Murtaza Jaffarjee to Chair Advocata Institute

Originally appeared in the Morning

Advocata Institute is pleased to announce that Murtaza Jafferjee, CEO of JB Securities, has taken up the role of Chairperson of the Advocata Institute. In his new role, Mr. Jafferjee would play a leading role in fundraising, governance and act as an advocate of the institute’s mission and it’s policy programme.

Murtaza Jafferjee is an investment professional with over 25 years of industry experience. He is currently an elected director of the Colombo Stock Exchange and is the lead independent director of Serendib Hotels PLC. He was a past president of CFA Society of Sri Lanka, the local member society of the CFA Institute and also held the advocacy chair whose responsibilities include promoting good ethical practices. He has a Bachelor's Degree in Mechanical Engineering and Computer Science from the University of NSW, Australia and a Masters in Financial Economics from the University of Colombo. He is also a Chartered Financial Analyst (CFA).

Over his career, Murtaza has served on many committees and groups and has advocated for progressive economic policies with the aim of fostering competitive markets that are effectively regulated which then leads to an increase in total factor productivity of producers and greater choice and surplus for consumers.

“Hostage to failed ideologies are far more lethal than the most deadly viruses.” Said Mr Jafferjee, commenting on the need to support institutions like Advocata. “The Institute fills a long-felt vacuum in the marketplace for ideas in Sri Lanka. We lacked a coherent and powerful voice for economic freedom, and that is what Advocata provides. I am glad to have joined the institute to strengthen that mission”.

Murtaza was a founding member of Advocata, when the Institute was formed in 2016, and serves as a senior fellow of the Institute.

“Murtaza has been one of our biggest supporters, that helped us get off the ground,” said Dhananath Fernando, the COO of the Institute, “We are honored to have him on board and I look forward to working closely with him to improve and scale-up Advocata to be a strong voice in Sri Lanka’s public policy discourse”.

For more on Advocata’s scholars, members and associates see www.advocata.org/about

Online forum on COVID-19 with Export Industry Leaders by Advocata Institute

Published in the Daily FT and Economy Next

Advocata Institute is hosting a panel discussion with eminent business leaders, Ashroff Omar (CEO, Brandix), Dilhan Fernando (CEO, Dilmah Tea), Romesh David (CEO, South Asia Gateway Terminals) and   Prabhash Subasinghe (Chairman, Sri Lanka Export Development Board (EDB); moderated by Murtaza Jafferjee (CEO, JB Securities). The discussion will explore the current challenges faced by Sri Lankan businesses and the road to recovery, with a special focus on merchandise exports.

The online panel discussion will be hosted on Zoom and live-streamed via Advocata Institute's Facebook Page and other partner channels on the 16th of April from 10.40 AM.

Register now: www.advocata.org/events (Limited slots available to join the zoom call)

Send us your questions via slido.com. Event Code: #COVIDLK

Dr. Sarath Rajapatirana joins Advocata Institute as the Chair of its Academic Program

Advocata Institute is pleased to announce that Dr. Sarath Rajapatirana has been named as the Chair of its academic program. In his new role, Dr. Rajapatirana will oversee the Institute’s research and help build up a network of fellows and associates to increase the academic output of Advocata.

An eminent economist,  Dr. Rajapatirana has worked across the world with leading international organizations such as the World Bank, World Trade Organisation, ITC in Geneva, and the International Cooperative Alliance in Latin America. He is a former economic advisor to H.E. the President of Sri Lanka and has advised governments and policymakers around the world.

“I am excited to join Advocata Institute, an up and coming think tank with a committed young staff to undertake independent research and policy analyses aimed at both the public at large and the Government of Sri Lanka.”

A widely published scholar,  Dr. Rajapatirana is the author and co-author of six books and fifty-five papers in refereed publications and given seminars at Stanford, Harvard and the  University of California at Los Angles and other top universities in the world.  He was also a scholar attached to the American Enterprise Institute,  an External Examiner for PhD students at the John Hopkins School of Advanced International Studies. Besides, he was a visiting Professor at the Ho Chih Minh Economics University and Angiang University in Vietnam.

During his long career at the World Bank, Dr. Rajapatirana was the Director and the main author of the 1987 World Development Report on Trade and Industrialisation, Director of the Macroeconomic Comparative Study of Developing Countries, Division Chief for Trade and Industry for Latin America and the Caribbean and Economic Adviser in the Latin America Technical Department and a Member of the Editorial Board of the World Bank Economic Review. Before joining the World Bank he was the head of the Money and Banking Division of the Research Department of the Central Bank of Sri Lanka. 

