• Psychological barrier on travelling to SL broken
• SL makes statement to 650 million global viewers that it is open for business.
• Investing on brand building must be done when the awareness is high
• 1st mega post war event must be fol lowed up by private sector initiatives

Working against all odds

I yet remember in the height of the ground operation against the LTTE in 2008, the government decided to stage the first Industrial Exhibition in Jaffna so that the south will begin to engage the North and there by avoid the LTTE instigating the people of Jaffna. There were three of us appointed to champion this project. It was a challenging task given that all logistics had to be done by sea or air because the A9 was not accessible at that time due to heavy fighting. The event attracted 304,000 people from the Jaffna peninsular and 168 companies from Colombo.

A Mobitel official was told that a mobile phone at Rs.5000/- was not the need for the youth of Jaffna but a 45,000/- one. The Private sector realized the potential that Jaffna peninsular had to offer. The event resulted in many company’s setting up business and today, they are reaping the benefits by the first mover advantage. The event broke the fear psychosis that the LTTE had very cleverly orchestrated for years and to my mind IIFA did the same for Sri Lanka. We made a statement to the world that Sri Lanka is open for business. If not, it was only rhetoric from our side that things were normal but from an outsiders point of view it needed justification. This is what IFFA did. 450 media personnel were there. BBC covered some components live. Aljazeera had eight segments dedicated to the event while CNN also telecasted same which gives us an indication of the exposure that Sri Lanka received.

Let me share one more key event that happened during the height of the war. It was in 2008 when a core team of us under the leadership of the Sri Lanka Tourism Bureau championed the first ever Hikkaduwa Beach Fest. There was many who bickered but the event attracted 17,000 revelers into the beautiful beach stretch of Nari Gama where all hotel rooms were booked in the vicinity during the five day event. The economy was injected with over 120 million rupees and the team delivered a positive cash flow from the event. Today, this event has carved out a niche in South Asia as the ‘Party Beach’ for a youngster which is now on the Global tourism calendar for youth. Today, ‘Hikka Beach Fest’ is not only a strong brand in Sri Lanka but also in South Asia. Similarly IIFA in my judgement is only the beginning for more iconic events to be staged in Sri Lanka. What is required now is to pick up the learning’s from the healthy debate that we see in the media and not get demotivated with adverse publicity.

IIFA

Coming from a multinational brand marketing background, when I saw the media outburst during the weekend on why Sri Lanka spent 850 million rupees in staging ‘IIFA’ I felt it is my duty give definition in to this event so that Sri Lanka will appreciate how such events fit into the template of ‘Reviving Brand Sri Lanka’. If I may take a parallel is the launch of Etisalat which bombarded the media in the early part of the year which sure beat the IIFA press. But, that’s what it takes to make a brand in todayworld. Some can always argue that Etisalat should never have indulged in such extravaganze but that it what takes to make a statement to a focused market.

The people who champion such events must know that certain sections of the general public appreciate the work that is been done. Post this event we must now capture the learning’s and reach higher ground. I will not be surprised if Sri Lanka one day host events in the stature of ‘Miss Universe’ or key business events like the ‘World Economic Summit’ given that we have the experience of staging a event such as IIFA. To be honest Sri Lanka has placed it self well and is strongly poised to bid for bigger events in the future.

Urgent Issues

But I will be failing in my duty if I do not mention that from a macro end there are some fundamental changes that are required in the country. We have to reduce the fiscal deficit from the current 9.7% to below 5%. But the good news is that Q1 this year it is 2.1% which is encouraging. However, focusing on privatizing the loss making state enterprises that shave of 45 billion or 1% of GDP and curtail some of the subsidies will have to be high up the country agenda. But these changes need to be done gradually so that social unrest does not happen. I would strongly recommend that privatization must be started with the profit making state ventures so that with the momentum created the more difficult ones can be attended to.

On the other hand, we also need to move the country up the ladder in the ‘Global competitiveness index’ from the current 105 ranking to be within the first 50 so that we create the enabling environment for global companies to invest in Sri Lanka. However, we need to keep in mind that these are tough calls. However, it can be done now with the new found stability of the government which has a 2/3rd majority. But it must be done at the right time. If not there can be many social ramifications which can be harmful given the increasing cost of living.

Whilst these structural changes are in the pipe line, we need to also build Brand Sri Lanka. We should not wait for the fundamental changes to be done to start global brand building. This is where I believe IIFA helped set the stage. What is required now is for the private sector do the follow up initiatives. Namely inviting the celebrities for key outlet openings, new adventure tourism initiatives so that we ride on the relationship established. The good news is that the 1st step has been taken. Before writing these thoughts I checked around with my private sector colleagues and termed this piece "IIFA opened our eyes on 7 key fronts".

