Need of the hour:

Coordinated strategy for growth and development

by Minister Mahinda SAMARASINGHE

Sri Lanka stands upon the threshold of a new era in its modern history.

Today, we are poised to take off economically, socially, culturally and even politically as we seek means of advancing as a Sri Lankan people and a united Sri Lankan nation. After the resounding military victory over terrorism that we achieved in May this year, President Mahinda Rajapaksa’s leadership has enabled all Sri Lankans to take command of our individual and collective futures. This offers great potential but also risks and challenges. If we do not move forward with resolution and speed, the new vistas that could have been opened to us may yet prove illusory.

To my mind, the need of the hour is collective and cohesive thinking and a coordinated strategy for growth and development that is sustainable as well as being equitable. If we are to double our projected economic growth as envisaged by the Central Bank from the present forecast levels of 3.5 percent to the projected seven percent in 2012, we need to adopt strategies that will enable us to exploit the unlimited possibilities that the defeat of terrorism has created. To do this, increased inflows of investment and sound economic management are hugely significant. Attracting increased investment and remittances from overseas investors, expatriate Sri Lankans and migrant workers is a key component of the Government’s approach in this connection.

We also need to gradually change the profile of our expatriate workforce from semi-skilled to more skilled levels. Other potential areas for rapid growth include tourism and exports, information and communications technology and education.

The socio-political changes envisaged after the military gains that are being personally led by President Mahinda Rajapaksa’s reconciliation initiative which also includes democratisation and political inclusion and the empowerment of people who had no democratic voice nor the space to express themselves under the forcible domination of the Liberation Tigers of Tamil Eelam, will all come to naught if we do not secure economic stability. This is why we need to move forward contemporaneously on many fronts, chiefly the economic front.

To achieve our national aims, it is very necessary that we have a strong and vibrant private sector. We need to encourage entrepreneurship at all levels.

Large-scale public sector investment in rebuilding the conflict affected areas is already under way. While this must be supported by greater savings and more business activity, the Government is committed to creating an environment that is more harmonious and conducive to private-sector growth.

The current global economic crisis has shown us the need for strong legal and regulatory frameworks that enable oversight by Government as well as encouraging self-policing by the business and financial world. The crisis has taught us that unchecked economies guided by neo-liberal inspired ideas of “limited government” can have unintended and disastrous consequences for even the strongest of economies. As in all things, we must strike a balance between freedom to do business and socially responsible governance if we are to achieve desirable and required outcomes for the Sri Lankan people.

We also need to be mindful of the recovery effort from possibly the worst of human-made disasters - internal conflict and strife. While it would be overly simplistic to assume that there is one answer or approach to resolving the many issues and challenges thrown up by the post-conflict phase, there is no gainsaying the importance of economic renewal in conflict-affected areas and in the rest of the country. The Government has maintained throughout its humanitarian operations that it views the mere provision of humanitarian assistance insufficient.

Rapid development has always been a goal of the Government as part of a durable solution to the problems and challenges we face. The transition from dependency to self-reliance among Internally Displaced Persons (IDPs) is essential. Mere livelihood support is not what is required. It is the opening up of new avenues of income and providing options to them that is critical. For this reason, the provision of physical infrastructure, government services - especially civil administration, schools and hospitals, as well as a secure environment is key. The maintenance of law and order and the guarantee of physical security is vital. Above all, creating a consciousness of constructive partnership and mutual confidence among the diverse parts of Sri Lankan society must be accorded the highest priority.

National Action Plan

I mentioned security as essential, to highlight some of the challenges we have to face in restoring normality. Human security in its broadest sense encompasses both freedom from fear and freedom from want. Freedom from fear connotes guaranteeing physical security. This does not merely mean removing physical threats such as de-mining and removal of unexploded ordnance (UXO) from the former theatres of conflict. It also means addressing and forestalling future threats to peace and security. In this context, the rehabilitation of nearly 11,000 persons becomes extremely necessary.

However, we realised mere counselling and training does not completely remove the risk. We need to adopt a holistic outlook and view the reintegration of these people into society, socially as well as economically. For this reason we started conceptualising and preparing a National Framework Proposal on the Reintegration of Ex-combatants into civilian life well before the end of the conflict in August last year. My Ministry led this initiative which was initially supported by the International Labour Organization.

Together, we have further developed a National Action Plan on Reintegration with support of a range of stakeholders based on the Framework. The United Nations Development Programme joined us in providing support and technical inputs into the process. Maintaining our vigilance against possible acts of destabilisation in the North and the East as well as in the rest of the country, is also vitally important.

The monolithic LTTE as we knew it is no more and we owe a debt of gratitude to the Security Forces and Police for their efforts in defeating this ruthless organisation. We also need to recognise that their job is still not complete and appreciate and cooperate with law enforcement and security services in fully restoring normality and civilian life throughout Sri Lanka. I mentioned de-mining in passing. There are sizeable tracts of land that are still to be fully cleared of mines and UXOs. The Sri Lanka Army, together with several other agencies supported by international organisations and our bilateral partners, is leading the effort and is working tirelessly to support the resettlement effort and economic renewal.

