Sri Lanka has to take advantage of the rising global wealth particularly in China and Japan and Europe?
by Victor Cherubim
President of Sri Lanka, Gothabaya Rajapaksa stated at the State Opening of the 4th Session of the 8th Parliament on 3 January 2020: “I love my country. I am proud of my country. I have a vision for my country,” No Statesman of any country has ever proclaimed it in so many words.
Exactly, what then is happening in Sri Lanka today with a change of President, a change of Government and perhaps, a change of approach.
So, it seems we are on the move from the days of the political, economic and social dysfunction and uncertainty of the past “Yapalanaya” Government, which the people sought so eagerly and voted for change.
Seemingly gone are the days of tamashas, the public display of the photo of the President adorning State buildings, the wearing of the “kurakkan” shawl, the Presidential Police Escort, the pomp and ceremony of mounted Police, the pageant of the salute before the State opening of Parliament, the postponement of the State visit to China, among others for another day, plus the prohibition of re-export of essential spices.
In keeping with the times of mounting burdens without calling it austerity, things are being done differently, other than the swashbuckler of calling things to order by using the law to take its course of action against miscreants, in this case of two ministers of the previous Government, to show the public, that the Government and the Judiciary are seemingly independent. Taxes were reduced. A new Governor the Central Bank appointed. All this, in the matter of two months.
Perhaps, it is too early to make a judgment on a new way of governing.
As many will know so much of what drives the Government is subliminal.
Investors were hoping to retreat with this new era. They were wanting to take their profits and run. Tourist arrivals declined in December 2019, the incessant rains over the past month had put a damper not only holiday movement, but also on the price of vegetables and there was clamour for the rice “mudalali’s to be put in the spotlight.
The re-bounding of the economy
For a value investor, such discipline, such a condition, assurance, risk management, call it what you may, is soothing to his ears. Small wonder why there seems to be a rebound in confidence.
Small wonder also why Pakistan and Japan sent their Foreign Ministers post haste to meet President Gothabaya, and past the Ambassador of Russia to Sri Lanka and current Foreign Minister of a Big Power Russia, Sergei Lavrov scheduled to meet the President on the 13 January 2020 in Colombo, whilst the burning issue of the escalation of conflict between United States and Iran is smouldering.
What can Sri Lanka now do?
Are we on the cusp of a new era of global diplomacy with Sri Lanka, a small island, being involved as a Power Broker?
What can we do to change things to move from a debt burden economy to a new era of confidence of not only investors? Governments? and Manufacturers?
Sri Lanka has to take advantage of the rising global wealth particularly in China and Japan and Europe?
All these countries have an ageing population. There is going to be, in the not too distant future, a premium on wealth preservation that it seems likely that the people in these lands will want not only to visit as tourists, but as residents for some part of their twilight years.
Wealth is portable and we in Sri Lanka should seriously and sincerely take note of that portability and prepare for it. The desire to hold wealth in a safe and secure environment Is not merely a dream, but will increase as the world grows richer in the 2020’s.
We must also perhaps, be aware of the manufacturing slowdown in China, the resultant backlash of India’s new immigration policy. We need,if not must to be prepared to be able to accept the assembly of motor manufacturers and IT components in Sri Lanka, as an outsource nation in the next twenty years or so.
As we move from an export-oriented basis to an assembly of manufactured goods basis, in the future, there will be smart investors wanting and willing to take the risk to move their investment capital. Thus, our present debt could well be a blessing in the future.
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