was undertaken by Pioneer Properties and Lee Hedges Limited, the fully owned property development subsidiary of Shaw Wallace & Hedges. The project was initiated in August 2010 and the land for the project is located at Colombo 3 and constitutes 542 perches extending from Galle Road frontage to the edge of the parallel R.A. de Mel Mawatha. The project was proposed to be two towers, each holding 30 floors with 307 luxury condominiums. The project was halted in June 2012. At the time of suspension, the piles supporting the project had fully completed with the contagious piles, thecappingbeamandtheparameter grouting. Financial difficulties led to the project suspension. The developers intended re- designing stage I of Mayfair City and continued construction as a commercial development with a joint venture partner. They are now moving away from the previous residential focus. Reports suggests that the company has sold part of its Colombo 3 land to Avic International HotelsLankaLimitedwhichisalocally incorporated unit of Chinese state- owned aviation company CATIC (China National Aero Technology Import and Export Corporation). It can be assumed that the funds obtained through the transaction will be used to finance the Mayfair City project. The land has been sold for Rs. 1.85 billion. The Summit The land for the project was owned by Chandra Senanayke Holdings and it was leased to an undisclosed investor. The land was situated at the main junction in Colombo 3. The project was initiated in mid-2009 and it involved an ambitious US$ 20 million proposed investment project. The final outcome of the project was a commercial building with ample office space and up-market retail space. The project was halted in mid- 2012. The company has invested US$ 750,000, mainly on piling and other related charges (consultation, employee salary etc...) at the point of halting the project. Piling has only been partially completed at 30 per cent. According to the owners of the project, full completion is set to take a period of 36 months. Negotiations with a prospective investor are also under way at this point. Outlook and forecast While recent Budgets and policy initiates had focused on reducing the tax burden of the banking sector, the Budget proposals for 2014 have introduced the National Building Tax (NBT) into the banking sector with the intention of improving government tax revenue which has remained below targeted levels. The government has also signalled that it would like to consolidate the stability achieved in this sector by merging smaller finance companies and encouraging the local sector to collaborate with foreign funds and financing institutes. These measures will help the financial sector to facilitate the inflow of foreign investment into local projects in the real estate sector. In many emerging markets similar to Sri Lanka, financial flows and real estatebubblesdogohandinhand,as global investors are assured of quick returns on their financial investments through real estate speculation. Over the past four years, Sri Lanka had the advantage of being branded as a post-war economy, which added to the euphoria and drew more of the capital flowing to the "emerging markets" through foreign sources. The real estate industry in Sri Lanka has benefited immensely in the post war environment sans security issues in the Colombo city. Leading this revival, the expat Sri Lankans who had not considered Sri Lanka as a viable real estate investment options during the war era, took a completely different view as the island economy offered good prospects as an investment and a second home. In the context of recession in the West, and the high income levels enjoyed by this segment the demand for luxury living continued to increase. In this connection, there can be considerable optimism regarding a swift and profitable turn-around for the abandoned projects. Market Report, Research Intelligence Unit / Leisure 42
  35. 35. 50 Years The story of Michael Kwei Ting Hsu The Chinese Park View Lodge, which celebrates 50 years this December, was the result of one man’s remarkable journey across a continent to make a new life for himself. In 1945 at the age of 14, Michael arrived in Sri Lanka from the Shandong Province of a rapidly changing China. Arriving in Sri Lanka with a sign around his neck saying “This Boy Does Not Speak English” he was welcomed by a small community of Chinese immigrants who had started to build a life based on the two qualities that would become synonymous with their generation; hard work and entrepreneurship. Michael first lived in Mount Lavinia where he started work at a curio store in the Mount Lavinia Hotel. The store was owned by another Chinese gentleman from Shandong. Michael