09Th – 15Th August 2010 FCCISL News Alert Weekly Business Highlight 09Th – 15Th August 2010
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09th – 15th August 2010 FCCISL News Alert Weekly Business Highlight 09th – 15th August 2010 Content Page 1. DEVELOPMENT ECONOMICS 1.1 Making of Philippines the Tiger Cub Economy of Asia 05 1.2 Post-crisis, China faces challenges of success 09 1.3 Govt keen on CEPA 12 1.4 Hambantota Harbour Dream come true 13 1.5 WB releases report on reshaping economic geography of Sri Lanka Wednesday, 15 2. INVESTMENT 2.1 Technology needs investment 18 2.2 EPF investing in stocks creates wealth for members 19 3. MANAGEMENT 3.1 How to prepare for a job interview 23 3.2 Relevance lost in Management Accounting 26 3.3 Theory of 80:20 28 3.4 How to do ‘qual’ research 29 4. TRADE & MARKETING 4.1 Exhibitions and benefits for participants 34 4.2 International trade and organizations 36 4.3 Why we can’t stop shopping 40 4.4 Top price for Uva Highlands 42 4.5 Ethical marketing for competitive advantage 44 5. MONEY & BANKING 5.1 Rates slip 48 5.2 Co-operative Insurance Company : Reliable and respected business entity 49 6. TOURISM 6.1 Tourism needs a viable brand 52 6.2 Tourism is booming: are we ready to meet future demand? 54 2 FCCISL News Alert Weekly Business Highlight 09th – 15th August 2010 7. EXPORTS 7.1 Haycarb scouts for coconut shells 59 7.2 Spice exports: Value addition key to achieve targets 60 8. STOCK MARKET 8.1 Bourse expected to be volatile while market corrections take place 63 8.2 CSE falls, stays down 65 8.3 SMB extends profitable run into 2010 first half 67 8.4 CSE on a correction; analysts say will recover soon 68 8.5 CSE leaps up on rumours 69 8.6 Bourse fails to sustain Tuesday’s rebound 71 8.7 Turnover slumps below Rs.1 billion 72 8.8 US stocks fall sharply as investors’ gloom grows 74 8.9 Is there a right way to regulate stock markets? 77 8.10 Freewheeling stock markets 80 9. BUSINESS 9.1 Is your great idea a real business? 83 9.2 Success for entrepreneurs 84 9.3 Are you a leader over-stepping boundaries? 88 10. EMPLOYMENT 10.1 Professionals heading to India 91 10.2 Global youth unemployment rate rises 93 10.3 Youth unemployment at highest recorded level, says ILO 94 3 FCCISL News Alert Weekly Business Highlight 09th – 15th August 2010 Development Economics 4 FCCISL News Alert Weekly Business Highlight 09th – 15th August 2010 The Island – August 9, 2010 MEETING WITH FIDEL V. RAMOS MAKING OF PHILIPPINES THE TIGER CUB ECONOMY OF ASIA By Rohantha Athukorala - Show people reality. - Provide people with their basic needs. - Educate the youth on how to make money. - Meet the business community every Friday. - Demonstrate ‘A moderate life style’ to the people. - Have a frank discussion with the media weekly. I had a once-in-a-life-time opportunity of being part of a discussion via satellite with the former President of Philippines His Excellency Fedel Valdez Ramos. He was considered to be one of the most respected Presidents the Philippines has had. At a mature age of 64, he was characterized by the economic boom, technological development and political stability that he championed for his country. But the one thing that captured my interest was his simplicity with regards to solutions though the challenges he faced were daunting. Let me capture the key observations I made during our interaction. Observation 1: Hands on Leadership –solved the power crisis In his first year of office, he was able to win over to his side a majority of people whilst developing the confidence of the people in the government. Ramos earned this, in my view, by way of a strategy—hands on leadership. For instance, when he took over the country there was an acute power crisis. He got congress to enact a law where specified constitutional powers were given to the President to solve a crisis. Thereafter, he single-handedly drove a team of experts in issuing independent power production licenses to construct power plants within 24-months. Ramos solved the power crisis by 1994. I guess Sri Lanka will need this single-handed iron fist to solve the garbage crisis in the city that is creating severe health issues, including the spiraling deadly dengue outbreak. On the key business opportunity of tourism, given that building a 5 star room costs almost five million, unless room rates reach $200-300 dollars breaking even will be a tough task. Hence, a better option is to target 1.5 million tourists, than the 2.5 million, and invest moneys in creating awareness and drive up the image of the country with its wide product offering. This would help drive our room rates up from the current $80 to $150. In my view this would be a more practical target for Sri Lanka given that 99% of the industry is private sector let. With this strategy, investments to increase room capacities would naturally happen. 