“We are here to stay. I am a great believer of Sri Lanka. What happened on Easter Sunday is certainly tragic but I think the country has seen worst in the past when I first invested in Sri Lanka. I am confident that Sri Lanka will put 21 April behind and move on resiliently. Positives of Sri Lanka far outweigh the negatives of Easter Sunday setback,” Binod told the Daily FT in an exclusive interview.
CG Group has investments in the tourism sector in Sri Lanka via 16 hotels including the Taj Samudra, Colombo and has plans to locally manufacture cement.
He was optimistic that tourism can bounce back within a year. “But I am more focused on whether the industry can quickly regain the momentum it enjoyed prior to 21 April. Why I am stressing this is that after decades of conflict and struggle, Sri Lanka tourism was shaping up very well in the past few years. The skyline was rapidly changing and Colombo was bustling with big global brands coming in,” he recalled.
“People were prepared to come with serious money for investment. I don’t want that situation to die down. We must ensure that pre-Easter Sunday momentum, sense of international confidence is brought alive,” Binod added.
It was pointed out that FDI as a percentage of GDP in Sri Lanka is only 2% and there was potential to increase it to 5%. “Sri Lanka was on course hence the country needs to get back on track. There was an extremely positive vibe in Sri Lanka prior to 21 April. That momentum mustn’t be dampened,” he added.
Binod acknowledged that post-Easter Sunday setback the Government took many measures to improve security and safety as well as support the tourism industry with moratorium and concessionary working capital.
“I don’t think that is enough though I appreciate the financial difficulties of the country and the Government or the banking sector. At the same time the attention of political leadership is also tilted towards forthcoming elections. Elections in a democracy are a natural progression. Some will come, some will go away and some may come back based on people’s mandate,” he opined.
“However I honestly feel the priority and focus of all politicians, public servants, private sector must be on a quicker revival of the economy given the setback from the Easter Sunday attacks. I don’t think there needs to be a quarrel on this urgent need of today but come together in the country’s interest. There is no reason why all cannot unite and give that much needed confidence to the private sector and the international businesses who continue to invest, market Sri Lanka,” Binod emphasised.
The head of the CG Corp Group which has over 170 companies and 76 brands and employs over 10,000, pointed out that terrorism is a global challenge and Sri Lanka is not an exception. “The world, the international traveller and the business community want to see a united Sri Lanka at all levels – political parties, the private sector in overcoming this challenge and reviving Sri Lanka. Such a course of action will boost global community and investor confidence on Sri Lanka. This is the need of the hour,” Binod said.
He said that post-Easter Sunday the tourism industry and several other sectors have taken a serious beating. “So unless these businesses are rescued they and the country cannot be taken to the next level. Their entire energy will be spent on managing day-to-day to battles. These are extraordinary moments requiring extraordinary responses,” he stressed.
He recalled that the subprime crisis in the US forced authorities and the people to forget which company belonged to whom but rally around and extend help jointly to get over a terrible socioeconomic situation.
The only mantra the US Federal Reserve had at that time was pumping money wherever it was needed. The priority was to regain and sustain the momentum putting behind any blame game to a latter time. A similar response helped East Asia recover from its worst crisis as well. Today Sri Lanka needs to do exactly the same, Binod noted.
He was of the view that the State can pump in the money to the economy or restart projects that are stalled due to external adverse factors. This, he said, will help regain and spur the momentum and continue with the growth.
“I understand a popular excuse is the Government or Sri Lanka doesn’t have the resources but I am sure if there is sincere determination, funds can be found as Sri Lanka has plenty of friendly countries globally,” he said adding that Sri Lanka’s debt repayment track record to date is unblemished. “Debt isn’t a bad thing as long as it is invested in the right projects,” he said.
Binod also believes Sri Lanka must have a firm stand that it will not allow any of the projects which are mid-way or interests of those investors who have taken a call on the future of Sri Lankan economy be it local or foreign, are not jeopardised. “That is the statement that both international and local businesses wanting to hear,’ he emphasised.
The CG Corp Group Chief also suggested Sri Lanka’s private sector needs to be more proactive. “For my friends in the private sector who are resilient and also tolerant I stress that there are times when they have to rise, get united, and if required bang the table and fight for your rights. This time post-Easter Sunday setback requires just that response from the private sector because if not done there is much to lose,” he pointed out.
Binod said that the challenge is not about surviving but growing at the desired momentum. It is also not just about whether Sri Lanka will get 2 million tourist or 1.5 million tourists this year but the ideal pace at which the industries can grow regaining the confidence and momentum that was there originally.
He said that in the past Sri Lanka’s economy grew by 5-6% and in recent years and quarters it has struggled averaging between 3% and 4%. “So as a country the challenge is to breakout from the 4% level to seek 5 or 7% growth as a developing nation. This needs sustained efforts and consistent policies,” he said.