No 1: Being Pragmatic

As the great Mahathir Mohomed last week mentioned in Colombo, the essence of the success of Malaysia is that it took decisions with pragmatism rather than just following western business models. He went on to say that, it is only a Sri Lankan that can feel the vibes of the local community and the culture that it fosters. Hence, what ever decision that is taken must be in this perspective than pleasing global super powers.

If we were to examine the visitor arrivals for the first five months it is clear that India leads the board with a record 10,686 visitors at a growth of 87.6 percent. However, whilst Sri Lanka is an attractive destination for some Indians there is some apprehension in some quartets of India that needs to be neutralized. IIFA helped Sri Lanka reach up to them and make a statement. Vivek Oberoi been out spoken on this front said it is these kinds of events that can reach to the under privilege namely the IDP’s.

The 300 homes that Salman Khan launched was yet another project that can help change the attitudes of this segment of people in India.

The psychological principle called Congruity theory is what underlines how positive stimuli can move neutral or negative attitudes among people is exactly what IIFA helped Sri Lanka achieve.

No 2: Investing to gain

Currently media is highlighting the expenditure of hosting IIFA. Some even highlighted road improvements and room allocations and the like. The fact of the matter is that without investment one cannot build a brand. The good news is that the private sector sponsored some of the costs partly. We must also note that Sri Lanka is emerging after a long period of war and there are many improvements that will be required to make Sri Lanka conducive to be tourism friendly. IIFA was only the beginning. Let’s accept it.

If I may take a parallel, China incurred a cost of 40 billion dollars when it staged the Beijing Olympics. Almost 26 billion dollars was spent on improving the Transportation which included railway hubs, new railway lines, improvements to the Beijing subway and Tiajin expressway which actually had no links to the Olympics. But what China did was to strategically improve infrastructure to cater to the 540 million who had come into the city for work in the urbanization process. They used the Olympics as its vehicle for doing such infrastructure upgrades.

Sri Lanka must do the same, and use every event to make its infrastructure consumer friendly and event friendly. Some can argue that when the country’s borrowings are high should one follow this strategy. But as I see it, we are in a catch 22 situation. We have to do the improvements to drive business into the city whilst we need to bring down the fiscal deficit. It needs to be managed. By the way India’s fiscal deficit is also at a high of 86% of the GDP but the economy is growing at eight percent growth which is interesting economic model.

No 3: Private function

This to me is one of the key learning for Sri Lanka. There is a buzz in Colombo that there were many VVIP invitees that did not get invited or it happened in an incorrect way. Sri Lanka needs to wake up on this matter. This event was a private function that was only staged in Sri Lanka. If one wanted to be part of the event payment should have been the mode of operandi. If one had gone for IIFA one would realized that most of the show was infact in Hindi and if one did not know the language you would have been bored.

If I am to draw a parallel, I remember when I was heading a multinational detergent company I receiving a call from a seven star property in the Maldives wanting for an urgent task to be done. A team was flown to do the task and it was after almost a month that we got to know that the guests who had leased the whole island was Michael Jackson and Brooke Shields with their entourage. There were no photographs at the airport, no meetings with politicians. The cost per night per chalet was $2875 dollars. The Island was booked for fifteen days and there were thirty chalets. Sri Lanka is not far away from catering to a jet set life styles that the country will attract. But the million dollar issue is that Sri Lanka must respect the privacy of such events and let the country benefit at large.

No 4: System Friendly

If Sri Lanka is keen on becoming a serious venue for international events then we have to stream line the financial regulations and the Administrative regulations so that it will not be a typical public sector organized event. May be its best that a private-public partnership organization be set up to cater such events so that decision making is quicker and scrutiny post the event does not happen due to political reasons or ideology. May be ROI based culture can come in so that its only internal and it does not have to dragged to public eye like what is been done in the case of IIFA.

We saw a similar situation un-earthing in India with the IPL-GATE but it was controlled by the government so well that the 4.1 billion dollar brand was protected. May be, its time that Sri Lanka pick up some learning’s from the IPL fiasco and manage this brewing media hype.

No 5: Infrastructure other than roads

Another emerging fact is that Sri Lanka must invest on infrastructure other than roads so that we can cater to the strategies of the private sector. It can be the Katunayake-Colombo highway, Waste management in Kalpitiya, Water systems in Kuchchaveli and Paskudah to name a few. We also need to provide concessionary loans so that hotel rooms developers. In the current business model unless a room is priced at 300-400 dollars one cannot break even at a decent time period that will be attractive to a private sector developer. The fifteen year pay back model will not work in my view.

If I may bring in a parallel at a recent discussion with the Minister of Tourism in the Maldives, it was revealed that the government of Maldives is looking at a business model where one villa will be offered to any resort developer free of charge, provided that ten houses are build in the city for social housing. Sri Lanka needs to launch similar creative strategies if we are to solve this infrastructure issue in the country.

