Dhammika’s seven-pronged strategy to overcome Sri Lanka’s foreign exchange crisis

Mr. Dhammika Perera, the controlling shareholder of the Hayleys group and a multitude of other listed companies who is widely speculated to be the country’s wealthiest individual, has proposed a seven-pronged strategy to overcome Sri Lanka’s foreign exchange crisis in a wide-ranging interview with the Irida Divayina Sangrahaya.

In terms of market value of his quoted share portfolio he will be among the wealthiest, if not the wealthiest in the country, analysts say. He is also on record claiming he’s the biggest taxpayer here but it is unclear whether this is in corporate or personal terms. Most published ‘rich lists’ in SL calculate wealth on market value of quoted shares. But many other factors including real estate holdings, shares of unquoted companies and much more should be included in any accurate computation.

Perera who says he can identify “a multitude of ways” to earn and save dollars says in the interview that “it is only now that everyone feels earning dollars is important.”

“For the last 73 years, the country has not had a plan to earn foreign currency. Therefore, only now when an issue arises, a country like ours wants to earn dollars inside the country. Previously, there was no plan to earn dollars for the country. Every year there is a deficit of about US$ 1.8 billion to US$ 2 billion. But a debt of US$ 2 billion sorts out the problem every time. Hence it was not necessary for anyone to generate dollars inside the country. But I think, now the country is most aware of the need to generate dollars in the country, Perera said.

The Dhammika strategy covers a wide compass. This includes building a “University Town” reachable within 30 minute from the BIA with five internationally ranked universities; establishing a budget airline hub; providing opportunities for the private sector educational industry to teach ICT courses; building two hospitals like Singapore’s Mount Elizabeth with internationally recognized facilities; improving the fisheries industry; and making SL the country with Asia’s best business environment; he further sees unexploited potential in the coconut industry.

He has thus outlined his seven prongs:

1. If the government will build a university town consisting of five universities, the country can save US$2.25 billion. Annually, around 25,000 students leave the country to study abroad. Accordingly, a sum of US $ 30,000 per student per year is drawn to foreign countries from Sri Lanka. The government should build a university town consisting of five universities in a location that is reachable within 30 minutes from Bandaranaike International Airport at Katunayake, where 150,000 students can receive education at once (30,000 students at each university).

The management of these five universities should be given to the top five universities with internationally recognized ratings. A programme needs to be initiated to attract 25,000 foreign students a year. Including 25,000 Sri Lankan students altogether for all the 50,000 students, an educational loan scheme needs to be provided from public and private banks at a concessional rate. Due to this programme, 25,000 foreign students will enter our country and this will help the country to have annual earnings of US$ 2.25 billion.

2. Establish a budget airline hub to earn US$2 billion into the country. Fifty percent of the tourists that travel to countries like Thailand, Vietnam, Singapore and Malaysia use budget airline services. In Sri Lanka, out of the total 80,000 hotel rooms, only 20,000 are of a five or four-star class. The remaining 60,000 hotel rooms are three or below star rating. For instant growth in the tourism industry and by aiming for hotel rooms with a three or below star rating, the Ratmalana Airport should be developed as an International Budget Aviation Center as soon as possible. This will attract further around one million tourists into our country apart from the current annual tourist arrivals. From this, the tourism industry can earn US$ 2 billion.

3. By providing the opportunity for the private sector educational institutions to teach ICT courses provided by all state universities in the country, we will be able to earn US$2 billion. Currently, in the job market, there is a high demand for jobs in ICT, engineering and programming fields. By utilizing ICT, engineering and programming courses provided by all state universities in the country a programme to award external degrees needs to be initiated through private educational institutions.

Thereafter, every six months an examination will be conducted according to the examination procedures accepted by the state universities and for those who pass this examination, an external degree will be awarded. By this in the next five years, 200,000 students will be able to obtain the required qualifications for jobs in the IT industry. From which earnings of US$ 2 billion can be achieved.

4. Develop the coconut industry to earn US$ 600 million. Under prevailing conditions, 1.5 million coconut seedlings are planted annually. Under a five-year special government subsidy program, four million coconut seedlings will be planted per year. Accordingly, in total 20 million coconut seedlings will be planted in five years, from which additional 1.2 billion nuts will be added to the coconut related industry. By adding coconuts to the industry at a value of US$ 0.50 per nut, through this five-year plan revenue of US$ 600 million can be achieved.

5. Construct hospitals with internationally recognized facilities to earn US$ 200 million. Building two such hospitals with internationally recognized facilities such as Mount Elizabeth Hospital in Singapore at the expense of the government nd managed by an internationally recognized hospital will limit people from going to foreign countries to obtain medical treatment. By this initiative, the country can save US$ 100 million. Also, through the brand promotion of these hospitals with high quality medical and nursing services in the countries within the region, we will be able to attract foreigners to receive medical treatments in Sri Lanka. This would enable our country to earn US$ 100 million. Therefore, Sri Lanka can earn total revenue of US$ 200 million through this project.

6. Improve the fisheries industry to earn US$ 1 billion. Currently, the annual fish harvest in India is 2,000 Kgs per square kilometer of ocean. The annual fish harvest in Sri Lanka is 900 kgs per square kilometer. Introduce a new multi-purpose licensing system in addition to the existing licensing system for large multi-day vessel owners engaged in deep-sea fishing.

Through this license, they can double the number of multi-day vessels they have, but only one vessel can be anchored in the fisheries harbor at a time. Through this, they can use the additional vessel for deep-sea fishing. Also, a program should be initiated to equip small fishing vessels with GPS-enabled Gemini Fish Finder equipment with four satellites to enable the fishermen to locate shoals of fish in the sea; this will help them to efficiently double their fish harvest. This will result in an additional 500 million kilograms of fish harvest, which could generate US$ 1 billion in revenue.

7. Make Sri Lanka the country with the best business investment environment in Asia to earn US$ 3 billion. By increasing the tax holidays and other benefits available for BOI investors and by improving the rank of Sri Lanka in the ‘Ease of Doing Business Index’ Sri Lanka can earn US$ 1 billion worth of new investment projects.

Within five years, through these new investment projects, US$ 2 billion worth of export revenue can be generated. Therefore, Sri Lanka can generate revenue of US$ 3 billion through these new investment projects.