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 .

Read the full article

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.

Read the full article

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. 

Read the full article

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/

Share your story of entrepreneurship to help to remove regulatory and legal barriers to small and micro businesses!

First appeared in Daily FT , and Daily News.

Advocata Institute recently launched a study on removing barriers to micro and small entrepreneurs (MSEs) through regulatory and legislative reform. 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. We invite individuals to submit their 600-800 word story, 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. 

Small businesses make up over 90% of the total businesses in Sri Lanka.  Not only do they employ close to 45% of total employment, they also contribute tremendously to our economy. A recent survey carried out by the Advocata Institute found that some of the main barriers to entrepreneurship are sourcing finance, sourcing raw materials, and low sales. Out of the businesses that had not been registered, 36% reported that they had tried to register but had failed due to the complex procedures that were involved.

Stories for the competition can be submitted through email to info@advocata.org, with the subject ‘My Entrepreneurship Story, Name’. Stories can also be submitted by sharing a public post on Facebook, Instagram or Twitter with the hashtag #MystoryLK, or by sending a direct message to @advocatainstitute on Facebook or @advocatalk Instagram. Further information can be found on the competition website 

More details: https://mystory.advocata.org/

57% of Sri Lankans unwilling to pay higher food bill to protect local industry - Advocata Survey

First appeared in Republic Next, Daily News, Daily Mirror, Daily FT , and Ceylon Times

A survey commissioned by the Advocata Institute in April 2019 revealed that 57% of Sri Lankans were unwilling to pay extra for food, even if it meant that the local agricultural industry would be protected. 

This survey covered 855 respondents in 18 districts within 8 provinces in Sri Lanka. The demographic variables considered were age, gender, educational qualification, socio-economic class, and monthly household income.

The survey also revealed that the lower the Socio-Economic Category (SEC), the less willing respondents were to pay extra for their food, to protect the local industry. SEC is the category an individual falls into based on their education and occupation. It was only in the highest SEC where 51% answered ‘yes’, agreeing to incur a higher cost of living at the cost of protectionist taxes. SECs following it were increasingly reluctant to pay more for food, even if it meant that local businesses were protected. 

Lower-income households spend most of their income on food according to the Household Income and Expenditure (HISE) Survey.  The lower the income level higher the proportion of their expenditure on food-related items. 

The survey also noted differences across provinces. Respondents from the North Central and Sabaragamuwa provinces were more willing to incur higher food costs, with 64% from the North Central Province and 61% from the Sabaragamuwa Province answering ‘yes’. In contrast, only 22% of respondents from the Southern Province and 24% from the North Western Province answered ‘yes’. 

Interestingly, 72% of males were unwilling to bear the burden of a higher cost for food according to the survey. To put this into perspective, Sri Lanka has 4 million male-headed households (Household Income and Expenditure Survey, 2016).

Below is a breakdown of tariffs on ingredients used everyday by Sri Lankans: 

Key Points:

• 57% of people were not willing to pay more for their food, even if it meant that the local industry is protected. 

• Socioeconomic classes B,C,D and E were less willing to incur higher costs for food, resulting from exorbitant tariffs.

“Sri Lanka has a high cost of living compared to its peers in the region. Tariffs and protectionist taxes on food items, some close to 100% mean that consumers will continue to suffer at the expense of ill-framed policy” - Dhananath Fernando, Chief Operating Officer, Advocata Institute.  

The complete survey can be accessed on our website. 

Survey reveals that 81% of Sri Lankans claim that state enterprises do not provide enough services to justify losses

Advocata Research Analyst, Aneetha Warusavitarana was featured on News 1st’s Prime Time English News where she explained the findings of Advocata’s latest public opinion poll on State Owned Enterprises.

855 respondents across 8 provinces were asked the question “Do you think the losses sustained by state enterprises are justified given the services they provide?” To which, 81% answered “No”.

Survey finds 81% of Sri Lankans claim that state enterprises do not provide enough services to justify losses

First appeared in Economy Next, Republic Next, Daily Mirror, Daily News, and Daily FT.

A door to door public opinion poll conducted earlier this year covering 855 respondents in 8 provinces of Sri Lanka reveal that an overwhelming majority of Sri Lankans believe that the losses sustained by State-Owned Enterprises are not justified, compared to the services they provide.

The poll found no significant differences among income, gender or socio-economic groups. Respondents from the Central Province were more likely to believe that the services provided justified losses, with 39% holding this opinion. Those from the Southern and Western Provinces were least likely to believe that the services justified losses, with only 6% from the Southern Province and 12% from the Western Province saying the losses were justified.

According to the Third Report of the COPE, the 18 SOEs with financial statements investigated in the report made a net loss in 2018 amounting to Rs. 61 billion. The report highlights that the Ceylon Petroleum Corporation alone made an enormous loss of Rs. 105 billion in 2018, while the National Water Supply and Drainage Board incurred a loss of Rs. 505 million, and Elkaduwa Plantation Ltd. incurred a loss of Rs. 33 million. Of the 23 institutions being examined, five were found to have annual losses over Rs. 2 million, while another five did not have end-of-year financial statements to present.

A recent report by the Advocata Institute “The State of State Enterprises in Sri Lanka - 2019” highlighted 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. The report recommended that the government actively engage in strengthening SOEs and their service delivery by compiling a comprehensive list of all SOEs and setting basic reporting procedures; strengthening COPE and COPA; and implementing the internationally accepted Principles of Corporate Governance.

The complete survey can be accessed here.

