SL diaspora is privy to most updated technologies in advanced economies
Govt can take a cue from India and introduce a special visa category for them
Diaspora entrepreneurs’ linkage with global networks should be harnessed
by Sanath Nanayakkare
Policymakers can encourage the Sri Lankan talent pool which is spread across the developed countries to shift their base back home if they pull the right policy levers, said the head of department of a leading university in Sri Lanka.
Dr. Janaka Fernando, Head of Department of Business Economics, Faculty of Management Studies and Commerce at the University of Sri Jayewardenepura said so in the backdrop of widely spreading fear that skilled migration will have overwhelmingly negative effects on Sri Lanka.
Exclusively speaking to The Island, he said,” The Sri Lankan talent pool which has found stable doing business and improved living conditions in developed countries can be lured to shift or relocate their operations in Sri Lanka if the policymakers correctly identify their capacities, interests and their patriotism.”
“A fair share of this Sri Lankan talent pool in those countries would come back home to start new businesses in their motherland if the authorities make the domestic environment conducive to professionalism, startups, incubator nest hubs, industrial parks etc.,” he said.
The following are some excerpts from the interview with Dr. Fernando.
“Brain drain isn’t a new phenomenon in Sri Lanka. It has been in existence for more than six decades and it occurred in different ways at different stages of our history. The diaspora includes all communities of the country, not only Tamils as erroneously interpreted very often. With the gaining of Independence from the colonial masters in 1948 and with the advent of the Sinhala Only Act in 1956, economically and administratively active European descendants who had made Sri Lanka their second home left the country for good.
Subsequently, in the first few years of 1970s when the features of a closed-economy were dominant in the country, many professionals including doctors, engineers and lawyers left Sri Lanka to live and work the in the West. I would be remiss if I didn’t mention the legacy of what came to be known as Black July in 1983 where Tamil separatists had stepped up militant attacks in the North killing 13 soldiers, and over the next few days, some members of the Sinhalese majority took revenge causing havoc around the country. This unfortunate turn of events led to a mass exodus of educated members of the Tamil community to other countries.
And in the 1990s-2000s when bomb blasts were taking place and the country engaged in a war to crush terrorism, another wave of Tamil professionals departed from Sri Lanka. Around this time, universities had been closed for three consecutive years from 1986 to 1989 due to political unrest and many students from affluent families left the country to pursue their higher education in foreign countries. So, this is a brief overview of how migration happened in the past. And today, we are witnessing the largest-ever exodus of qualified professionals as a result of the deeper implications and consequences of the current economic crisis.”
“You see, this time the brain drain is starkly different from the past scenarios and you cannot really blame the people going out because who does not want to improve standard of life? However, I think this situation has a silver lining too. If the policymakers take advantage of the often-overlooked aspects, the brain drain could be turned into a win-win situation for the country as well as the skilled migrants in the medium to long term.”
“Not only in Sri Lanka, the migration of skilled workers is a persistent trend in many developing countries, and therefore, as a country we need to look at how we can strategically attract skilled migrants to come back after some time and make Sri Lanka more attractive to international capital investment as well as an oasis for knowledge industries which are based on intensive use of technology and human capital.”
“We need to understand that migration takes place because of push factors in Sri Lanka and pull factors in the receiving countries. So, the authorities must avoid measures to limit or tax skilled migrants’ decisions to leave the country because it goes against the democratic norms of the country and the fundamental freedom of choice. Instead, the authorities should facilitate them to migrate because these skilled professionals are privy to most updated technologies and best work practices in those countries.”
“Let’s not forget that many of our professionals abroad have built purposeful connections and networks in these advanced economies, therefore, Sri Lanka can leverage this ‘brain circulation’ for its rapid development and economic growth. If we harness it properly, it can trigger a flow back of knowledge, new technologies and foreign direct investments (FDI) to the country.
If we can entice at least a small percentage of the Sri Lankan diaspora to come back and operate from Sri Lanka, they will have the capacity to form the back bone of a new economic order especially by innovating lucrative products for the global ICT marketplace. So the government must work towards the goal of providing them with amenities similar to what they would get in the foreign lands they go to. If we can do this, we will be able to attract back at least a few of them who have the true transformative capacity to help Sri Lanka in its growth journey.”