Currently Dr. Rajapatirana is a Vice President of the Sri Lanka Economists Association (SLEA) and has served on the boards of the Institute of Policy Studies,  Gamani Corea Foundation and University of Jayewardenepura Postgraduate Institute of Management Board of Studies.

A graduate from University of Ceylon, Peradeniya,  Dr. Rajapatirana has two Master’s degrees in economics, from University of Massachusetts and University of Minnesota. He did his doctoral studies at the University of Minnesota (ABD) and has a PhD from the University of Colombo.  His language skills are in Sinhala, English, Indonesian, Spanish and Malay. 

Sri Lanka heading towards an economic downturn in the wake of COVID-19

Advocata Cheif Operating Officer, Dhananath Fernando joined an interview with News1st to discuss the economic impact of COVID-19 on Sri Lanka.

“…it will be a very difficult time for Sri Lankans as well as for all global citizens. For Sri Lanka it will be a double whammy,” Fernando said in an interview with News1st.

Sri Lanka kicked off the year with a GDP rate of 2.6 percent and has to settle USD 4.8 billion as external foreign debt, the highest debt repayment amount for the country within a single year.

“Operating the markets [sic] finding a solution to do that is also critically important while on the medical front we are taking the necessary measures,” he noted.

Advocata mention in the Business Times: Back to the basics for Sri Lanka

Excerpt from an article on Sunday Times

Support from  lending agencies

By Dhananath Fernando, COO, Advocata Institute

The Sri Lankan Government must proactively negotiate on a specific timeline with lending agencies such as IMF, World Bank and ADB to reschedule our existing facilities and for a new finance package to mitigate the indicated economic downturn. It is essential to open a dialogue with China, US, India and EU for bilateral lending given the negative outlook to raise debt from the market. Near zero rate in US interest rates in the US provides a good opportunity to restructure our foreign debt.

During the curfew period, the government should abolish price controls immediately which has created shortages of food items in the market where the most economically marginalised segment in the community is the most impacted. Import controls have to be abolished to avoid sending the wrong signals to the market and the government should work closely with the private sector to rapidly expand the testing capacity in the battle against COVID-19.

Read full article here.

Fighting COVID-19: Economic implications for Sri Lanka

Excerpt from an article on Ceylon Today

In an online discussion organised by the Advocata Institute on the ‘Economic Impcy of COVID-1 in Sri Lanka, Chair of the Academic Programme of the Advocata Institute, Dr. Sarath Rajapatirana, Executie Drirector of Verite Research, Dr. Nishan de Mel and Associate Professor of the National Universoty of Singapore, Prof. Razeen Sally elaborated on these concerns.

“When COVID-19 stuck us, we were actually in a relatively weak economic situation. Our growth rate had fallen 2.6%, which is very low compared to our growth rates in the last three decades. earning from tourism has fallen particularly after the Easter Sunday attacks. The immediate future for tourism did not look good. when we look at the economic impact of COVID-19, there is a direct effect and indirect effect” - Dr. Sarath Rajapatirana.

Read full article here.

Getting private sector involved is essential to rapidly expand Sri Lanka’s testing capacity for Covid-19

PRESS RELEASE

Originally appeared in the Daily FT, Daily News, The Island and Ceylon Today

In dealing with the Covid-19 crisis,  the government has placed most of Sri Lanka under curfew.  This is to mandate a ‘physical distancing’ strategy to slow the transmission of the novel coronavirus and to reduce the proliferation of new cases. This gives space for the country’s health system to cope with the potential influx of Covid-19 patients.

Curfews cannot go on forever.  In this initial phase, it is essential that the government uses this period to ramp up the healthcare infrastructure in the country to safely treat both Covid-19 patients and others requiring care.  As has been emphasised by medical professionals and the Government Medical Officers’ Association (GMOA), it is particularly important that the government uses this time to increase the country’s testing capacity to effectively test those with symptoms and their close contacts.  

The “trace - test - treat” method has shown to be effective in countries such as South Korea and others which have faced up relatively well to this public health crisis.  The government’s decision on 31st March to expand testing to check for community transmission is a step in the right direction. Currently, guidelines for testing (interim case definitions) as directed by the Epidemiology Unit limit testing to individuals with acute respiratory illness who have either had contact with a confirmed Covid-19 patient, or have travelled abroad in the last 14 days. Patients with acute pneumonia (not explainable by any other aetiology) and are presenting symptoms, can also get tested, if a doctor sees fit. The definition was expanded to include individuals experiencing fever and respiratory distress, but this definition will need to be broadened, to ensure that individuals with milder symptoms also have access to testing. 

