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Sunday, 24 August 2014

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PPPs vital for economic growth

The more the private sector moves out of the Western province the more will the regional economy be vibrant, NDB Director and Chief Executive Officer Rajendra Theagarajah told a forum on Public-Private Partnership (PPP) organised by the Postgraduate Institute of Management (PIM) last week.

The PPP forum is a precursor to a series of programs the PIM plans to embark on to strengthen private-public cooperation for accelerated economic growth.


Dr. Lloyd Fernando accompanies Minister Sarath Amunugama to the forum.                                                               Pic: Vipula Amarasinghe

Theagarajah said that development has been confined to the Western province and added that it is time to pass on the benefits to the periphery with vibrant private-public sector partnerships.

The age old myth that the private sector is the engine of growth was dispelled at the recently concluded Sri Lana Economic Summit by a top Lankan bureaucrat who redefined the concept that if the private sector is the engine of growth the public sector is the driver of the engine.

The Rs. 450 million joint venture wind power project in the North is a good example of promoting regional growth. Sri Lanka Telecom is a classic example of a sound private-public sector partnership which has proved the power of collaboration that could turn unsound balance sheets to profit-making win-win situations for both sectors.

"Before the privatisation of SLT, its balance sheet was unsound but the banking and finance sector went beyond the balance sheet and provided loans which has today paid dividends as a model of private-public collaboration," Theagarajah said.

He said that the power sector is a monopoly of the State, but power generation is done by the private sector. For years the private sector had lamented over terrorism in the country.

Today, the situation has changed and there are ample opportunities for it to take advantage and drive growth with the support of the public sector.

The Ceylon Chamber of Commerce conceptualised the theme for this year's economic summit to achieve a per capita income of US$ 7,000 by 2020. This target could be achieved with vibrant PPPs.

Growth is here to stay but it has to be inclusive and not exclusive. It should blend with diversification of exports and port sector development.

The economic summit also stressed the importance of mapping out future education policy for economic growth.

The NDB Bank signed an agreement to provide loan schemes for graduates and post-graduate programs which will help institutions such as PIM to expand its scope of education.

Senior Minister and Deputy Minister of Finance and Planning, Dr. Sarath Amunugama said that the private sector in Sri Lanka has opportunities to expand in an unprecedented manner given the end of terrorism and the creation of a sound macro-economic environment combined with an inflation rate at a single digit level and low interest rates.

The notion that the State must do everything has been a terrible failure. It proves that private-public cooperation is vital for efficient management and sound public administration. The world is looking for collaboration where the State must create an environment for PPPs.

Today, we are ending a phase and exploring private-public partnerships in institutions. The Colombo Port is a good example of private-public partnership. The government is looking at a model where the State will retain ownership of a 51 percent stake in institutions and vest the rest with the private sector management.

"No country could act as individual economies in a globalised economy. If Sri Lanka is to go beyond an agricultural economy to an industrial economy and gain a comparative advantage it has to build strong public-private partnerships," Dr. Amunugama said.

"We need to make full use of the comparative advantage as in the case of India and China that is transferring investments to make full use of its resources. The private sector alone cannot compete in the global environment," he said.

"The State has a role to play in facilitating a conducive environment for trade and investments. Infrastructure development such as roads, ports, airports are vital for PPPs," Dr Amunugama said.

He said that the private sector has not taken proper cognisance of the advantages in a global competitive environment.

Except for a few blue chip companies, a large number of private sector entities have not taken the comparative advantage of Sri Lanka seriously.

PIM Acting Director Dr. Ajantha Dharmasiri said that the private sector is the engine of growth and the public sector is the gear box of the engine and added that alone is not sufficient and there should be a good driver which is the political leadership.

The PIM has launched a series of programs to bring together private sector managers and public sector administrators to achieve greater awareness on public policy.

Public sector leadership is vital for a vibrant private sector leadership.

The PIM has sought support from the Treasury to set up a centre of learning excellence in South Asia. The m-learning and e-learning technologies will help boost academic excellence.

PIM is the first to get ISO accreditation and it will be the first to offer full time MBA programs for students in South Asia.

PIM Program Director, Public Policy, Dr. Lloyd Fernando said that the Public Policy for Business Leaders program will help strengthen PPPs and create more interest in widening knowledge on public policy and added that the PIM is in a unique position to cater to private sector managers and public sector administrators.

 

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