(Translated by Akitha Wijayasinghe)
Sri Lanka has to earn more income to recover from the current economic crisis, Economic Analyst, Advocate, and Chief Operating Officer, Dhananath Fernando, said.
Speaking to Medialk.com about the challenges Sri Lanka is facing this year he said the country needs to look at new avenues to make money.
Sri Lanka needs more income
“We have the question of how we can achieve the economic growth rate that Sri Lanka lacks. In order to move the country forward, we all need to earn more. That means there should be a way for money to reach the people. For such money to come, someone’s expenses must become someone else’s income. Therefore, if someone spends, another person will be able to make an income.
Since Sri Lanka is a small country, it is difficult to imagine that people within Sri Lanka would be able to spend more and earn more within the country itself. Because our market is quite small, all we have to do is turn the expenses of other people in the world into our income. That is why exports are important. If the people of the world spend more on cinnamon in our country, it can become our income. If people spend more on clothing, we can turn it into income.
That’s basically the challenge we have when it comes to increasing revenue. We need to grow our economy rapidly to increase revenue. At present it is around 82 billion USD and we need to further develop it. What we are saying is that our country is going to develop with the increase in our per capita income. If we are to achieve this development goal, it is important to adopt methods that can generate revenue. In reaching that goal, we have a number of issues to address.”
The need for more dollars
“Basically, as a country, we are affected by the debt problem. If we achieve economic growth, the debt crisis will be resolved to some extent. It takes about $ 4.5 billion a year to pay off the debt. We will need such money for another five years, which is needless to say, a lot of money. What we earned from Hambantota port by leasing it in 2018 is about 1.2 billion USD.
It takes about four times that amount to repay the loan for a single year. It takes 16 times the revenue from Hambantota to repay the remaining four years as. That means a lot of money. If we earn the dollars we need, we will be able to get some relief. There are several ways to do this.
One way is to earn as export earnings, another way is remittances from foreign countries, or it can be obtained through foreign direct investment. The main problem with debt repayment is that we do not have to pay our debts with our own currency. We have to pay it in dollars. For that we have to earn dollars.”
The need to increase efficiency
There’s another thing I see. That is, our efficiency. None of the work we do as human beings in Sri Lanka is highly efficient. That means we spend a lot of resources and time to accomplish small things. What we need to do is increase efficiency in every field. Great efficiency is required in everything, be it the field of agriculture or the service sector, we need a boost in efficiency.
Let me give you an example so that everyone can understand this. If we take a bus, there is a driver to drive it and a separate conductor to issue tickets. In other countries, there is usually no conductor for the bus. The driver is the one who charges the money. In other countries a bus is driven by one person. But in Sri Lanka two people are needed for that. In that sense we have wasted labor in vain.
That means we are very inefficient. Someone can point out that two people get jobs this way. Something more productive can be done other than giving two people jobs in this manner. That is the opportunity we have lost through this. In our agriculture, in our cultivation, in our services, there is inefficiency in all this. Inefficiency is not just about corruption and fraud. They are also part of the inefficiency.
But if we can eliminate inefficiency in this way, there will be an opportunity to climb up. One of the things we need to focus on in order to achieve our economic growth in the long run is our efficiency. Without that we will not be able to carry out an economic revolution.”
“We are still lost”
“We are not in an optimistic position when it comes to technology. Because we all think that now we have the internet, use smart phones, use Facebook, so it is technologically advanced. But a digital person needs to connect with the world. There has to be a connection with the digital world beyond using smartphones. For example, look at the problems caused by climate change in agriculture.
We can find a solution to this with digital technology. There is a big gap between the use of digital devices and the idea of digitizing the economy.
The world is now in the fourth industrial revolution. But Sri Lanka is still in the midst of the second Industrial Revolution. The first industrial revolution began with the introduction of steam-powered machines. The second Industrial Revolution began with the use of electricity to power machines. The third industrial revolution took place with the introduction of information technology.
Starting to use artificial intelligence is called the fourth Industrial Revolution. Sri Lanka is still in the era of the second Industrial Revolution. This is why it is so important to use digitization to move forward.”
“Don’t waste resources on myths”
“When we follow a myth, our resources are wasted. Suppose, for example, a lie was told that a rock started emitting an aura. People go to see it. The media makes time for that. Scholars take the time to talk about it. All of this is a waste of time for people to think creatively. All the manpower, time, fuel and air time spent on advertising is wasted.
This is especially true in South Asian countries. Getting caught up in these things is a huge waste of resources and time. It ultimately affects the development of the country. Therefore, we need to pay attention to this as well.”
“Work with a proper understanding”
“We must all work with some understanding of this year. There are times when sadness and happiness come in different forms. This is a difficult time. If we spend that difficult time in the right way, we will have a successful career. In order to manage this time properly, we need to move away from unnecessary things and move forward with knowledge. We can win if we give up things that waste resources like myth and move on to the Fourth Industrial Revolution.”