Year ends on a positive note:

Corporates optimistic about 2013

by Lalin Fernandopulle

Rohantha Athukorala	Lalith Kahatapitiya	Jayantha De Silva	Rohan Fernando

Ending the year on a positive note, top corporate personalities said despite many challenges such as the global economic crisis business performance was satisfactory.

Vice President South Asia and Managing Director IFS Sri Lanka Jayantha De Silva said the IT BPO industry did better this year than in 2011, with a major contribution to the economy of the country. The global IT BPO industry is too vast to attract at least one percent of the world business.

"A large number of IT BPO companies were formed in Sri Lanka in 2012. There is ample scope for many small scale companies to enter the industry. It is optimistic about 2013 which the company hopes will be a stepping stone to reach the US$ one billion target by 2015.The government should realise the potential of the industry and support it through a national plan", De Silva said.

Heladiv Group Chairman and National Chamber of Exporters Past Chairman Rohan Fernando said 2012 was one of the most eventful years in the global economy.

The continuation of the world recession which emerged in the latter part of 2008, the Arab Spring spilling over to Syria and its consequent effects, trouble brewing in Egypt, the Iranian embargo, the collapse of the Greek economy and bailout packages necessitated by EU countries are some of the main events that dominated the global economic environment.

Although expectations were high on the emerging out of recession it did not happen during 2012. As USA is key to this equation, job and wealth creation in the US to spur buying power has a long way to go. The theory, "World produces and America consumes" is now a dangerous option as after much time, the US has realised that it needs to produce at home to overcome the economic impasse.

Among all countries the Asian region, and especially, Sri Lanka did quite well to record a good improvement in GDP partly due to the North-Eastern sector helping boost the economy after recovering from the scourge of terrorism.

The resilience of the private sector of Sri Lanka is a noteworthy point when analysing the economic activities of the country and especially the export industries and services contributing over eight billion USD to the national economy.

"When we approach 2013, the problems which dragged the global economy are still very much present but the shift in global power towards Russia and China and to an extent India, has a favourable effect on Asian countries, especially, Sri Lanka. Another region coming out of poverty is the African continent led by Egypt, South Africa and Libya. These countries, hopefully will achieve a peaceful environment to boost economic activities and thereby fill part of the vacuum created by the European depression", Fernando said.

For the tea export industry, there are new opportunities in the regions and these countries and hopefully the hardened and well tempered tea marketeers will find new leads to expand their scope provided the GOSL will create the right policies to do so.

Overall, the new development-oriented budget presented by the Government in November 2012 and the ambitious infrastructure development undertaken by the Government will usher in a new era of nation building through substantial gains in economic activities.

Head of National Portfolio Development Sri Lanka and the Maldives UNOPS Rohantha Athukorala said 2012 was a challenging year for many organisations given the downturn in the EU and the US but the private sector continued to be resilient with policy reforms being introduced by the public sector.

"2013 will be a tough year given the drop in the third quarter GDP growth to 4.5 percent and the political economy that is taking form globally", Athukorala said.

KIK Group of Companies Chairman Lalith Kahatapitiya said despite the ups and downs business expanded in 2012. We are optimistic about business growth in 2013.

Sri Lanka's Gross Domestic Product (GDP) increased 4.8 percent in the third quarter this year compared by 8.5 percent growth in the corresponding period last year.The agriculture sector contracted 0.5 percent in 2012 against a 6.5 percent growth in the corresponding quarter of the previous year; while its industry sector grew 7.3 percent against a 10.8 percent growth in 2011. The services sector grew 4.6 percent down from 7.8 percent in 2011.

The Asian Development Bank in its Outlook for 2012 and 2013 states the dimming global growth prospects and soft domestic demand in the region's two largest economies are slowing the pace of developing Asia's expansion. Growth is now expected to slide from 7.2 p.c. in 2011 to 6.1 p.c. in 2012, with a bounce back to 6.7 p.c. in 2013.