Sri Lanka has currently tested only 2277 cases,  or 87 per million people.  Countries such as South Korea have tested 410,564 cases or 7971.04 per million people.  The United States, initially lagging and summarily criticised for its Covid-19 response has dramatically increased testing over the last few weeks with over 1 million tests being conducted to date and over 100,000 being conducted every day.  “Trace - test - treat” is now emerging as a policy consensus to deal effectively with the crisis. 

When looking at current testing capacity, in addition to the government sector, and universities, the private sector currently has only three laboratories that are equipped to conduct PCR testing. While private sector testing for Covid-19 was initially not allowed, this restriction has now been lifted. The government should work to coordinate with the private sector, and with universities to improve testing capacity, as well as to tap into private sector access to supply chains and technical know-how on new testing options. Given that Sri Lanka has limited fiscal space to face up to the crisis,  the government should prioritize the test and trace in its engagement with donors for funding. 

It is useful to think of the necessary policy responses to the Covid-19 crisis in phases. In this first phase of containment, the focus should be on practicing physical distancing, and expanding the capacity to test. There is an economic trade off that takes place, while the country expands testing capacity. This economic burden is not one that will be sustainable for much longer, and the government has to act swiftly. With adequate testing it is possible for the country to move to the next policy phase, where limited economic activity can be allowed, with strict physical distancing practices and widespread testing continued. 

The Advocata Institute recommends that the government gives due priority to expanding testing capacity in the country. 

• As an immediate measure, utilise testing capacity that exists in universities and in the private sector.

• Engage with the private sector to identify barriers to the import of rapid testing kits, and facilitate where possible. 

• Update the interim case definition issued by the Epidemiology Unit, to ensure that effective community testing can take place.

Price controls are not a solution during a pandemic

Dhananath Fernando, Cheif Operating Officer of the Advocata Institute joined a discussion on the economic impacts of Covid-19 on Sri Lanka with Faraz Shauketaly on NEWSLINE.

“91% of our Tin Fish is imported and the rate of tax (tariff) is 35% on one hand, and then you ask them to sell it at Rs. 100 which is almost about half of the general retail price according to the Government Census. So, the poor man, who could have afforded a Rs. 200 Tin Fish can no longer find it available in the market and now his protein requirement he has to move to an alternative which is more expensive than Rs. 220 (the original price of tin fish)”

“The general rule is that when you have price controls, it is unavoidable that people hide stocks and it hits the poor the most - when there is no food available at the shelf and you have to shift to the alternative that is more expensive.”

Online panel discussion on the Sri Lankan economy after COVID-19

The Advocata Institute hosted an online discussion on Zoom featuring Dr. Sarath Rajapatirana (Chair - Academic Program, Advocata), Dr. Nishan de Mel (Executive Director, Verite Research), Prof. Razeen Sally (Associate Professor, National University of Singapore) to discuss the “Sri Lankan economy after COVID-19”, in a panel moderated by Aneetha Warusavitarana (Research Manager, Advocata Institute). The discussion explored Sri Lanka's response to COVID-19, the route to recovery, potential pitfalls and a global perspective!

Click here to watch this video on Youtube.

Advocata mentioned in article on Price Controls during COVID-19

Excerpt from an article on Roar

Price Controls: Who Will Pay For The Canned Fish And Dhal?

“But as Gunasiri attends to his next customer, a thought weighs heavy on his mind— he has just made a loss of Rs. 60 on that sale. And by the time he exhausts his stock of dhal alone, he would have made a loss of a few thousand rupees. A princely sum, considering the circumstances."

“It is commendable that the government has taken steps towards easing the burden on the poor, especially during a time like this. But, controlled prices can also lead to shortages, as producers lose incentive and ability to stock these products. In addition, when imposed with no prior warning, price controls force smaller businesses to take losses, which can sometimes be inequitable. Despite the good intentions behind this decision, it has the potential to make the situation worse,” Aneetha Warusawitarana, Research Manager, Advocata Institute told Roar Media. 

Read full article here.

The economic impact of COVID-19 on Sri Lanka; a discussion on Face the Nation

Advocata Institute COO, Dhananath Fernando joined a discussion on Covid-19 with Face the Nation along with Prof. Indika Karunathilake (President of the SLMA), Dr. Samantha Ananda (Spokesperson of the GMOA and Dr. Sajeewana Amarasinghe (Secretary of the Sri Lanka College of Psychiatrists).