“Already without any government intervention, a few individuals of Sri Lanka’s patriotic diaspora have shifted their base back home because they identified the favourable opportunities in Sri Lanka. Virtusa Corporation founded by Kris Canekeratne, WSO2 founded by Dr.Sanjiva Weerawarana, CodeGen founded by Dr. Harsha Subasinghe, Orion City founded by Jeevan Gnanam, for example, have earned a lot of name and fame for what they are specialized in and have become foreign currency revenue earners to reckon with, in their respective fields.
They interconnected their operations to Sri Lanka driven by their own passion and passed the benefit to the county regardless of little support from the policymaking side. But such passionate volunteering by the Sri Lankan diaspora needs to be spurred by the government without much delay. The government can take a cue from India in this regard and introduce a special visa category for the diaspora members, and create tech hubs and science parks to facilitate them to bring their operations to Sri Lanka. When such visionary entrepreneurs come, other professionals also will see that the country is doing all the right things to achieve its full growth potential, and they will also jump on the growth bandwagon,” Dr. Janaka Fernando said.
Sri Lanka still ‘under test’ before it can receive crucial second tranche from IMF
by Sanath Nanayakkare
International Monetary Fund (IMF) staff concluding their visit to Sri Lanka yesterday reaffirmed their support to Sri Lanka to move out of the ongoing economic crisis, but did not specify an exact timeline for releasing the second tranche of its Extended Fund Faculty (EFF) arrangement to Sri Lanka.
The IMF mission team led by Peter Breuer and Katsiaryna Svirydzenka that visited Colombo from September 14 to 27, is yet to be convinced that it has received a robust programme from the Sri Lankan authorities where they indicate how they would be addressing the persistent revenue shortfall besides outlining progress in foreign debt restructuring which would give Sri Lanka a breather to balance its financing requirements as it starts to repay its foreign debt.
“We had constructive and productive discussions with the Sri Lankan authorities on economic performance and policies underpinning the first review under the IMF Extended Fund Facility (EFF) arrangement. The people of Sri Lanka have shown remarkable resilience and the authorities have made significant progress on important reforms. The discussions will continue towards reaching a staff-level agreement in the near term that will maintain the reform momentum needed to allow Sri Lanka to emerge from its deep economic crisis, Peter Breuer said.
“The objectives of the IMF-supported program will continue to focus on restoring macroeconomic stability and debt sustainability, while protecting the poor and vulnerable, safeguarding financial stability and stepping up structural reforms to address corruption vulnerabilities and unlock Sri Lanka’s growth potential, he said.
However, the press briefing given by the IMF team yesterday signaled that they needed to see more economic and financial policies to support the approval of the First Review of the program under the EFF arrangement.
“Sri Lanka has made commendable progress in implementing difficult but much-needed reforms. These efforts are bearing fruit as the economy is showing tentative signs of stabilization. Inflation is down from a peak of 70 percent in September 2022 to below 2 percent in September 2023, gross international reserves increased by $1.5 billion during March-June this year, and shortages of essentials have eased. Despite early signs of stabilization, full economic recovery is not yet assured. Growth momentum remains subdued, with real GDP contracting by 3.1 percent in the second quarter on a year-on-year basis and high-frequency economic indicators continuing to provide mixed signals. Reserve accumulation has slowed in recent months, he said.
Speaking further Peter Breuer said: “Sustaining the reform momentum is critical to put the economy on a path towards lasting recovery and stable and inclusive economic growth. The authorities have met the program’s primary balance targets and remain committed to this important pillar of the program so as to support their efforts to restore debt sustainability. However, revenue mobilization gains – while improved relative to last year – are expected to fall short of initial projections by nearly 15 percent by year end, in part due to economic factors.