The logic being Sri Lanka’s national debt is at 86% of GDP from the 16% that existed in 1948. Malaysia’s debt status is at 46% of GDP even thought the overall GDP deficit shot up to 11.3% in 2009 which incidently is way higher than Sri Lanka. On the other hand Sri Lanka’s debt burden being 86% of GDP is worrying given that roll on debt is increasing. We also need be careful given that the external debt is at 36.5% as against a country like Malaysia which is at 2.9% of GDP. Hence, we see that Sri Lanka must be careful in its thrust on infrastructure development whilst pursuing the growth agenda.

No 6: Social Fabrication in North

At the IIFA Global Business Forum Dr. Sashi Tharoor made some cutting edge statements on the social fabrication of the returning population into the Vanni. It’s important that this be addressed this aspect so that we will not have these statements again at an International forum.

The good news is that 50,000 houses will be build as per the Sri Lanka-India heads of state meeting in New Delhi last week. We now need to drive up livelihood activities so that the social fabrication of life can be spruced up and there by we ensure that the re emergence of a movement like LTTE will never happen.

But a point that the world forgets to understand is that many of those who lived in the Vanni during the times of the LTTE were in very low hygiene situations than what it is today.I yet remember the time when we were sending essential items from the south to the Vanni I always made sure that the Kilinochchi chambers publish the maximum retail selling prices so that the LTTE cannot exploit the vulnerable people of Jaffna. But I must state that this was adhered to with a fax from the Kilinochchi district chambers and endorsed by the LTTE at that time. May be now the agricultural sector must be developed together with the vocational training institutes so that we drive this community to be active stakeholder’s of the Sri Lankan economy. Vivek Oberoi’s visit to Kilinochchi to be part of the weddings that took place of the ex LTTE combatants was a very strong gesture that speaks well of the bondage that was built during IIFA.

No 7: Cancer of Terrorism

The key front that dawned on us due to the IIFA was the continued global support towards the cause of the LTTE. All it took was the 198 Hindi Cinema halls that are there in South India that was used to barter against the final assault that Sri Lakan security forces did to liberate the country from the clutches of terrorism. My take from this is that, we must ensure that we keep the pressure to protect Sri Lanka from the cancer of global terrorism.

I would strongly recommend that the SAARC anti terrorism unit be set for our part of the world so that once a quarter the key personalities can meet and discuss the issues related to national security given that South Asia is fast becoming a heaven for terrorism.

At last weeks anti terrorism conference in Colombo, James Cockayne of the Center for Global Counter Terrorism Co-Operation said recent research reveals that there is a strong link between terrorism financing and organized crime. This includes drug trafficking, extortion and kidnapping. I guess the new payment methods such as electronic transfer of funds adds to the complexity of managing this cancer that is spreading around the world. This clearly explains the point that LTTE’s profit and loss statement at one time was $200 million on the positive that gives us an idea of the strength of this operation together with ground fleet of airplanes, submarines and forty thousand hard core trained cadres. This is what Sri Lanka broke through and ended the trail of blood shed in Sri Lanka that the world must understand. Specially the South of India.

The point I am highlighting is that we need to as a nation maintain the 3-4% GDP spend on defense spend if we are to keep our land free from terrorism in the future. Especially given that South Asia is fast emerging as the hub for terrorist activity.

Conclusion

Hence we see that IIFA opened up our eyes from many fronts. I have discussed only 7 of them. There can be more for sure. But the important thing is not the debate but addressing them as a matter of priority. A key point to note is that in the 1st two years post a war, a country cannot expect serious investment. It never happens. As per the theory of diffusion the innovators come and go just like what happened between the time period 2002-2004 when the cease fire was in operation in Sri Lanka. When I was heading the Government Economic Council I remember sharing this with the then President of Sri Lanka and her response was the private sector needs to drive the speed of investment flow. Which is so true. It is only after this incubation period that the serious investors begin to visit the country. They are called the Early adopter category.

Hence just because Mukesh Ambami did not come does not mean IIFA did not meet its objective. What’s more important is to focus on the follow through with invites to the stars that came for events such Arugambay International surfing championship, Official inauguration of the famous Blow Holes off Matara or a Tea train in the outskirts of Thalawakelle or even a night safari in Yala.

The next film of Saman Khan been filmed in Sri Lanka is good news which means the follow up is already happening. Vivek Oberoi attending the ex combatants wedding celebrations last Sunday in Killinochchi means that Sri Lanka already seeing the positive rub off IIFA . May be the likes of Mukesh Ambani that will be the guest speaker the Institute for Professional Organizations will be next.

The challenge is for Sri Lanka to understand the importance of the positive vibes that we demonstrate today. Whilst we correct the fundamental issues like the fiscal deficit of 9.7% and improving the Global Competitiveness ranking from the current 107 position. We have to invest on Brand Building. Criticizing every move of those who champion key initiatives for the country is not what Sri Lanka require now.

~ www.island.lk ~ By Rohantha Athukorala