QUEST FOR BALANCE
- Our CountryVanity, Sanity and Reality
Prepared for the 32nd National Conference of the Institute of
Chartered Accountants (ICASL), Sri Lanka
Anila Dias Bandaranaike
21 October 2011
1
Basic Premise
A Nation strives to improve the
quality of life of all its citizens
through sustainable development
that uplifts human well-being
As Sri Lanka strives, how do we
“balance” our development?
2
What is Human Well-being?
• Material Well-being - food, clothing, housing,
economic services, physical health, clean
environment
• Intellectual Well-being - educational, professional,
aesthetic, cultural pursuits
• Emotional Well-being - freedom of thought,
speech and beliefs, family, community, personal
safety, mental health
Human well-being requires material needs as well
as intellectual stimulation and emotional security.
3
Reality - Sri Lanka’s Resources
•
•
•
•
•
for Physical , Intellectual, Emotional Well-being
Island: national security, beautiful beaches, harbours,
ocean resources, strategic location
Land: mostly arable, mostly flat, accessible mountains,
plentiful water, nutrition, easy road/air/sea access
Cultural: rich, diverse traditions of Sinhala, Tamil,
Muslim, Burgher heritage
Religious: teachings of 4 great religions - Buddhism,
Hinduism, Islam, Christianity
Communication: 2 ancient languages (Sinhala, Tamil)
and global business language (English)
New Era - end of 30 years of terrorism and conflict
4
National Priorities
in our Quest for Balance
•
•
•
•
•
•
Achieve – our potential by ethical means
Safeguard – our rich multicultural heritage
Maintain – unity in our diversity
Preserve – our natural environment
Share – leisure with family and community
Enjoy – living in harmony and health
Our Country’s potential is unlimited –
Develop it with wisdom and balance!
5
Current Reality – Material Well-being(a)
1973 2010
Category
na
89
Housing-owned/rent free
na 86-92
Housing-permanent floor, walls, roof
Electricity
Safe water
Sanitation
8
46
59
85
88
90
TV
Telephone
Poverty Headcount (26% in 1996)
0
1
na
80
77
8.9
(a) Share of Households with access
In 2010, Samurdhi provided 1.6 mn families Rs.9.2 bn , while 1.8 mn
migrant workers remitted USD 4.1 bn (Rs. 465 bn) to Sri Lanka
Current Reality – Regional Disparities
Southern
Sabaragamuwa
North Central
Eastern
Uva
Northern
Central
Western
North Western
Province
Share of GDP
45 10 10 10
6
5
6
5
3
Share of Households
27 13 13 13 10 6
7
6
5
Monthly Household
Expenditure-Rs,000
42 26 28 29 26 29 25 24 26
Poverty Headcount
4
11 10 10 11
•Strongest disparity between WP and others
7 15 14 13
Source: DCS HIES 2009/10
Current Reality – Intellectual Well-Being
Category
Population growth rate-%
Dependency ratio-% (a)
Life expectancy-yrs
Infant mortality/ ‘000
Secondary Education or higher
LFPR-%
Unemployment-%
1970 2010
2.1
1.0
88
66
48
34
61
73
10
71
35
19
49
5
• Free
preventive
and curative
health
services
• Needs of
aging
population
rising. Private
health care
expanding.
• In 2010, 61% eligible, but only 10% could enter Free
State Universities. Opinion divided on Private Universities
• State provided 14 % of employment in 2010.
• 1.8 mn migrant workers equal about 20% of labour force
Current Reality – Emotional Well-being
•
Terrorism no longer a threat, but inadequate trained
professionals to treat post conflict mental trauma
•
Rising political thuggery, gun culture, underworld
violence – do police, courts protect citizens?
•
Balanced language policy, but no minority rights in
practice – for official letters, notices, court proceedings
•
perceived apathy on reconciliation issues – e.g. excessive
army presence , weak inclusivity in North development
•
Self-defeating attitude to criticism – attacks on local
media personnel and offices, poor diplomacy to counter
international hypocrisy
Current Reality – Summary
• Material Well-being? - Sri Lanka a lower-middle income
country with national socio-economic indicators at upper
income levels. But regional disparities high, aging burden
rising
• Intellectual Well-being - Good basic indicators. But
mismatch between education and labour market with poor
access to tertiary education
• Emotional Well-being? - Significantly improved when
conflict ended. But, inadequate resources to address postconflict trauma and minority rights in practice, while
freedom of speech and personal security questionable
Good progress on economy and material well-being, but
need to balance with intellectual and emotional well-being
10
Current Reality - Structure of Economy
1970 2010
Sector
28
12
Agriculture
24
29
Industry
Services
Total
48
100
59
100
• Agriculture share declining,
Services increasing, as
economy develops
• Minimal change in Industry
share
•Efficient services needed to
fuel growth in other sectors
•More and better services
required as household needs
expand with higher incomes
Our Country Today – The Reality
Development model targets material well-being
• Provides for infrastructure to improve regional
economic access
• Focuses on “Hubs” in Services sector to grow
• Advocates private participation in development
• Encourages foreign employment to raise foreign
earnings and reduce unemployment
• Overlooks environmental implications of chosen path
• Pushes chosen path by discouraging alternate views
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Sri Lanka’s Economy
Past Reality vs. Future Vanity or Sanity?
