Wide sharing of credit information a timely need

As we exclusively reported in our last week’s issue of The Nation Economist it is a salutary move that the government is planning to make CRIB reports widely available.
According to the proposal in future any individual or corporate will be able to obtain a credit information report as long as the purpose is permissible under the law.

This idea is much in line with new developments in commercial practice where every attempt is made to enhance financial transparency and create a better environment for doing business.
We already have comprehensive debt recovery laws and also laws which make issuing cheques without sufficient funds in the bank an offence punishable with imprisonment.

The proposed amendments to the law together with the existing laws will help to create a more conducive environment for those entering into business transactions with individuals who are resident in Sri Lanka.
Similarly the banks, leasing companies, credit card companies and finance companies will be able to enhance their financial soundness and profitability by reducing their default rates.
CRIB report thus will operate as a deterrent against default as well as a testimonial to the financial integrity and creditworthiness of an individual or a company.
An improved credit information system will ease matters with regard to all financial transactions and business related agreements.

This could also help all foreign investors who want to enter into joint venture agreements as well as other business transactions with Sri Lankans by reducing the time they have to waste in finding out the creditworthiness of their future business partners.
All in all, this measure if properly implemented, will create a cleaner environment where any businessman whether local or foreign could enter into financial transaction with lesser trepidation.

Sections of the community with default history are likely to oppose the move as it would effectively block their opportunity of raising new loans by hiding their past.
A cleaner credit environment with fewer defaults could improve the financial soundness of the credit institutions and with lesser cost of finance they will be able to provide credit at lower interest rates.


Frost & Sullivan upbeat on Lanka’s prospects

By Santhush Fernando
Sri Lanka has the potential of emerging as a great air travel hub with high growth in sea cargo, business processes outsourcing (BPO) and our sourced product development sectors according to a leading global growth consultancy firm Frost & Sullivan.

In an e-mail interview with The Nation Economist, the company’s Managing Director, South Asia and Middle East Anand Rangachary says, “Sri Lanka could emerge as an air-travel hub, which is taking place at present as well as, in sea-cargo, business process outsourcing (BPO) and outsourced product development sectors.
“Sri Lanka has several large ports such as Colombo, Galle, Trincomalee, and Kankasanthurai as well as mid-scale harbours which could exploit its strategic location at cross roads of Asian trade routes.”
Rangachary has been one of the key architects of the firm’s consulting practice in the region and was responsible for setting up a 450-people strong knowledge center in India that supports Frost & Sullivan’s offices worldwide on various business processes and functions.

Answering as to what global growth consulting meant, Rangachary said that it was the identification and qualification of new market opportunities in the marketplace with successful business strategies that enable a company to profitably grow by exploiting these windows of opportunity.
“Frost & Sullivan helps companies to identify latent product/process needs, pricing and channel strategies and suggest appropriate “go to market’ strategy that helps them to effectively capture the business growth options. We offer growth partnership services wherein syndicated content is shared with the clients appraising them about the market growth, drivers and constraints and major competitor’s strategies,” he says.
“We also offer customised consulting around global market entry, competitive benchmarking, merger and acquisition profiling, pricing and penetration and customer satisfaction studies.

“Finally, we also conduct growth workshops wherein senior management from the client organisation deploys proprietary tools to analyse and formulate appropriate strategies.”
Focusing on Sri Lanka’s potential, he said that the country has certain natural advantage in terms of its strategic location to growing markets in south Asia and a strong diaspora of over 700, 000 Sri Lankans spread across USA, Canada, UK and others.

He is confident that with booming service sectors, Sri Lanka is poised to reap benefits in terms of new industries such as IT, drug discovery. Other sectors such as power and energy, transportation are also expected to witness higher growth because of increasing liberalisation and investments.
“The BPO sector, started in 1983, currently employs about 10,000 persons with a turnover of over US $ 45 Million. With adequate policy support in terms of tax-incentives and education, the sector can employ closer to 39,000 by 2010 with a turnover of US $ 230 Million” he says.

“Sri Lanka’s strength lies in its quality of education, for example its high number of certified accountants, its legal system and high youth population. One unique advantage is its mutli-cultural society and high service oriented culture,” Rangachary says.

