12th August 2018

Speech by the Chief Guest & the Keynote speaker Hon. Eran Wickramaratne

Thank you. Good evening to all of you. And may I, right at the outset, wish Sri Lanka Shippers Council and Mr. Chairman Chrisso, Suren and everyone else, the very best as you enter a new year in your journey in the Shippers Council. I was also very pleased to hear what Chrisso had to say, in his opening remarks. And also to hear Rajith speak about the industry, both trade and finance, and within Citi Bank. About the time he was in Citi Bank also, and it was interesting to see, how the industry has evolved. And also, he was talking about, you know, the new platforms, you know, that are there.

And encouraging everybody to get on these platforms. It took me back, mentally to the time that I started off my first job as a banker, in 1984, when I joined Citi Bank. I had not heard the word internet, I hadn't heard the word email, but the bank I joined, had something, say called, Citi Mail; which is in essence the forerunner of Email, because when these were created, these were given to large US corporates, and at that time we had the, if you want the advantage, of actually using these tools.

We were really not smarter, but we really had the technology. So I would use the email, and I would go home, and I had a, my father in law, who was a businessman, who would get up at 3.30/4.00 in the morning, and go down to his office room, to use a telex machine. And I could hear the noise of the telex machine.

And so we coined this phrase, 'The city that never sleeps.' And I often wondered, right, how technology, gives you such a huge advantage, it doesn't mean that you're necessarily smarter, but it gives you such a huge advantage. So, Sri Lanka has a vision. Then I'm wondering, actually, listening to many people, what really is a vision. I go from forum to forum, and also I hear about the great achievements of our country.

Just last week, in parliament, there was a presentation made, on the health Sector of the country, to parliamentarians. And I looked at all the statistics and I looked at all the graphs, and all the achievements that were there. When the discussion time came, I said, please don't misunderstand what I'm going to say, because it's not to take away of the achievements we have made in the health sector. Now the reason I said that was, that we have achieved much, but really the question is, have we really reached the full potential, in our different sectors that we could have actually reached. This is the question. Sri Lanka in 1948 had a per capita income, of only second to Japan in Asia. So we have achieved much, but have we achieved our full potential.

This is the question. What really is the vision? I think of Sri Lanka as a country, that we don't need to compete in Asia, we should be thinking of ourselves in a generation, the way in the first quartile, of all the countries in the world. Within the first quartile of all the countries in the world, when you look at all the economic indicators. We certainly have accomplished much, and people would challenge me on that, when they talk about their sectors. Well I'm saying, we need to have a bigger dream. And to get to the bigger dream, often the thing that holds us back, is leadership.

I can talk about leadership conversations in politics, but I'm not talking about just politics, I'm talking about leadership in the wider context. We come to a forum like this, and you have Ajay talking lots of details, on complex issues, and leadership is about leading through complexity. Certainly I would admit that in the political arena, we don't have the leadership that would lead through complexity.

Often in our cocktail circles when we get into our small groups and conversations, we talk about leaders. But these leaders, and not going to take Sri Lanka into the next quartile, because they do not have the background and that ability to lead through complexity. It's not going to come from my generation. It's going to come from the next generation.

The millennial generation. If you want, the internet generation. The generation that understands complexity. If you look at countries that have advanced, very very quickly, it is because political leaders, emerge largely from the industrial space. And emerge from the commercial space. We need that jump. If we are to jump and race as a nation.

I remember a conversation as a young executive, working for a multinational bank. It happened to be largely an American bank. And I remember there was something called the American Business Circle, which preceded the US Chamber of Commerce that is there now. I was there at the luncheon meeting, around a small table, it was a small group of people because the Chamber was that small. And I was there representing the CEO of the bank. And at that lunch time, the speaker was the Honourable Lalith Athulathmudali. One of the finest minds the country ever had. Went into the Chamber, became a politician and was now in charge as a minister.

He came in, and we had lunch and he gave his small speech. And then he went to Q and A. And the topic was on education. And I turned to him and I said, I said Mr. Minister, I want to know why I and my friends, cannot get together and own and run an educational institution and a school. I still remember I was the youngest among them, I may have been just about thirty years old, everyone else was much older. He looked at me and he said, he said young man, I want to say something. It's against the policy of our government, to allow private schools.

And that was the end of conversation. Lunch was over, Mr. Athulathmudali said, you know I have to be in Parliament so would you please excuse me? And I'm going to take your leave. He got up from the table, he came around the table to where we were sitting, he tapped me on the shoulder, and he said, you know, I agree with what you said. But he said, I can't say it publicly. I got up from then table, I accompanied him to his car.

And I said sir, why, what's the problem? Then he said, it's the policy of our governments and that's the reason why we do not have private education. But he said I agree with everything you said. Then he said, it doesn't really matter who supplies education, it is education that really matters. Thirty five years later, I stand at this podium and say, it is still an unresolved issue in our country. I want to make just three quick comments before I conclude. Why is our education, thirty five years later, we are still debating. The last three years, we had students from the University on the streets, against a private medical college.