This brings me to the second component of human security. This is freedom from want. It does not mean mere survival, but an adequate standard of living. This is largely dependent on development and economic growth which I referred to at the start of my remarks. An allied concept, also related to my previous comments is the right to development. This connotes the right to participate in development - planning and executing development projects - as well as to enjoy the fruits of development on an equitable basis.

Education for IDPs is a priority

Development takes me back to the point I made about growth and the private sector’s role in supporting it.

Corporate citizenship is a concept that defies simple definition. Investors use an internal definition including transparency, governance and corporate or business ethics as key citizenship elements. Still others define it as the full range of both internal and external corporate activities that contribute to the well-being of society; those which embrace the related concepts of sustainability and Corporate Social Responsibility (CSR).

Sustainability means meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Corporate Social Responsibility refers to the scope of business’ accountability to stakeholders. Issues arise relating to defining the boundaries of responsibility in the context of financial accounting to investors. Accounting practice draws a narrow boundary around business activities and accounts only for those economic resources which the business deploys or controls and their associated benefits or costs. The boundaries of corporate responsibility, though somewhat amorphous, are being redrawn to consider externalities such as pollution and to include stakeholders outside the immediate economic activities of a business, such as the wider society.

The existence of multinational corporations in the larger context of globalisation has complicated the citizenship agenda, which increasingly includes supply chains across geopolitical boundaries. The developing preponderance of opinion is leading to the belief that aligning and integrating corporate citizenship with the firm’s core business objectives and strategies will generate long-term sustainable value.

Tax breaks

I am not one who believes in the cynical viewpoint that CSR is just another means of securing tax breaks, while gaining advertising mileage for a business. I believe in Sri Lankans’ innate desire to help their fellow beings and I do not believe that a business imbued with a Sri Lankan character would have any other philosophy. I was pleasantly astonished with the outpouring of generosity that met two crises that affected Sri Lanka in the recent past. The tsunami of 2004 and the displacement of some 280,000 Sri Lankans held by the LTTE and rescued in the first five months of this year were met with such an empathetic response that it must have astounded the world. The corporate world was also part of this collective effort to help.

But it does not take a crisis to bring out the best in people. Your winners have shown that in the ordinary course of doing business it is possible to do something positive that transcends the stringencies of the legal and regulatory framework which governs the conduct of business.

Corporate governance and economic contribution are also critically important in this time of global meltdown. Issues surrounding remuneration and transparency are also very relevant in contemporary Sri Lanka as elsewhere in the world.

Investment that is sensitive to national imperatives such as balanced regional development and the uplift of communities that are disadvantaged is also a criterion that is particularly praiseworthy. Another issue that needs to be addressed is corruption. Business is seen as one of the key elements of this global phenomenon. Representing the supply side of corruption, businesses must be sensitised to the corrosive and deleterious consequences of corruption on national economic growth.

It is no wonder that there is a close correlation between indices which show countries with high incomes and development and other indices which measure perceptions of corruption. The least corrupt countries are invariably those that are doing the best economically. Corruption leads to poor decision-making which has a negative impact on development and growth. It is heartening to note that several Sri Lankan businesses have joined the United Nation’s Global Compact against Corruption. This is an area where the public and private sectors must work together to address a critical challenge.

What catches my imagination, particularly as a former Minister of Labour and Employment, is your category based on employee relations. Treating your own workforce with fairness, respect and dignity is no more than common sense.

However, exploitative labour practices driven by blinkered capitalist single-mindedness has for too long been the dominant mindset of business. A committed and dedicated human resource pool is undeniably the biggest asset any entity can have.

I would like to remind you that today - December 10 - is Human Rights Day.

We are celebrating this important event not only in Colombo and Kandy, which saw the main events being conducted, but also in Vavuniya and Jaffna. My Ministry, to mark this significant occasion, is announcing the coming to fruition of two key initiatives during this month. We have developed a National Action Plan for the Promotion and Protection of Human Rights and a draft will shortly be shared with the public for comment. It is our expectation that implementation of the National Action Plan from next year will help us make significant improvements in the level of protection of human rights in this country. We also hope that this initiative will provide part of the contextual backdrop within which concessions such as GSP+ can be negotiated and secured.

In 2005, President Mahinda Rajapaksa, in his manifesto contained in the Mahinda Chinthana proposals, pledged to draft a constitutional charter of rights in keeping with the Universal Declaration of Human Rights and other conventions on human rights to which Sri Lanka is a party. After intensive consultations across the board, a committee of experts has now finalised a first draft which we will be placing before the people and inviting their participation in the process of finalisation. The draft contains not only civil and political rights, but also the full gamut of economic, social and cultural rights.

The above is the address made by Minister of Disaster Management and Human Rights Mahinda Samarasinghe at the Best Corporate Citizen Awards Ceremony 2009 organised by the Ceylon Chamber of Commerce on December 10.