However, he says that war and its fall out have certainly affected the economic prospects in northern and eastern parts of the country. ”For high growth sectors such as Information Technology (IT), unavailability of quality manpower and dependence on India for training and development can pose a major hurdle.
“High electricity costs, highest in terms of rupees per unit or kilo Watt hours, and low availability of leased lines beyond Colombo also restrict the development of information technology enterprise solutions (ITESs) in Sri Lanka” he points out.

“Sri Lankan diaspora consists of about 700,000 people across different professions, according to recent UN estimates. These include academics, doctors, scientists, industry leaders and other professionals across USA, Canada, UK, Australia, India, etc.
“While some of the non-resident Lankans have been promoting industrial development in areas such as information and communication technology (ICT), pharmaceuticals etc, the inflow is yet to be significant. Although there is Virtusa and Genovate in IT sector, for example there is more room for investments in education and training.”
Rangachary also says that the telecommunication sector, the fastest growing sector in the country requires support organisations for pre-sales, after-sales and technical support. “Sri Lankan diaspora can initiate innovative business models that move beyond western part of the country.

“While ICT and telecom infrastructure investments are on par with that of the continent, roads and highway infrastructure is still a bottleneck for investors. Moreover, many private investors feel the pace of liberalisation has slackened across the railways, ports, and electricity sectors thus affecting the market attractiveness.
“A single-window, faster decision making procedure in terms of purchase cycle and cutting down of cumbersome process can facilitate higher investments” he says.

“While other cities such as Kandy have potential to grow to be the next centers of IT development, in the immediate future we believe Colombo would be the best location from logistical point of view,” he adds.
Elaborating on the operations of Frost & Sullivan, Rangachary says that it has been partnering with clients to support the development of innovative strategies for more than 40 years.
“The company’s industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities.

“Frost & Sullivan serves an extensive clientele, includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics,” he says.
Referring to Frost & Sullivan Conference on Information Security held in Colombo on February 21, Rangachary says that it was part of a multi-city, mutli-country conference targeted at key IT decision makers.
“The focus was on emerging paradigms of software security market.

It highlighted how enterprises across the world were aligning themselves with emergent threats and what opportunities therefore would lie for providing the services/products.
“The response in Colombo was stupendous. We had highly educated attendance of 130 professionals cutting across public and private sector enterprises in the country.

Sessions on enterprise security and the products identify and access management and remote security management were well received. Experience sharing session of Sri Lanka Telecom was greatly appreciated,” he says.
Rangachary concludes saying that his company plans to have more conferences and events in Sri Lanka highlighting the enterprise IT related aspects.


Pakistan set for 7.0 percent growth rate: ADB

(AFP) - Pakistan’s economy is projected to post a growth rate of about 6.5 percent to 7.0 percent in 2007 and 2008, reflecting some strengthening in agriculture and manufacturing sectors, the Asian Development Bank said on Tuesday.

The Pakistani economy is expected to pick up slightly in financial year 2007, the ADB said in its annual “Asian Development Outlook 2007” report which reviews the recent economic performance of 43 developing countries.
The report noted “strengthening in agriculture and manufacturing” sectors and said that inflation was set to moderate after further tightening of monetary policy.

“The medium-term outlook for the Pakistani economy remains positive, but macro-economic stability has to be maintained and structural issues addressed,” it said.
“Pakistan is projected to post a growth rate of about 6.5 percent to 7.0 percent in 2007 and 2008,” it said.
Buoyant growth, improved macro-economic fundamentals and strengthened international credit ratings had been the “hallmarks” of Pakistan’s economy in recent years, the report said.

However the report noted that the South Asian country’s growth rate slowed in 2006 to a “still brisk” 6.6 percent from an average 8.0 per cent in the preceding two years, due to bad weather affecting agriculture.
“The robust expansion of the services sector failed to offset the sluggish performance of the agriculture and manufacturing sector,” it said.

The report said that the economies of South Asian region grew by 8.7 percent, supported by growth in consumption and investment.
“The region has averaged more than 7.5 percent growth since 2003, allowing it to reduce poverty levels in India, Pakistan and Bangladesh. Every economy in the region posted growth of more than 6.0 percent in 2006, except Nepal, which suffered in the wake of political unrest,” it said.