Then we have to ask ourselves the question, you know, where are we going. We have to resolve the bigger issues that we face, if we really want to leap, as I said, to the first ……………… quartile in all countries in the world in one generation. It is possible, if we are able to make some decisions, on the big issues and education is one of them. From the time I was small, I always remember adults saying, you know when you grow up, you must become a doctor. When you grow up, you must become a lawyer, an engineer or some profession like that. I remember hearing that, thirty five years later, I still hear, in some homes, the same mantra being repeated. The world has changed, but we are changing slowly. In our country, we look up to the professionals, we look up to people like myself, and I've often wondered, why haven't we really looked up to entrepreneurs, rather than professionals. It is the entrepreneurs who have created the wealth. It is the entrepreneurs who have created the job. It is the entrepreneurs who have created a better future for us. But somewhere in our thinking, somehow or the other, they are a bit lower than the professionals. We are thought more highly than the entrepreneurs. Sri Lanka has only 2.78% of entrepreneurs, when you compare with its working population. If you take Vietnam, a country which is called a Communist country, has more than 19% entrepreneurs. Thailand, Malaysia; you name Asian countries, way above in terms of the number of entrepreneurs. Even a big country like China, has 7.5 % entrepreneurs by the same definition that I gave, but Sri Lanka, only 2.68% of entrepreneurs. So what has really happened? What has really happened? I'm a banker. And as a banker, when somebody walks through the door, I give them a loan, and I want to basically, collect my money.

As a banker, I'm on the other side of the coin, risk averse, an entrepreneur takes a risk. And often, we don't have the capital markets developed in a way as somebody is trying to stand with the entrepreneurs, and take that risk. And therefore, entrepreneurship is something that lags way behind, and it is something that we need to encourage. And the final point I would like to talk about is, the point on competition. I remember, as a child, in the 1970s, I remember the time when my parents would be talking, and adults will be talking, and they'll say things like, there is no rice today.

Because you're not allowed to eat rice today. Because rice was confined to, I can't remember, two or three days a week. I remember, the conversation that you cannot really transport rice in your vehicle, because at the next check point, need the car might be stopped and they might check, whether you are actually transporting rice. I remember, as a more adult student, playing in the college teams, having to show up for a photograph, without a blazer, because the blazer material was not available.

I remember having to find a very well distinguished old boy, going and borrowing a blazer from him, just to wear the blazer for the photograph to say that I represented my college. Even today, I don't have a blazer, neither do I have a colours cap to show that I ever played the sport to the highest level in my school, and that was because, of the economy of the day. We believed in a closed economy. Things have changed, but my question today is, has it changed enough. You know, I was glad to hear Ajay make some remarks. And he made some remarks about competition and contestation. If we want to advance, we have to face up to these realities. The only way forward, is to be competitive. The only way forward, is to be efficient. The only way forward, is to produce at a better cost than everybody else. Now, I am the State Minister of Finance. Now, people come and sit outside my door, most of them who come through are businessman. Most of the time the request is to protect their industry.

Most of the time, the argument runs, you're protecting jobs, and you're protecting incomes. Where did anybody come and speak for the consumer. What is the battle? The battle is between the consumer and the producer. At any given government, you're always trying to balance between the interests of the consumer, and the interests of the producer. Consumers want the best product at the lowest price. But producers, and businesses often want to protect their bottom lines, and somehow or the other stay where they are. It is only competition that can deliver on both fronts for consumers and for producers. And therefore, whatever the industry might be, we need to be competitive.

As a government, we are going on the route of making Sri Lanka more economically liberal. That's why in the last budget, the Prime Minister removed para tariffs. 1200 items including various different para tariffs. They expect it to reduce it even further. Already people are saying that if we do that, we might be open to unhealthy competition. It's not only that, our government wants to change the mix of direct/ indirect tariffs.

Indirect tariffs are 82%. Direct tariffs are 18%. Indirect tariffs put a higher burden on the poor, and therefore, indirect tariffs need to reduce and there needs to be a balance, in making that move. This is the reason that we are moving in that direction. Your industry too has to face up to the issue of protection vs competition. You have to face up to the issue, that prices cannot always be controlled. And it has to be competitive. You have to face up to the issue that foreign participation becomes a necessity in an integrated and globalized world.

I know that there many arguments that have been proved. Even in the shipping industry, even in the agency industry. But in order to be sustainable, in order to grow beyond the rates that we are growing, we have to think bigger and we have to think in a more competitive way. We have to go beyond transshipment to more value added third party logistics activities also, to attract. And this is something we need to pursue. It is necessary to maximize the incentives also to other operators, to basically hold through Colombo and increase their participation.

The world keeps changing, but liberalization has worked in other industries. It's worked in the telecommunications industry, it has worked in the hotel industry. That is why we are seated in the auditorium of the Shangri La today. Because this market, was one of the first to be opened out, in the 1970s. That is why my mother stayed, on a waiting list for 10 years to get a phone, but I got a phone by just taking one phone call, because of liberalization.

Therefore, we have to be open to what's really happening in the world. Ajay said, that there are concerns because of trade wars, between big powers and as a result, protectionism. But whatever those trade wars may be, our future lies, not in this market, our future lies in conquering the markets around us. That is Sri Lanka's positioning.

It's education that matters, not who supplied it. It's entrepreneurship that matters, not whose ideas it is. It's trade that matters, and it is consumers that eventually must benefit. Thank you again Chrisso for inviting me, I know you will not invite me next year, thank you very much.