“In terms of recommendations for the government on the economic front, there are 3 things that you should not do at this particular moment: One is imposing price controls, two is printing money because that will create inflation and again hit the poorest of the poor - price controls do the same, the third thing is having import controls because that will have a negative long term impact” - Dhananath Fernando

Media coverage for the launch of the Red Tape Project

Advocata Institute hosted their latest event, “පොඩි බිස්නස් පොඩි කරන කරන රතු පටි රෙගුලාසි” on the 5th of March 2020. This event served as the official launch of the Red Tape Project, the culmination of their ongoing work on removing legal and regulatory barriers faced by small and micro entrepreneurs.

Daily FT: More difficult to register small business than limited company: Advocata

"Advocata Institute hosted their latest event, ‘Red Tape Regulations that Stifle Small Business’ in Colombo last week. The objective of the Red Tape Project is to identify, study, and advocate for the removal of legal and regulatory barriers faced by businesses in Sri Lanka. As a first step towards the process, it launched a report on ‘Barriers to Micro and Small Enterprises in Sri Lanka’, and a website for entrepreneurs to submit views on red tape and government processes that need to be removed or simplified." 

Read the full article

Ceylon Today: Advocata hosts event for small and micro entrepreneurs

“The report, ‘Barriers to Micro and Small Enterprises in Sri Lanka’ provides an understanding of the landscape of micro and small enterprises in the country, drawing from an islandwide survey. The survey highlights the various regulatory barriers that these enterprises face, ranging from issues of finance, registration, space and labour.”

Read the full article

The Morning: Advocata launches Red Tape Project for small businesses  

"The objective of the Red Tape Project is to identify, study, and advocate for the removal of legal and regulatory barriers faced by businesses in Sri Lanka. As a first step towards the process, Advocata launched a report on “Barriers to Micro and Small Enterprises in Sri Lanka”, as well as www.redtape.lk, a website for entrepreneurs to submit their frustrations or views on red tape and government processes and regulations that need to be removed or simplified. The work on this project was then followed up by the #MystoryLK online competition, where Advocata asked micro and small entrepreneurs islandwide to send in essays, in Sinhala, Tamil, and English, detailing the barriers they had faced in setting up their businesses and how they believed the system could change to reduce the issues they faced.."

Read the full article

Economy Next: Red tape hinders registration of small businesses in Sri Lanka: think tank

"Red tape is hindering the registration of small businesses at Divisional Secretariats in Sri Lanka, discriminating against the poor and holding back entrepreneurship, Advocata Institute, a Colombo-based think tank said."

Read the full article

Sunday Times: Micro enterprises face many issues in running a business

"Dhananath Fernando, CEO, AI at the outset explained the harrowing experiences the micro entrepreneurs encounter and also explained the purpose of the ‘red-tape’ across the participants’ seats. To prepare the report, AI carried out a survey to find out these barriers and the report was based on the survey. The researchers have found out that micro-small entrepreneurs largely operate from their homes and lack of access to finance limits this sector reaching the next level."

Read the full article

Lanka Business Online: It’s more difficult to register a small business than a limited company: Report

"The objective of the Red Tape Project is to identify, study, and advocate for the removal of legal and regulatory barriers faced by businesses in Sri Lanka. Advocata also launched www.redtape.lk, a website for entrepreneurs to submit their frustrations or views on red tape and government processes and regulations that need to be removed or simplified. Rajapatirana says the comparison of Sri Lanka’s practices with those of Hong Kong and New Zealand, two countries that have higher rankings for economic freedom in the world and also have best practices for registration of enterprises is used to guide the reform recommendations."

Read the full article

Ada Derana: සී/ස පුද්ගලික සමාගමක් ලියාපදිංචි කිරීමට වඩා ඒක පුද්ගල කුඩා ව්‍යාපාරයක් ලියාපදිංචි කිරීම අපහසුයි 

Advocata Institute නවතම වාර්තාව “පොඩි බිස්නස් පොඩි කරන රතු පටි රෙගුලාසි” 2020 මාර්තු 5දා පවත්වනු ලැබී ය . කුඩා සහ ක්ෂුද්‍ර ව්‍යාපාර මුහුණදෙන නීතිමය හා නියාමන බාධක ඉවත් කරගැනීම සදහා ඔවුන් දැන් කරගෙන යන කටයුතුවල කූටප්‍රාප්තිය ලෙස , රතු පටි ව්‍යාපෘතිය නිල වශයෙන් ආරම්භ කිරීමේ අවස්ථාව ලෙස මෙම උත්සවය වැදගත් වෙයි .