“The onus of fiscal adjustment would fall on public expenditure if there were no efforts to recoup this shortfall. This could weaken the government’s ability to provide essential public services and undermine the path to debt sustainability. To increase revenues and signal better governance, it is important to strengthen tax administration, remove tax exemptions, and actively eliminate tax evasion.
“Against continued uncertainty, it also remains important to rebuild external buffers through strong reserves accumulation. Building on the Central Bank of Sri Lanka’s success in controlling inflation, refraining from monetary financing will help keep inflation in check. Other challenges include maintaining cost recovery in electricity pricing.
“The government has made steady progress on structural reforms. Key legislations passed in Parliament, including the new Central Bank Act and the Anti-Corruption Act, could improve governance if implemented effectively. The IMF Governance Diagnostic report would inform future reform measures to strengthen governance when published.
“A new welfare benefit payment scheme was enacted with new eligibility criteria that aims to improve targeting, adequacy, and coverage of social safety nets. To ensure financial stability, steps were taken on conducting bank diagnostics, developing a roadmap for addressing banking system capital and liquidity shortfalls and improving the bank resolution framework.
“The authorities have also made headway on regaining debt sustainability through the execution of the domestic debt restructuring and advancing discussions with external creditors. As Sri Lanka is restructuring its public debt which is in arrears.
“Executive Board approval of the first program review requires the completion of financing assurances reviews. These financing assurances reviews will focus on whether adequate progress has been made with debt restructuring to give confidence that it will be concluded in a timely manner and in line with the program’s debt targets.
“Discussions are on-going, and the authorities are continuing to make progress on their plans for revenue mobilization targets, anti-corruption efforts, and other important structural reforms.”
The IMF team held meetings with President and Finance Minister Ranil Wickremesinghe, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, State Minister Shehan Semasinghe, Chief of Staff to the President Sagala Ratnayaka, Secretary to the Treasury K M Mahinda Siriwardana, and other senior government and CBSL officials, during the visit. The IMF team also met with parliamentarians, representatives from the private sector, civil society organizations, and development partners.
‘Imposing minimum room rates on five star hotels could ruin tourism sector’
By Hiran H.Senewiratne
The imposing of a minimum room rate on five star hotels on the basis of a recent gazette notification is actually killing the industry. Room rates, accordingly, could henceforth rise to between 80 percent and 100 percent, top travel and tourism industry expert Chandana Amaradasa said.
“The minimum room rate of a five star hotel currently comes to about US $ 65 but with the new gazette notification it would go up to US $ 170 per day. But our competitors, such as, Thailand, Malaysia and Vietnam are maintaining a minimum room rate of US$ 80 to US$ 85, Amaradasa told The Island Financial Review.
Amaradasa said that the tourism industry is just picking- up and ‘this type of move is detrimental to the entire sector because these room rates are normally determined by demand and supply and not by gazette notifications.
Amaradasa added: ‘At present, Colombo five star hotels are mainly patronized by Indian tourists, corporate clients and MICE tourists. This will not only impact hotel revenue but the outside supply chain as well. Nowhere in the world is the tourism industry regulated in this manner and this would enable our competitors, such as, Vietnam and Thailand to attract tourists.
“As a long term consequence, some of the airlines could also pull out of Sri Lanka and hotels will halt recruiting new staff and training them with the limiting of their revenue sources.’
ADL’s journey continues: Unveiling new offices in Indonesia and Malaysia for tech excellence
Axiata Digital Labs (ADL), the renowned technology hub of Axiata Group Berhad, is proud to announce the grand opening of two new offices in Indonesia and Malaysia. These strategic expansions, respectively, mark significant milestones in the company’s journey since it’s inception in 2019. This signifies ADL’s unwavering commitment to revolutionizing the telecommunications industry and propelling the global rate of digital transformation.
The inauguration of these state-of-the-art offices exemplifies the dedication ADL has towards expanding its footprint and harnessing the power of innovation across Southeast Asia. As the first CMMI 2.0 Level 3 IT organization in Sri Lanka and an ISO-certified company, ADL is well-positioned to lead the charge in transforming traditional telcos into techcos through its groundbreaking Axonect Product Suite.
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