learned English by going after work to the Salvation Army who offered English classes in the evenings.. In 1955 he bought his own car and started a curio store, called Peking Store, in Colpetty at the intersection of the Galle Road and Dharmapala Mawatha. The Peking Store’s merchandise was expanded from curio to clothing and music and it remained a familiar landmark on Galle Road for several decades, becoming a regular haunt of music aficionados and one of the 1st “record bars” in Colombo. Peking Store marked not only the beginning of his steady rise to becoming a successful self-taught businessman in Colombo but also the point at which he put down roots in Sri Lanka. In 1956, he married Noeline Chow, a beautiful, young woman of mixed Chinese descent. The 14 year old boy who had arrived on this small South Asian island from a remote province in China, with dreams of making his fortune, had finally found a home here. With this experience of running a business and his affinity for Chinese cooking Michael took the next big step and opened a Chinese Restaurant which was located on Park Street, opposite the Vihara Mahadevi Park. The food at the restaurant, called Park View Lodge, takes its basic essence from his village in China, and is the tried and tested work of Michael, who was both manager and chef. He recreated the foods from his homeland to suit the palates of both his Sri Lankan and Chinese customers. “He did all the cooking himself. He experimented for hours in the kitchen to bring to life to his new creations”, says his daughter, Janice. She recalls how he would go every morning, well before dawn to St John’s market to buy his provisions for the day. “All the fishermen taught him Sinhalese,” she laughs, “and he used to come home and proudly tell mom all the slang he had learned having no idea what they meant.” After years of countless challenges, Chinese Park View Lodge evolved into a successful business in Colombo. For most Sri Lankans of a certain generation, the Park View Lodge on Park Street became synonymous with some of the best Chinese food available in Sri Lanka. The bungalow on Park Street had been the home of a former British Governor General and it housed the restaurant for over 45 years. Park View now operates out of its current location on De Saram Road. Even after the restaurant had established itself becoming a thriving establishment with a staff of over 30, Michael never missed his morning routine to the market and still continued to prepare most of the food. Driven by the success of the Park View Lodge, he imported the first noodle machine from Japan in 1973, had a German engineer install it and started to manufacture his own brand of noodles. Today, under the leadership of Mr Shen Woei Chang the restaurant continues in the proud tradition that Michael and Noeline Hsu left behind. Park View Noodles remains one of the best and most sought after noodles in the market. Michael based his business on two principles; “Cater to the masses with great quality and value and you will do well” & “Be honest in everything you do”. Michael was ambitious, respectable and a man of high integrity and vision. These principles and his singular value of education were passed onto his three children. He gave of himself unselfishly to his family and Community, making them his priority in life. Sadly, he passed away in 2010 leaving behind a legacy that is maintained by his three children and their families. Michael’s legacy and passion for food and close family ties lives on through his children, grandchildren and great grandchildren. Knowledge 46
  36. 36. The Roadstone brand awareness programs in the form of road-show campaigns are conducted at selected areas of Sri Lanka in order to popularize the brand image as well as educate vehicle lovers on tires including the available sizes with the benefits and the comfort that tires can make. Roadstone wants its customers to ‘feel the ultimate performance’. Here are some pictures of the recent road-show which was held in Ja-Ela. ADVERTORIAL: The BIG Issue hits the road ! Leisure 47
