Up­wardly Mo­bile

Sri Lanka is a good ex­am­ple of gov­ern­ment-en­tre­pre­neur co­op­er­a­tion as a num­ber of new business ven­tures have emerged after the civil war ended.

Southasia - - CONTENTS - By If­fat Alam

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.

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