Sri Lanka can learn from Hyderabad to strategise its economic turnaround: MTI
8 months ago
According to MTI Consulting, Sri Lanka is facing a “perfect storm”, a concurrence of multiple socio-economic challenges that has dealt an unprecedented blow to the country. “This is also a great opportunity to dismantle incremental legacy strategies. In doing so, go ‘ground zero’ and approach it as building an entirely new economic model,” said MTI Consulting CEO Hilmy Cader. Inspiration for this could be taken from Winston Churchill who said: “Never let a good crisis go to waste.” MTI Consulting opined that Hyderabad (the capital of Telangana State in India) can be a learning ground for Sri Lanka in embarking on the challenging tasks of turning around its battered economy. In 1997, when Bill Gates visited Hyderabad, then-Chief Minister Chandrababu Naidu convinced him with a strong value proposition that Hyderabad is the place to do business. The following year, Microsoft opened a software development centre that started the turnaround of the then-Andhra Pradesh (now Telangana) economy. Today, it’s a globally recognised hub for information technology (IT) , information technology-enabled services (ITES), and pharmaceutical sectors, with exports of $ 20.05 billion, which has grown at a compound annual growth rate (CAGR) of 11.32% in the last 10 years. At current prices, its gross state domestic product (GSDP) is $ 167.82 billion, which has grown at a CAGR of 12.3%. The state attracts approximately 83 million domestic tourists each year. “The key learning points that Sri Lanka can obtain from Hyderabad is to have a compelling and competitive value proposition – and of course delivering on it – and convincing big global tech players to make promising and serious investments in Sri Lanka. Equally important is to align the human resource development ecosystem to enable the rapid business expansions,” said the CEO of MTI Consulting. Aggressively enabling ease of doing business and encouraging infrastructure investments have been two “master strokes” that have helped Hyderabad to reach its current position. For instance, the TS-iPASS Act (effective 2015) enables any new enterprise in manufacturing or services with an investment of more than INR 200 crores (Rs. 2 billion) to be approved within 15 days, and all other proposals will be greenlit in 30 days. If all the approvals do not come through in that period, the company can consider the project deemed approved, and go ahead with its plans. The officials in charge of the clearances would be penalised INR 1,000 each for every day of delay. Based on the state’s success in its core – IT, ITES and pharma – it is attracting the setting up of other industries. In 2018, Ikea opened a 400,000-square-foot outlet, attracting four million visitors in its first year. Procter & Gamble opened a major manufacturing facility outside Hyderabad. Not content with its economic accomplishments, the state Government rolled out a 10-year electric vehicle (EV) policy with the aim of attracting $ 4 billion in investments. The policy will aim to make the state a hub for electric vehicles and energy storage systems and create employment for 120,000 people through shared mobility, charging infrastructure development, and manufacturing activities (according to IBEF). For Sri Lanka, Hyderabad can provide both inspiration and learning, noted MTI Consulting, which added that to do so, we need to keep an open mind and not let our egos get in the way, while maintaining consistent policies. MTI Consulting is an internationally networked boutique strategy consultancy, having carried out 680 projects across 51 countries in the last 25 years. MTI’s core practices cover strategy, operations, and corporate finance, and has been at the forefront of thought leadership on strategy, having conceptualised breakthrough models and paradigms that challenge conventional thinking and practices.