The Missing Voice in Sri Lanka’s Economic Transformation Dialogue
By Sarrah Sammoon
Sri Lanka is currently navigating its defining moments in history amidst skill shortages, skills transformation, geopolitical ambiguity, generational shifts and organisational transformations.
Some of the key factors, triggering the unprecedented transformation of the country, are:
· Sri Lanka’s key positions on China’s One Belt One Road initiative with Port City and the Hambantota Port
· The Free Trade Agreement (FTA) signed with Singapore
· The already existing FTA with India, and possibly the wider scope that may come into play, after the upcoming negotiations towards the end of December, 2018
· Located in the Indian Ocean, Sri Lanka becomes a strategic location of importance for the United States. For example, the recent $ 39 million the US gave Sri Lanka as “foreign military financing” to boost its maritime security, countering China’s investment in the island.
This pattern will continue to be an overarching trend for the Sri Lankan economy. Sri Lankan policy makers, and thinkers, echo the sentiments reported by the World Bank: The country has to shift towards a private investment-tradable sector-led growth model. They can do this by improving trade, investment, innovation and the business environment.
However there is a key industry voice being left out of these important strategic discussions: Global Mobility and Strategic Talent Management. Mobility may be just what the country needs to move the needle for faster growth in Foreign Direct Investments (FDI), sustainable business platforms and global competitiveness, enabling faster implementation and operational excellence.
The government, and corporate sector in Sri Lanka, are not aware of what the Global Mobility industry entails; except for the few multinationals, that have mobility as part of their HR and Rewards Policy. Even if they are aware, there is very little discussion around this. Australian HR Institute defines the area of global mobility as a large and complex area of Human Resource Management.
It refers to managing both global and domestic assignments, national and international transfers, the planning and pricing of inbound and outbound movements; being aware of the tax, regulatory and compliance issues, immigration issues, and the personnel issues, that are raised when an organisation moves people from one jurisdiction to another.
Global mobility can be a leading partner, with the government and private sector alike, to bridge the gap between the strategic decisions made, and can assist in executing them through strategic talent management.
Inadequate trade facilitation
According to HKDTC’s market profile, the economy was expected to accelerate in 2018, buttressed by a robust services sector, and by recoveries in the agricultural and industrial sectors. However, the World Bank reports that trading across borders is particularly challenging for Sri Lankan businesses. Trade facilitation is inadequate to the point of stunting growth and linkages to regional value chains.
The report goes on to say, that Sri Lanka is considered one of the hardest countries in the world in which to run a trading business. “Compare it to Singapore – you could even import a live tiger there without a problem.”
In fact we are all aware, that Sri Lanka has been slow to attract the correct type of foreign investment, in spite of its strategic geographic location which the government frequently boasts about. Only a very small percentage of foreign investment is associated with the global production networks, whereas we see more than enough interest in the construction field.
The ripple effect of an environment not having mobility benchmarking in its ecosystem, and its tools offered to investors can be seen in this real life case study:
A North American High-tech BOI investor, in professional services with a partner belonging to a venture capital firm in the Silicon Valley, and who is an angel investor throughout Asia, with branches in Singapore and India moved to Sri Lanka. They found it surprisingly difficult to obtain the resident visa, even with the BOI investment.
They were unaware of the different officials and departments involved. The investor said that they had to obtain many signatures and had weeks’ worth of paperwork to do. They spent a week desperately waiting for the final signature on the Ministry Recommendations for the Resident Visa, because the only official who could sign it stopped showing up to work, and nobody knew where they were.
The reason the investor moved to Sri Lanka was, because of the people, and the beauty of the country. They wanted to make it a home base for work throughout Asia, but that proved to be rather difficult. He said: “Right now in India as a foreigner I can form a corporation with a flexible business mandate, open a corporate bank account, transfer in capital, and get a long-term resident visa, all within the space of 48 hours — and I can get started immediately building a business and bringing in global income. Unfortunately, in Sri Lanka there are hurdles for every one of these steps — it would take many weeks to complete — and if a single signature isn’t forthcoming, the entire process is frozen.”
He continued to add: “On the plus side, I’ve been very happy with the talent, motivation, and positive attitude of most of the employees we have here.” His company with a US-based partner is looking at a major investment in a new offshore business, to the tune of several million dollars within the next 1-2 years. They had a choice to do it either in Sri Lanka or India. The preference was to do it in Sri Lanka, because of the talent available here, but they have decided to move to India, as they find it easier to operate within their system. India has for years been having the discussion on mobility, and has integrated the tools and resources of the global mobility industry into its investment environment.
Discussions underpin global mobility
Mobility can assist businesses respond rapidly to the shift, and transformation, required both internally and externally, without allowing loss of momentum or deviation from the vision the corporation has. At the recent 2018 Sri Lanka Economic Summit, everything they talked about was in fact underpinned by global mobility, but there were no dialogues around it.
Businesses and policy influencers need to give, global mobility a seat at the table, and work together in the transformation of our economy. Connectivity, dialogue, human-to-human interaction and integrations of systems are incredibly important whether it is software, agriculture, trade, etc. Mobility is shouting out to step into this role, because at its core is the power of collaboration.
Businesses around the world are connected like never before, and are entering an “agility era”. Sri Lanka has to embrace and acknowledge this, and allow mobility to help organisations to respond to change quickly and efficiently. This will assist Sri Lanka, to further integrate into the regional and global value chains.
This increased growth will lead to more regulatory challenges. With the flow of foreign cultures and inter-regional rules, laws, policies and markets, additional challenges will emerge; immigration issues, cultural concerns, trailing spousal support requirements, and quicker integration to host country.
These issues are completely underpinned by global mobility, and fostering this industry in Sri Lanka, may allow a faster way to leverage our unique location. This may just be a quick remedy to support the growth that our private sector requires, giving Sri Lanka the chance of becoming a model of the future.
Sarrah Sammoon is the CEO of Magellan Champlain and has 24 years of experience in Global Mobility Solutions in Sri Lanka.