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Lanka News: සී/ස පුද්ගලික සමාගමක් ලියාපදිංචි කිරීමට වඩා ඒක පුද්ගල කුඩා ව්‍යාපාරයක් ලියාපදිංචි කිරීම අපහසුයි

පොඩි බිස්නස් පොඩි කරන රතු පටි රෙගුලාසි ව්‍යාපෘතියේ අරමුණ වන්නේ ශ්‍රී ලංකාවේ ව්‍යාපාර මුහුණ දෙන නීතිමය හා නියාමන බාධක හදුනාගැනීම , අධ්‍යයනය කිරීම හා ඒවා ඉවත්කිරීම වෙනුවෙන් පෙනීසිටීම යි . මෙහි මුල් පියවරක් වශයෙන් Advocata Institute “ක්ෂුද්‍ර හා කුඩා ව්‍යාපාරවලට ඇති නීතිමය හා නියාමන බාධා” පිලිබඳ වාර්තාව එලි දක්වනු ලැබීය. මෙහිදී නීතිමය හා නියාමන බාධක ඉවත් කළ යුතු හෝ සරළ කළ යුතු රජයේ ක්‍රියාවලි හා නීතී රීති පිළිබඳව ව්‍යවසායකයින්ට තම කලකිරීම හෝ අදහස් ඉදිරිපත්කිරීම සදහා www.redtape.lk වෙබ් අඩවියක් ද ආරම්භ කළේ ය.

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Citizen: “පොඩි බිස්නස් පොඩි කරන රතු පටි රෙගුලාසි” මාර්තු 5 එළිදැක්වේ

Advocata Institute සුළු සහ කුඩා පරිමාණ ව්‍යාපාරිකයින් මුහුණදෙන නීතිමය ගැටලු ගැන නවතම අධ්යන වාර්තාවක් මාර්තු 5 වැනිදා ලක්ෂ්මන් කදිර්ගාමර් කෙන්ද්‍රයේ , ලයිට් හවුස් ශ්‍රවණාගාරයේ, කොළඹ 07දී එළිදක්වනු ලබනවා. එම අධ්‍යන වාර්ථාව නම් කර තිබෙන්නේ “Legal and Regulatory Barriers for Micro and Small Entrepreneurs” (කුඩා  ව්‍යාපාරිකයින්ට බාධා කරන නීති සහ රෙගුලාසි) යන නමින්. මේ වාර්ථාව "පොඩි බිස්නස් පොඩි කරන රතු පටි රෙගුලාසි" යන දීර්ඝ ව්‍යාපෘතියක ආරම්භයයි. ඒක පුද්ගල ව්‍යාපාර සහ හවුල් ව්‍යාපාර අන්තර්ජාලය ඔස්සේ පහසුවෙන් ලියාපදිංචි කිරීම ගැන මෙම වාර්තාවෙන් අවධානය යොමු කරනවා. 

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Captial News: யாழ்ப்பாண பல்கலைக்கழக மாணவன் வெற்றி

It's more difficult to register a small business than a limited company: Advocata

Originally appeared on Lanka Business Online, Sunday Times, Yukthiya, Economy Next, The Morning, Ceylon Today, Daily FT, and Capital News

Advocata Institute launches report on regulations to small business and Red Tape Project

COLOMBO, Sri Lanka — Advocata Institute hosted their latest event, “පොඩි බිස්නස් පොඩි කරන කරන රතු පටි රෙගුලාසි” on the 5th of March 2020. This event served as the official launch of the Red Tape Project, the culmination of their ongoing work on removing legal and regulatory barriers faced by small and micro entrepreneurs.

The objective of the Red Tape Project is to identify, study, and advocate for the removal of legal and regulatory barriers faced by businesses in Sri Lanka. As a first step towards the process, Advocata launched a report on ‘Barriers to Micro and Small Enterprises in Sri Lanka’, as well as www.redtape.lk, a website for entrepreneurs to submit their frustrations or views on red tape and government processes and regulations that need to be removed or simplified.

