Plans, Teams & Mis-Steps

By Upatissa Pethiyagoda –

There is much hope placed on direct foreign investments (FDI) and tourism, as the sectors most likely to help hoist us out of our current financial mess. Are they properly thought out plans, mere fantasies, deceptions or added follies? It is wise for us to frankly and rigorously examine and recognize possible perils or false expectations ourselves, rather than leave it for  others to do so. Confidence lost, is not easily regained. All geese cannot pose as swans.

Foreign Direct Investment (FDI)

Foreign investors are not Santa Claus’s in disguise. They are hard-headed business experts, looking for opportunities to maximize returns for their clients and profits for themselves. This is quite legitimate, and it is naïve to think otherwise. They are certainly not here for our good. Not ‘altruism’, but ‘profit’ is the name of the game. Who can blame them, seeking rules that are fair and promises that are honoured? To think otherwise is stupid.

What have we got, to offer and attract them away from other competing locations? It is up to us to design ways of profiting ourselves as well. This would be a refreshingly positive change.

Firstly, integrity and honesty is paramount. We are woefully inadequate in this respect. Bribery and self-interest are definitely not supportive of long term and lawful international business. Evidently, foreign entrepreneurs are well aware of this, and reportedly factor in an amount for “palm oil”, euphemistically disguised as “operational”   or “contingency” costs. Pre-inflation it was rumoured to be “ten percent” (basic), but now it is probably much more.

Many of these stories of inflated Tenders, are possibly malicious constructions, and untrue, but even the slightest whiff of rumour is greatly damaging, and would deter investors who have better options elsewhere, notably in places like Singapore (where it has been recently reported, that three Cabinet Members are being investigated for possible corrupt practice. It may be of some interest to note that they are all of Indian descent.)

It is said that a few decades ago, we and Malaysia (which included Singapore), had per capita GNP of around US dollars 5,000, today we are still around the same, while Singapore’s is at about 84.000! This is quite deplorable for us and is a great hurdle in securing the necessary confidence and trust of prospective investors. This is a natural expectation, in a highly competitive segment.

Corruption is a malady that corrodes both laterally and vertically, particularly where individual/official discretion is involved. Sadly, the currency note nestling between the pages of the driving license called for, is a symbolically common ruse. Many junior officials, adorning positions of regulatory or legislative authority, are afflicted with this highly infective and common malady, often referred to by the code-words – “something ekak”.          

Legal matters should be explicit, prompt, fairly imposed, free of interference, fraud or favour. Institutions for dispute settlement should be fast, fearless and fair, to win and retain respect and acceptance. Much in this regard is expected by FDI’s establishing in the Port City.

The recent Supreme Court ruling that the so-called “Ports Authority” was in error, by arrogating to themselves the right to interfere in a matter concerning Tax Waivers. This is a seriously damaging judgment for any hopes of FDI.

Bitter lessons learnt from the Hambantota fiasco, should prompt caution. An expensive harbor of limited use, apparently based on the most superficial observation of ships on a main navigation route, by-passing Hambantota.

It was wishfully expected to therefore entice and attract shipping business, by improved supply services and for cargo transshipment. In addition, exceptional tourist prospects, (eg Yala, Singharaja and Mirissa) and culinary specialties (e,g Buffalo curd and Jaadi), could encourage passenger traffic as well. One hopes.

Tourism

All visitors must be treated as special. I have yet to hear of tourism alone raising a country from poverty to riches. However, tourists can assuredly maintain a rich country in continued prosperity.

Old World charm would attract some. But it is the business visitors (who are generally high end-spenders), who would matter most and also be the best propagandists, to carry messages of excellence. The dilemma that is faced by countries like ours, is the provision of costly infrastructure and to maintain attractions in an excellent state.

The popular image of Sri Lanka is that visitors feel welcome, secure, and treated with magnificent scenery, soothing weather, and outstanding historical and cultural treasures. It is up to us to guide visitors to help reduce the gap between the wealthy visitors and their poorer servers. This is the surest way to prevent petty thieving and cheating.

For instance, where an entry fee is needed to visit a site, it is unacceptable (or unethical), to charge visitors a higher price than locals. It is even more disastrous, when such discrimination is so prominently displayed.

These may seem trivial, but quite important in dispelling any suggestion of exploitation. The mere fact that visitor airport entry figures are rising, is no justification for complacency.

The Port City Project

This “Showcase Project” presents several possible negatives. The first is physical stability. Admittedly, there are several examples where extents of land reclaimed from the sea, have presented no engineering issues, in supporting high rise structures. This may have been by enforcing and observing rigorous safeguards. In our case, the ground is essentially of recently mined sea-sand and rock, but intended to carry multi-storied buildings. Could this cause problems of sinking foundations? Presently our standards of control are poor, and cases of collapse, are not rare. It takes only one such calamity to massively impact on investment.

Infrastructure and services

The ambitious plans for development in the Port City, will demand much by way of infrastructure – uninterrupted power being one of the highest priority. Water supplies, drainage, sewerage, garbage disposal, parking lots and easy access, fuel supplies and adequate reservations for leisure areas, greenery etc. would obviously have been thought of and incorporated into development plans.

Necessary production facilities for consumables – fresh vegetables, fruits, meat, fish, poultry and condiments will be needed. The possible use of abandoned fields, mainly paddy lands in the vicinity of Colombo, could be reclaimed and put into productive use, particularly of “market garden” produce. One assumes that detailed plans for supplying all these are in place.

The recent judgement which casts doubts about the proposed “Port City Authority” with its envisaged over-riding control and enforcement power, ruled that it is in conflict with “The present Constitution”. This is a bad omen, and such possible legal tangles should be foreseen, and appropriate and timely corrective actions taken.

Unless all of these requirements are provided for, “plans” qualify as “dreams” and potential mis-steps are already rising menacingly.

The “Nelum Kulunna”and the “Kukul KooduwaTheatre” are vibrant and monstrous mis-steps, of which we emphatically need no more.

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