Indicator
Per Capita GDP-$
1983- 2008 2009 2010
2011
2014
Target Target
335 – 2,014 2,057 2,399 2,794
4,190
Investment: GDP
22 – 29
24.4
27.8
29.5
34.0
National Savings: GDP
14 – 24
23.7
24.7
25.8
32.3
0.9 -17.1
5.9
7.3
6.0
5.0
5.2
3.5
8.0
8.5
9.5
6.1 -12.7
9.9
7.9
7.2
4.8
68-109
86
82
80
67
11.6 - 28.6
19.0
15.2
13.5
14.3
Inflation
GDP Growth
Budget Deficit
Debt :GDP
External Debt Servicing
Targets based on post-conflict optimism that investment-led,
infrastructure-led, consumption-led development will generate
revenue to meet government’s expenditure and debt-servicing
Current Focus – Vanity or Sanity?
1. National Policy Targets and Performance
• Can we expect private investment with expanding role
o f state and armed forces in economy?
• Can we achieve investment and growth targets on low
credibility with investors?
• Can we boast of high external reserves built on rising
market borrowings?
• Can we reduce budget deficit and maintain debt, debtservicing targets with rising state employment and
current borrowing trends?
• Can CBSL intervene to maintain current interest and
exchange rates and also sustain growth targets?
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Current Focus - Vanity or Sanity?
Following on positive developments,
– Are we on a balanced path to our medium-term
development goals?
– Can sanity overcome vanity to rectify perceived policy
inconsistencies?
– Will Sanity overcome Vanity to gain credibility with
investors and other stakeholders?
– Will Vanity prevent the Sanity of realistic performance
evaluation and public pronouncements?
– Does Sri Lanka balance attitude, nationally and
internationally?
Current Trends – Vanity or Sanity?
2. Emphasis on foreign employment
• End to civil conflict, but no end to out-migration, brain
and skills drain
• Retirees returning, but middle management and young
skilled workers leaving
• Government policy encourages migration
• Inadequate options, incomes and challenges to retain
trained and untrained Sri Lankans
• Declining HR capacity to deliver on Sri Lanka’s postconflict development targets
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Current Trends – Vanity or Sanity?
Do state and citizens balance options for and
against living in Sri Lanka today?
Will Vanity prevent the Sanity of recognising the
inconsistency between meeting Sri Lanka’s HR
needs and pushing foreign employment?
17
Current Focus – Vanity or Sanity?
3.Show-casing Sri Lanka as “Emerging Wonder of Asia”
• Can 20 million people and environment cope with 2.5
million tourists? Why target numbers – not $ earnings?
• At current migration, labour force entry rates, are
500,000 jobs in tourism by 2016 realistic; also, targets
for BPO, IT sectors, as envisaged?
• 2nd international airport, Hambantota seaport,
International sports venues - True benefits vs. colossal
costs to Sri Lanka?
• “Hype” vs. performance (e.g. Gas) – “Walk the talk”?
18
Current Focus – Vanity or Sanity?
Is there balance in our show-casing of Sri Lanka’s
potential as the “Emerging Wonder of Asia”?
Will Vanity prevent the Sanity of clarity,
consistency and credibility, when show-casing
our future?
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Current Trends – Vanity or Sanity?
4. Emphasis on money and material well-being
• What money can buy drives lifestyles
• Monetary gains, not professional standards, drive most
businesses
• Non-communicable diseases linked to stress rising
• Globalisation and unrestrained marketing, not facts,
influence food habits; also lifestyles
• Energy, water and waste disposal under strain with
“development”
• Rising noise, water, air pollution, traffic congestion with
“development”
• Do those who make “big bucks” enjoy optimal well-being?
20
Current Trends – Vanity or Sanity?
Is there balance in our use (and abuse) of resources
for “development”?
Will Vanity prevent the Sanity of valuing our nonmaterial advantages and conserving our resources?
Despite improvements in material well-being, is there
balance towards achieving total human well-being?
21
How do we regain our Balance?
• Recognise Reality
• Avoid Vanity
• Maintain Sanity ……
to ensure that Sri Lanka’s development will be
sustainable and uplift human well-being
22
Thank You
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