The work on this project was then followed up by the #MystoryLK online competition, where Advocata asked micro and small entrepreneurs islandwide to send in essays, in Sinhala, Tamil, and English, detailing the barriers that they had faced in setting up their businesses and how they believed that the system could change to enable to reduce the issues that they faced. Advocata awarded the winners of the competition at the event. The competition was won by Madasamy Suventhiran. Second place was awarded to Vikum Rajapakse and third place to Elijah Hoole.

The report, ‘Barriers to Micro and Small Enterprises in Sri Lanka’ provides an understanding of the landscape of micro and small enterprises in the country, drawing from an island-wide survey. The survey highlights the various regulatory barriers that these enterprises face, ranging from issues of finance, registration, space and labour. The report focuses on addressing one of these barriers and proposes recommendations to streamline and rationalise the process of registration for sole proprietors and partnerships.

The event also hosted a panel discussion with Dr S. Rajapatirana (Chair, Academic Programme, Advocata Institute), Milinda Rajapaksha (Councillor, Colombo Municipal Council) and Achala Samaradiwakara (Co-Founder and Managing Director, Good Market). The panel was moderated by Dhananath Fernando (COO, Advocata Institute).

Read this article in Sinhala here.

Efforts of a small entrepreneur who struggled through war and personal tragedies

Originally appeared in the Sunday Times

The Advocata Institute, an independent policy think tank based in Colombo, recently launched a report titled ‘Barriers to Micro and Small Enterprises in Sri Lanka’, based on a survey. The barriers – commonly known as ‘Red Rape’- , often results in officials enforcing regulations through bribery and corruption.

However this story is not about the Advocata or barriers or failures, but about a courageous and determined youth who successfully penetrated the barriers and become an exporter to 38 countries through his product – ‘crushed coconut husk dust’.

Advocata conducted an essay competition among 100s of prospective micro entrepreneurs to write about their woes in the process of making the application. Among those competitors 10 consolation awards and awards for the 1st, 2nd and 3rd were given. The overall winner of this essay competition was 27 year-old Madasamy Suventhiran from Kilinochchi.

He was born to a family of eight with mother and father and in 2002 his three brothers were killed due to a bomb blast. After 2009 his father went missing. Two other sisters are married and living separately and even now his mother is lame due to gunshot injuries.  How he and his mother are carrying on now and their survival facing untold odds during a brutal war is what his story is all about.

In 2011-12 when he was 17 years and while studying for the A Levels he commenced work as a labourer for sustenance, working only on Saturdays and Sundays as he was then a student.

He was engaged as a construction work helper for a stipend of Rs. 700 per day and simultaneously engaged in agricultural work during paddy harvesting time and then his daily wage was around Rs. 1,000.

Desperate and struggling for survival, he unfortunately lost half his right hand when it got stuck in a harvesting machine on March 13, 2014.

After ALs, he joined a university to do an Economics Special and got through and is now expecting to read for a postgraduate Economics Special. After the accident, he changed writing with his left hand.

At one stage when he found that the present way of earning was not satisfactory, he shifted to rearing chickens on a small loan first, buying 50 broiler chicks that were grown for 45 days and sold.

He went on increasing the numbers from 50 then 100 and 200 etc and started selling 100 chickens per month, each chicken weighing 3 to 4 kg and selling a kilo at the rate of Rs. 325 live-weight, making an income of around Rs. 32,000 per month.

By then feed prices started spiraling from Rs. 2,500 a 50 kg bag to Rs. 4,500 compelling Mr. Suventhiran to look for another source of income.

He then began rearing milk cows, first starting with two and increasing it to 10, and supplying 25 to 35 litres of milk per day at the rate of Rs. 68 per litre. This activity was helped through loans from the Bank of Ceylon from Rs. 50,000, then Rs.100,000 climbing to Rs. 500,000.

Again disaster stuck when during the major floods in 2008 he lost three cows and two calves, threatening his dairy business.

Finding a new way to stay in some business, in 2019 he was able to obtain a loan of Rs. 1 million to float his new venture of crushing the coconut husk into dusty pieces using one machine and two workers operating from either side of the machine.

It is a micro enterprise employing around five in his tiny factory. He is now exporting the packed final product to 38 countries through an intermediary shipping more than 10,000 kilos at the rate of Rs. 6 per kilo.

These are the unsung heroes of Sri Lanka’s small and medium scale economy who need much support and encouragement from the authorities.

Advocata to launch Red Tape Project next Thursday 05th of March

Originally appeared on Citizen, Daily FT, Daily News, and Daily Mirror.