5 FCCISL News Alert Weekly Business Highlight 09th – 15th August 2010 Observation 2: Breakfast Meetings – 33 meetings a year Under Ramos’s Presidential leadership in Philippines during a given year he had a minimum of 33 meetings with the business community. He believed in a process of empowering people and creating an inclusive growth model in solving the economic and social problems that had been growing for years. This strategy resulted in foreign investors pouring money into the country in the key strategic sectors of Power, Telecommunication, Banking, Insurance, Shipping and oil industries. This holds true for Sri Lanka too. The November budget is crucial to bring in radical reforms similar to the onea we saw in 1977. We have to ensure that policy reforms will help us move up the World Competitive Report rankings. If not, attracting FDI’s and driving 40% investments from the current 28% will be only a dream. If we do not drive reach this 40% target, we as a nation, cannot achieve an 8- 10% GDP growth in the years to come. On economic policy, a key attribute that I observed in Ramos was his consistency of policy that he maintained right across his tenure of office. This gave confidence to investors to take Philippines seriously. I guess this is why Ramos was nick named ‘Steady Eddie’. Sri Lanka needs to take a que on this, as we have highlighted repeatedly for this irregularity in many a forum. Observation 3: Corruption is a disinvestment A very strong trait that I observed in the strategy of Fidel Ramos was that he adopted an approach to chase after corruption. He set up a Presidential Anti Corruption Unit whose mandate was fact finding. Thereafter this data was transferred to a decentralized ombudsman who took the case to a close. The strategy worked. Ramos was successful in implementing a sea change of economic reforms in a country that was once a closed economy. A point that I must highlight is that in my tenure of working for the public sector, I have come across many people who were committed with a strong ethos for honesty. The best case in point, is that of Mobitel’s Uphara scheme, targeted to the public sector, has zero bad debts. This same behaviour is seen in the consumer durables industry such as Singer, where in easy payment schemes the least default rate is in the rural areas of the country. The highest is in the urban areas. Hence it’s important that we do not build perceptions in a generalized manner. In fact, the latest research reveals that the most corrupt in Sri Lanka is the private sector. That’s where the correction needs to begin, in my view, and not the public sector as most perceive. Observation 4: Lead a moderate life –Wife yet worked One of the staggering revelations the former president made during the interview, was when he said that his wife continued to work at the International School of Business in Manila during his presidency. Ramos went on to say that his wife used to bring home a higher salary than he did. His advice to Young Leaders who were connected via satellite was to be physically fit and mentally alert as in todays world a leader is like a juggler on a high-wire where a ball cannot be dropped. But he went on to say, that we should make sure we had our feet firmly on the wire even if it is thousands of feet from the ground. In relation to Sri Lanka, a strange phenomenon that I have seen is that the people who appear in the glitzy Hi magazine are seldom the top 200 executives of Sri Lanka, but a specific cocktail circuit crowd. I guess this gives a signal to youngsters about leading a moderate life even if one is in the driving seat of business. 6 FCCISL News Alert Weekly Business Highlight 09th – 15th August 2010 Observation 5: Show reality to the people –drive reality A strong statement made by Ramos was that he always maintained constant communication links with the people of Philippines on the lines of "show reality" and drive reality perspective. Under his leadership, he powered the Philippines economy to become one of the most stable economies in Asia, enjoying strong economic growth and the best in the Far East. The Philippines stock exchange in the mid nineties was among the best in the world. May be a que for Sri Lanka is that we must not flash data such as per capita income of $2,000 plus and the attractive 7% plus GDP growth numbers as this is skewed to the western province.