  37. 37. Susantha Punchinilame, Secretary to the Ministry of Industry and Commerce Mr.Anura Siriwardana ,Chairman of Sri Lanka Tourism Mr. Bhaswara Gunaratne, Director General of Sri Lanka Tourism Development Authority Dr. D.S Jayaweera and Managing Director of Sri Lanka Mr. Rummy Jauffer too part of the Lankan delegation. “Sri Lanka Shines In Beijing” joint mega promotion campaign held under the guidance of Minister of Economic Development Hon. Basil Rajapaksa. This event has been organized by Sri Lanka Tourism Promotion Bureau and Sri Lanka Embassy in Beijing. The first event in the schedule was Sri Lankan Night held on 29th August at China World Hotel. “Sri Lanka Shines in Beijing”nightwascolourfulwith cultural shows which reflected the unique Sri Lankan identity and the participants in the event were truly entertained. Over 500 high profile Chinese TOURISM: PenetratingtheChineseMarket The first ever Sri Lanka’s mega promotion in China , with joint efforts from Public and Private sectors, has been initiated under the advice of H.E the President Mahinda Rajapaksa held from 29th of August to 1st September 2013 in Beijing China. This is a joint effort of 45 key government institutions and private sector organizations. This campaign, held in Beijing, was organized under the guidance of Hon. Basil Rajapaksa, the Minister of Economic Development. Sri Lankan delegation to the “Sri Lanka Shines In Beijing” led by Senior Minister A.H.M Fouzie while Deputy Minister of Economic Development Sri Lanka Shines in Beijing” Joint Mega Promotion. Event has been described as a huge success to the Tourism and Trade industry of Sri Lanka Leisure 48
  38. 38. guest including Politicians, government officers, Travel Trade Businessman and media were invited for this colourful night. On the second day of the campaign (30th August.), the participants got the opportunity to attend business meetings arranged at China World Hotel Beijing. Over 300 professionals working in the Chinese tourism and trade industry attended these meetings. It was a great opportunity for those in Sri Lankan travel and trade industry to build up links that would help their respective industries. Sri Lanka Tourism Promotion Bureau in collaboration with Sri Lanka Inbound Tour operators Association of Sri Lanka, introduced a special holiday package for Chinese travellers, who would like to arrive in Sri Lanka. Sri Lankan Airlines, the Island’s national carrier offer special air rates for this special tour package. The Shopping Mall activation at “The Place” shopping mall saw Sri Lankan dancers, drummers and DJ’s taking the stage to entertain the Chinese public, while a large number of Sri Lankan firms displayed their products and services during the c a m p a i g n . Among those exhibitors was the Island’s gem traders who display the world’s best blue Sapphire’s among many other gem stones. The Island’s hoteliers and tour operators too would make their presence at the activation campaign. During the shopping mall campaign, Sri Lanka Tourism along with the Tourism Partners offered free holiday packages, which the lucky Chinese men or women grab by entering the competitions held during the Shopping mall activations. Along with the Mall Activation Campaign, a Sri Lanka Bus branding Campaign too inaugurated on the 30th August at the same venue. Sri Lanka Tourism Promotion Bureau, hope the Bus Advertising Campaign which is being conducted with the support of 300 buses will promote the Island nation among the Chinese public living and visiting cities Such as Beijing, Shanghai,Chendu and Guangzhou. Over45SriLankan government and private sector travel and trade institutions participated for this mega event. Chinese tourist arrivals to Sri Lanka is on a steady rise, as the country has received Chinese tourists during the first seven months of this year, which is a year on year increase of 74 percent. The latest jump shows encouraging signs as the Government of Sri Lanka is campaigning vigorously to capture a slice out of the growing Chinese outbound tourism market, which during the year 2012 in total stood at 83 million tourists. Leisure 49
  39. 39. With Compliments Call us for the best deals to any destination! Third eye Travel Ltd. 0208 438 0330 / 0208 432 6112 Emergency no : 07946 737 268, 107, Atlas Business Centre, Oxgate Lane, London Nw27HJ
  40. 40. LOCAL NEWS In Economic news : Budget 2014: Mix of ambitious targets and protectionism for local industries. Budget 2014 took a familiar path of an ambitious revenue target, increased protectionism for selected local industries and borrowings expected to meet the shortfall. With the intention of reducing budget deficit to 5.2% of GDP the government outlined plans to increase overall revenue to Rs.1,437.4bn. This is a staggering 21.5% YoY increase from 2013’s revised forecast revenue of Rs.1,183.1bn. The government expects 2014’s higher revenue to come from; • 2.0% National Building Tax on banks and financial institutions • Valued Added Tax free threshold on supermarket’s retail revenue reduced to Rs.250m from Rs.500m • Increase in telecommunication levy to 25% from 20% • Increase in export taxes on selected goods • Reduction in the depreciation value on vehicles with a production date over one year and less than two years • And a series of tax on goods introduced through gazette notifications Most tax levies of