COLOMBO, Sri Lanka — Advocata Institute will be hosting their latest event, “පොඩි බිස්නස් පොඩි කරන කරන රතු පටි රෙගුලාසි” on the 5th of March 2020, 6.00 PM onwards at the Lighthouse Auditorium and Lawns (LKI, 24, Horton Place, Colombo 07). This event will officially launch the Red Tape Project, and will be the culmination of their ongoing work on removing legal and regulatory barriers faced by small and micro entrepreneurs.

The objective of the Red Tape Project is to identify, study, and advocate for the removal of legal and regulatory barriers faced by businesses in Sri Lanka. As a first step towards the process, Advocata will be launching a report on “Legal and Regulatory Barriers for Micro and Small Entrepreneurs”. The event will also feature the launch of a website for entrepreneurs to submit their frustrations or views on red tape and government processes and regulations that need to be removed or simplified.

The event will host a panel discussion among government stakeholders, policy makers and entrepreneurs, where barriers faced and reforms recommended will be discussed. Panelists include Dr. Sarath Rajapatirana (Chair, Academic Programme, Advocata Institute); Milinda Rajapaksha (Councillor, Colombo Municipal Council); Achala Samaradiwakara (Co-Founder and Managing Director, Good Market) and a Representative from the President’s Office.

As a component of this project, Advocata Institute hosted the #MystoryLK online competition where business entrepreneurs islandwide submitted stories of the barriers they faced when starting and running a business in Sri Lanka. The winners of this competition will also be announced and awarded at the event. The individual whose story wins first place will receive LKR 100,000. Second place will receive LKR 50,000, and third place will receive LKR 25,000. In addition to this, all shortlisted entries will receive valuable consolation prizes.

FREE EVENT! Date: March 5th (Thursday) 2020, 6PM onwards

Venue: Lighthouse Auditorium and Lawns (Lakshman Kadirgamar Institute) Limited seating,

RSVP here!

Read this article in Sinhala here.

Sri Lanka performs poorly on Economic Freedom - focus on open trade is crucial: Advocata

First appeared in Lanka Business Online, Ceylon Today, Daily News, and Daily Mirror

COLOMBO, Sri Lanka — Sri Lanka currently ranks 104 out of 162 countries for Economic Freedom (Economic Freedom of the World Index, 2019). This is a 7 step drop from last year’s ranking, 97. H.E. The President, in his Independence day address to the nation promised “I not only respect your freedom, but I will work towards improving it and guarantee the political and economic freedom in a truly democratic country”. Advocata commends this line of thinking and believes his vision can be achieved through the recommendations below.

Economic Freedom is the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately owned property.

Comparatively, Hong Kong and Singapore, occupy the top two positions in the Index. The Index also concludes that nations that are economically free out-perform non-free nations in indicators of well-being. For example, nations in the top quartile of economic freedom (like Hong Kong, Singapore and New Zealand) had an average per-capita GDP of $36,770 in 2017, compared to $6,140 for bottom quartile nations (like Sudan, Libya and Venezuela).

Sri Lanka’s rank in the indicator “Freedom to trade internationally” is alarmingly poor, ranking 113 out of 162 countries. When governments impose restrictions that reduce the ability of their residents to engage in voluntary exchange with people in other countries, economic freedom is diminished. Not only does Sri Lanka enforce exorbitant taxes on imports, trade facilitation in the country is poor.

Recommendations:

• Replace Sri Lanka’s complex tariff system with a low and uniform tariff rate.

• Implementation and improvement of the National Single Window for trade, which will allow all parties involved in trade and transport to lodge standardized information and documents at a single-entry point to fulfil all import, export and transit-related regulatory requirements.

• Reforming the Customs Ordinance. The National Export Strategy mentions that a new Customs Act, which is in line with international standards for trade facilitation, has been drafted but this hasn’t progressed beyond this stage.

“Imagine a world where there is economic freedom, anyone can enter the market place, anyone can start a business, the only way a business can get customers is by producing goods and services that are better than the other producers. This gives consumers a whole range of choice. ”

— Fred MacMahon, Fraser Institute

Access the full report here.

DevEx mentions Advocata in "State capability and liberty must advance together to end poverty".

Matt Warner, the president of the Atlas Network, recently quoted Advocata Institute’s work in Sri Lanka in an interview with DevEx. DevEx is a media platform for the global development community. It is also the largest provider of recruiting and business development services for global development.

In Sri Lanka, Advocata Institute worked with policymakers to eliminate a tariff on sanitary napkins after seeing the effect artificially high prices had on female workforce participation and school attendance in rural areas.

