Sri Lanka is a good example of government-entrepreneur cooperation as a number of new business ventures have emerged after the civil war ended.
Sri Lanka is a good example of government-entrepreneur cooperation.
Sri Lanka is the fastest growing economy in South Asia with a projected growth rate of 7.8 percent in 2014. The rate in 2013 was 7.3 percent. With a shrinking budget deficit, it is expected that Sri Lanka will attain the growth rate of 8 percent in 2015. Considering the progress the Sri Lankan economy has made during the last few years, it is difficult to imagine that the country successfully defeated a 26 year long civil war hardly five years ago in 2009.
While the credit for the country’s economic turnaround mainly goes to the policies of the Sri Lankan government, which focused its attention on the revival of the economy as soon as the ethnic strife ended, the role played by entrepreneurs in providing durable support to the economy can’t be ignored. In addition to boosting the domestic market, Sri Lankan entrepreneurs have also been pivotal in increasing the country’s exports.
Entrepreneurship is regarded as an important component of developing economies. Entrepreneurs have proved that they have the potential to start and run successful businesses and provide jobs to millions if they are promised business friendly policies and minimal interference by the government. Sri Lankan entrepreneurs are working in a wide spectrum of industries such as edible oil manufacturing, clothing, gems and jewelry and packaging. However, the sectors which are most likely to attract investment are clothing, gems and the tea industry. Although the government of Sri Lanka has offered maximum support to the new business people, it is not immune to problems that are a hallmark of all new enterprises.
The biggest hurdle is lack of funding. As most entrepreneurs tend to start their business enterprises with their own money or by taking loans, the biggest risk is that of failure. The aversion to taking risks stops many an ambitious people from going any further. However, those who are daring enough get positive results in the long term.
The Sri Lankans are fortunate
as many associations in the country are working incessantly to encourage people who want to start a new business. The Ceylon Chamber of Commerce and Youth Business Sri Lanka are examples of organizations that are striving to support emerging businesses. The advent of entrepreneurship has also given birth to a new phenomenon – ‘angel investors’. The term refers to an affluent individual or a group of individuals who are willing to provide the initial seed money for a business start-up, “usually in exchange for a convertible debt or ownership equity.” Sometimes, a small number of angel investors form a group or networks to pool their investment and provide advice to their portfolio companies or clients.
Despite the initial hurdles, Sri Lanka provides a relatively encouraging environment to motivated individuals. In addition to financers, there are a number of awards to commemorate the hard work and achievements
of entrepreneurs. For instance, The Sri Lankan Entrepreneur of the Year Award is an initiative of the Federation of Chambers of Commerce and Industry of Sri Lanka to recognize and reward “outstanding and enterprising people.”
In its 19th year, the effort regards entrepreneurship as the “most important factor responsible for identifying and organizing resources and effectively utilizing them in the production process.” At this year’s Asia Pacific Entrepreneurship Awards 2014, 36 Sri Lankans were honored for their services. First held in 2007, the APEA is now presented in 16 markets across Asia, making it the largest and broadest award of its kind in the region.
A number of Sri Lankan entrepreneurs have made a mark on the country’s economy with their unique business models. Selyn is one such company that was founded in 1991 by Sandra Wanduragala. The company, which makes home textiles, garments and toys on handlooms, started with 15 women in the village of Wanduragala in Sri Lanka and now has nearly 1000 members. Selyn’s uniqueness lies in its being Sri Lanka's only ‘fair-trade’ company. Fair trade is a trading partnership that seeks “greater equity in international trade. It contributes to sustainable development by offering better trading conditions and securing the rights of marginalized producers and workers.”
Another example is that of cosmetics manufacturer ‘4ever Skin Naturals’. The company was established in 2006 by Chandhani Bandara, one of Sri Lanka's leading hair and beauty experts. It is now one of Sri Lanka's largest herbal based cosmetics manufacturers with a portfolio of over 70 products. It has also entered the international markets in Asia and Europe recently.
While entrepreneurship has done wonders for the Sri Lankan economy, it has also contributed to women empowerment in a significant way. A large number of women who started their business ventures are now making their presence felt on the national, and in some cases international, economic horizon. Otara Gunewardene is one such woman who realized the potential of the retail industry and opened a proprietorship by the name of Odel in 1989. Otara singlehandedly managed Odel for over two decades and is credited to be ‘ the first female entrepreneur to take her company public in Sri Lanka.’
While Odel is a high-end brand, there are many female entrepreneurs who are making a name for themselves in their chosen fields. Sharmila Kudagoda is running ‘Brilliant Brides and Salon’ – a venture that provides a full range of bridal services and all types of beauty care and treatment to women. These female entrepreneurs, who started with a humble setup are now financially independent and are also providing jobs to hundreds of people who work for them. They contribute to the economy by paying taxes as well as by exporting their goods to international markets.
Sri Lanka will continue to produce highly motivated entrepreneurs if the government continued with its businessfriendly policies and the market forces that matter keep rewarding the efforts of entrepreneurs.