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
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
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
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
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
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
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
“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
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
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
“A single-window, faster decision making procedure in terms of purchase cycle
and cutting down of cumbersome process can facilitate higher investments” he
“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
“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
“The response in Colombo was stupendous. We had highly educated attendance of
130 professionals cutting across public and private sector enterprises in the
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:
(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
“The medium-term outlook for the Pakistani economy remains positive, but
macro-economic stability has to be maintained and structural issues addressed,”
“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
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
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
(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
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
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.