The article can be accessed here.

Recent Sri Lankan Airlines corruption scandal reveals need for deeper structural reform in State Enterprises - Advocata

First appeared in The Island, Sunday Times, Daily FT, Lanka Business Online, Ada Derana, Daily News, Newswire, Colombo Page, The Island, and Daily Mirror

Weak governance has led to large scale corruption in state enterprises. Sri Lankan airlines has made Rs. 169 billion in losses since nationalisation in 2009.

COLOMBO, Sri Lanka — It has recently been revealed that Airbus SE paid the wife of a Sri Lankan Airlines Executive US$ 2 million, out of a US$ 16 million bribe over a large Airbus deal. Following this, President Gotabhaya Rajapaksa has ordered an inquiry over these allegations. While Advocata welcomes the President’s decision to order investigations, we also urge the government to attend to the deep-rooted issue of systemic misgovernance embedded in Sri Lanka’s State Owned Enterprises (SOEs).

SOEs such as SriLankan Airlines continue to remain some of the largest burdens on Sri Lanka’s debt-ridden treasury. Sri Lankan Airlines has accumulated a net loss of Rs. 17.2 billion solely for the year 2018 (Ministry of Finance Annual Report, 2018). To date, the airline has accumulated losses of Rs. 169 billion since nationalisation in 2009.

In 2018, a special report on the airline by the Auditor General’s Department found various accounts of malpractice across the enterprise, including:

• Failure to follow procurement guidelines in the selection of consultative companies

• Failure to introduce formal control systems for the implementation of plans

• Lack of proper cost-benefit analysis in validating expansion of the fleet of aircrafts

• Failure to conduct proper analysis on the method of selection for acquiring aircrafts

• Failure to follow government procurement guidelines in the acquisition of aircraft

Advocata’s recent report on The State of State Enterprises in Sri Lanka reveals that SOEs are vulnerable to mismanagement and corruption because of potential conflicts between the ownership and policy-making functions of the government, and undue political influence on their policies, appointments, and business practices, as evidenced by the recent Sri Lankan Airlines scandal. Recommendations to address serious problems in procurement:

• Proper functioning of the National Procurement Commission. Commission should be independent and should enforce their mission of formulating “fair, equitable, transparent competitive and cost effective policies, procedures and processes for the procurement of goods and services, works, consultancy services and information systems performed by the Government Institutions in a timely manner.”

• Implementing E-Government Procurement to address prevailing constraints in Sri Lanka’s public procurement marketplace pertaining to information asymmetries, anti-competitive practices, and high transaction costs (Verite Research, 2017)

• Introducing Procurement Auditing to public procurement to prevent fraud and ensure reliable financial reporting (Sri Lanka Auditor General’s Department Procurement Audit Manual, 2016)

“There is no pride having a corrupted and a loss-making airline burdening the taxpayer. It’s a national liability rather than a national asset. A national financial crime rather than a national pride. There is institutionalised corruption, mismanagement and lack of accountability in these enterprises that demand urgent reform” - Dhananath Fernando, Chief Operating Officer, Advocata Institute.

Pulse mentions Advocata in "The Conditions Of Developing Enterprises In Sri Lanka" video

Pulse mentions Advocata Institute’s recent findings on legal and regulatory barriers to micro and small entrepreneurs in their latest video on the “The Conditions of Developing Enterprises in Sri Lanka”. This video also mentions an ongoing online competition by Advocata called #MyStoryLK.

Advocata calls for entrepreneurship stories

First appeared in Lanka Information, Ceylon Today, and Daily Mirror.

The economic contributions of MSEs are seen as one of the major driving forces pushing economic growth.

However, regulations that govern these businesses can be a deterrent. In order to gain a deeper understanding of the issues faced by Sri Lanka’s small businesses, Advocata is launching a story competition within this study.

It invites individuals to submit their 600-800 word stories, be it personal or about someone they know, on the barriers faced by MSEs today.

The stories should also detail changes to the current system entrepreneurs think are needed, in order to overcome these challenges.

Stories are accepted in Sinhala, Tamil, or English. The individual whose story wins first place will receive LKR 100,000. Second place will receive LKR 50,000 and third place will receive LKR 25,000.

In addition to this, all shortlisted entries will receive valuable consolation prizes. The judges for this competition include Achala Samaradiwakara, Rukmankan Sivaloganathan, and Anushka Wijesinghe.

Further information can be found on the competition website More details: https://mystory.advocata.org/