Yahoo eliminates e-mail storage cap

(AFP) - Yahoo announced on Tuesday it was giving users of its web-based e-mail service unlimited storage capacity as a tribute to Yahoo Mail’s 10th birthday and today’s data-rich Internet lifestyle.
In a phased roll-out beginning in May, Yahoo will eliminate the one-gigabyte cap on memory for people with free e-mail accounts and two-gigabyte cap of memory for those who pay for premium accounts.
“We are viewing this as a gift to our users worldwide in recognition of what they have done for us and in recognition of what they are doing now on the internet,” Yahoo Mail Vice President John Kremer told AFP.
“We see people increasingly sending more photos -- richer media formats in all different types -- really driving the amount of storage up beyond the levels they were a year ago.”

Internet search titan Yahoo, based in Sunnyvale, California, bought web-based e-mail service Rocketmail and it had four megabytes of storage when it was relaunched as Yahoo Mail in October of 1997.
Four megabytes of memory would likely not be sufficient to hold a set of pictures taken during the course of a festive weekend by someone with a typical digital camera.

Apple introduced last year an 80-gigabyte iPod capable of storing as much as 100 hours of video.
“I remember getting in a room to plan our Rocketmail launch over a decade ago and worrying that our original plan of a two MB quota wasn’t enough, and that we needed to be radical and double the storage to four MB per account,” said lead Rocketmail developer David Nakayama, who now works at Yahoo.
“It’s ironic that I routinely send and receive individual mail attachments bigger than that now.”
Yahoo Mail is the most popular web-based e-mail service and had more than 250 million users as of January, according to industry-tracking comScore Media Metrix.

The elimination of the storage cap comes at a time when costs of computer storage are declining and in the face of a relentless trend for people to exchange video, music and other data-laden digital files online.
“We think people want to continue to be able to share their lives with friends, families, and communities,” Kremer said.

“They want to be able to send and store as much of their photos and attachments as possible and not manage the storage. The right step is to take the worry out of it and give them unlimited storage.”
Yahoo said its “e-mail server farms” around the globe were equipped to handle the storage load and the company will invest in improved capacity where necessary. “Yahoo Mail is so important to Yahoo as a company that we are willing to make that investment,” Kremer said. “It is important to show we are listening to our customers’ needs.”

The limitless storage is not meant to be used by people to back-up computer software by copying system contents onto Yahoo servers.
“It was intended for normal e-mail practices,” Kremer said. “Our engineers built the technologies to understand what types of files are being sent and where.”


France, Germany burnish image with global business survey

(AFP) - French and German investment agencies released on Wednesday “The European Attractiveness Scoreboard” in a bid to improve the continent’s business image and attract investors.
The study portrayed the European Union as the world’s leading market, with a population of roughly five hundred million and a gross domestic product (GDP) of 14 trillion dollars (10.5 trillion euros) in 2006.
That compared with the United States’ population of around 300 million and GDP of 13 trillion dollars over the same period.

The study was based on 56 criteria including household income, labour productivity, research and development investment, and infrastructure.
It compared China, Europe, India, Japan, Korea, Latin America, Russia and the United States.
The study aimed to use “factual, quantitative data collected by international institutions,” as opposed to “perceptual surveys conducted on small samples.”

The European School of Management in Berlin and the HEC School of Management in Paris designed the survey, which was “prepared to rigorous academic standards” and is to be updated every two years.
The report identified Europe’s leading position for exports of goods and services “including in the high tech sphere” such as aerospace and railway manufacturing.

But it recognised that the continent was weaker in the field of research, with lower investment as a share of GDP in knowledge-intensive areas than Japan, Korea and the United States, and fewer scientists than in the US.
In terms of the number of hours worked annually, Europe was next to last, ahead of Russia but far behind the leaders, Korea, India and China.

Nevertheless, overall European productivity fared better, placing second, just behind the US.
The number of days lost to industrial action in the private sector was fewer in Europe than in Korea, India and the United States. But the study did not cover the private sector, which is where many European strikes take place.








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