the budget were introduced through a series of gazette notifications which were published after the budget speech. This left many people unclear as to the impact of such taxes at the time of its announcement. As in 2013, tax revenue would be expected to contribute about 88% towards 2014 revenue target. However the lack of a large tax population base and continuance of granting lengthy tax holidays for new investments often lead to actual revenue being wide of the mark. Overall expenditure is to increase to Rs.1,985.6bn (+16.0% YoY) with public investment up 32.7% to Rs. 668.5bn, infrastructure spending up 32.6% to Rs.594.4bn and debt interest payments amounting to Rs. 441.0bn (-0.9% YoY). Despite removing some fertilizer subsidies overall subsidies and transfer are to increase by 11.0% YoY to 284.7bn. The resulting budget deficit is forecasted at 5.2% of GDP versus 2013 forecast of 5.8%. The deficit is to be financed through domestic borrowings (Rs.280.6bn) and foreign borrowing (Rs.235.5bn) of which Rs.97.5bn is expected to come from foreign commercial borrowing indicating a return to a sovereign bond issuance. The government continued offer incentives to “select”local industries increasing import taxes on several food items, building materials and even boats. Other notable comments from the budget speech • Finance companies which are subsidiaries to be merged with the parent • $150m provided to SriLankan Airlines and $50m to Mihin Lanka • Rs.1,000m to Sri Lanka Transport Board to purchase 2,000 buses and Rs.500m to meet operating losses • Urban Development Authority to borrow $750m from overseas to build houses • State workers cost of living allowance increased by Rs.1,200
  41. 41. LOCAL NEWS In Economic news : Sri Lanka’s GDP expands 7.8% in the third quarter. The Department of Census and Statistics reported that the Sri Lankan economy grew 7.8% YoY in 3Q13 (vs. 6.8% in 2Q13 and 4.8% in 3Q12). Significantly there was growth across all sectors as industrial, services and agriculture categories grew 7.0%, 8.1% and 7.9% YoY. In agriculture the paddy sub sector grew 56.5% YoY offsetting decreases in tea, rubber and coconut production which were affected by adverse weather conditions in the wet zone and coconut triangle. Growth in the industry sector was mainly in mining and quarrying (+12.5%YoY), electricity generation (+12.1% YoY) and construction (+10.0% YoY). The service sector was up 7.9% YoY on strong growth from hotels and restaurants (+13.6% YoY), transport (passenger and goods) 11.7% YoY and telecommunications (+14.7% YoY). Budget deficit shrinks to 5.6% of GDP on higher tax revenue and limited public investment spending. As per the Department of Fiscal Policy country’s budget deficit during Jan- Sep 13 shrank to 5.6% of GDP from 6.4% a year earlier. The improvement was on revenue growth of 2.7% YoY to Rs.780.2bn, driven by 4.2% YoY increase in tax revenue to Rs.706.7bn. However total revenue is almost 16% off the nine month target meaning annual target of Rs.1,183.1bn is sure to be missed. During the period expenditure grew just 1.4% YoY to Rs.1,275.1bn. However significant recurrent payments such as salaries and interest payments amounting 52% of total expenditure increased a combined 13.7% YoY. The slight growth in expenditure was largely due to reduced public investment (Rs.369bn, -4.0%YoY) and other expenditure (Rs.261.7bn, -14.8% YoY). Delay in incurring public investment is often used as a tool to portray a picture of fiscal soundness which otherwise would not looked so rosy. If 2012 (9 months) public investment sum had been spent this year the budget deficit would have increased to 5.9% of GDP higher than annual target of 5.8%. Despite remaining confident after second quarter results, the Central Bank of Sri Lanka (CBSL) revised 2013 GDP to between 7.2%-7.3% down from previous estimate of 7.5%. CBSL Governor speaking to Reuters stated that “The fourth quarter growth will be led by the construction and tourism sectors”. BOI firms to be taxed. Regulations are being set to tax Board of Investment (BOI) companies from 2014. Mr. S.R. Attygalle, Deputy Secretary to the Treasury stated that “There will be around 216 BOI approved ventures which have enjoyed tax free regime for 10 to 15 years coming in to the tax net from 2014. We have declined request for any extension of the tax-free period because their time to pay up has come”. He further went on to say “given the relatively low rate, the government has made a firm decision that there will be no more tax holidays except on select investments including those coming under the Strategic Development Act,”. The budget deficit was financed by Rs.396.5bn of domestic financing and Rs.95.4bn of foreign financing. 55