Advocata Institute welcomes new selection committee for State Enterprises

First appeared in Sunday Observer, Daily Mirror, Lanka News Web, Daily FT , Daily News and The Island

COLOMBO, Sri Lanka — Advocata Institute welcomes the newly appointed selection board to screen appointments for State-Owned Enterprises (SOEs). The attention given to the massive losses incurred by SOEs in Sri Lanka and the new government’s commitment to making SOEs profitable is to be commended. Distancing politicians from SOE boards is a good first step towards improving accountability and independence in SOEs.

Sri Lankan SOEs are in dire need of reform. The country has an excessive 527 enterprises, a list that covers a convoluted web of subsidiaries and sub-subsidiaries. Tracking the financials of these enterprises is a mammoth task that is yet to be undertaken. The Ministry of Finance tracks the financials of only 55 ‘Strategic SOEs’ and the losses accumulated by what is only 10.4% of all enterprises amounts to a staggering Rs. 156,734 million, only for the year 2018. 

These losses are facilitated by weak governance systems where SOEs have limited checks and balances placed on them. The lack of oversight and accountability has meant that these SOEs are vehicles for corruption. Politicians are able to use SOEs as an opportunity to grant jobs and distribute perks for political capital.

Screening appointments to state enterprises by an independent panel is a step in the right direction, and would hopefully translate into responsible management of taxpayers money in these SOEs. The Advocata Institute welcomes further SOE reform detailed in the President’s manifesto to consolidate state enterprises and establish a National Enterprise Authority. 

We hope the government would turn its attention to further reforms that strengthen SOE governance, such as compiling a comprehensive list of entities through the Department of Census and Statistics, establishing a framework for monthly reporting on key performance indicators, and incorporating the internationally accepted principles of corporate governance in the management of these entities.  In addition to this, the Advocata Institute urges the government to open committee meetings to the public to increase scrutiny and accountability. 

The Advocata Institute wishes to extend our congratulations to the newly sworn-in President Gotabaya Rajapaksa, and Prime Minister Mahinda Rajapaksa. We wish the President,  the Prime Minister and the new government the best in their efforts to establish meritocracy, improve government efficiency and promote prosperity. Advocata Institute looks forward to engaging with the new government with public policy ideas to ensure economic freedom and prosperity for all Sri Lankans. 

Book Launch: Return to Sri Lanka: Travels in a Paradoxical Land

Prof. Razeen Sally is an Associate Professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore. He is also on the Board of Advisors at the Advocata Institute and is the Director of The European Centre for International Political Economy (ECIPE), which he co-founded in 2006. 

He was on the faculty of the London School of Economics for eighteen years, where he also received his PhD. He has held adjunct teaching, research and advisory positions at universities and think tanks in the USA, Europe, Africa and Asia. He is on the Global Agenda Council for Competitiveness of the World Economic Forum, and was awarded the Hayek Medal by the Hayek Society in Germany in 2011. He is a member of the Mont Pelerin Society.

Razeen Sally’s research and teaching focuses on global trade policy and Asia in the world economy. He has written on the WTO, FTAs, and on different aspects of trade policy in Asia. He has also written on the history of economic ideas, especially the theory of commercial policy.

His academic and advisory work has taken him around the world, but, in his early forties, he felt Sri Lanka calling him back for the first time since childhood. He has spent the last decade travelling all over the island. Sri Lanka seemed like a version of paradise to Razeen Sally as a child, but conflict was soon to follow, tearing the family apart and severing their bond with Sri Lanka. 

His latest book, ‘Return to Sri Lanka’ is the story of a twenty-first-century reconciliation between Sally, now an academic and political adviser, and the land of his birth.

Available for purchase: https://www.juggernaut.in/books/9789353450618

Advocata supports recommendation to allow AG dept representation at COPE proceedings

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

Advocata welcomes the recommendation to include representatives of the Attorney General’s (AG) Department at Committee on Public Enterprises (COPE) proceedings and urges the government to prioritise this suggestion. The third report of the COPE was presented to the parliament on the 23rd of October, 2019. While presenting the latest report, its chair Hon. Sunil Handunetti MP requested the speaker to allow the AG department representatives to observe the proceedings of the COPE in efforts to expedite the accountability of those responsible. 

“With the current burden of debt Sri Lanka is holding onto, we cannot afford to continue to bail out loss making SOEs. The CPC loss of Rs. 105 billion needs to be inspected and COPE along with the government of Sri Lanka needs to ensure that our treasury does not continue to bail out these SOEs as our fiscal capacity cannot continue to sustain this.”

— Dhananath Fernando, Chief Operating Officer, Advocata Institute

Currently, Sri Lanka’s debt amounts to 82.9% of GDP (Ministry of Finance Annual Report, 2018, Provisional Data). With domestic debt amounting to 41.6% of GDP (Ministry of Finance Annual Report, 2018), our treasury cannot sustain annually bailing out loss making SOEs. Advocata strongly believes that Sri Lanka needs to reduce waste that happens by way of SOE losses, corruption and monumental investments with poor rate of return. 

The COPE is a key committee that oversees SOEs in Sri Lanka.  The duty of the Committee is to examine the accounts of the Public Corporations and of any business undertaking vested in the government. The third report of the COPE highlights that the Ceylon Petroleum Corporation made substantial losses of Rs. 105 billion in 2018. Furthermore, it also reveals that losses made by the National Water Supply and Drainage Board amounted to Rs. 505 million  and losses made by the Elkaduwa Plantation Limited amounted to Rs. 33 million. 

Since the opening of COPE proceedings to the media in August 2019, there has been a significant increase in scrutiny of the conduct and financials of loss making State Owned Enterprises (SOEs) in mainstream discussions. This has promoted the transparency of the hearings as well as accountability of the respective SOEs and the COPE to the final decisions of these sessions. 

Advocata Institute’s 2019 report, “The State of State Enterprises: Systemic Misgovernance”, highlighted the imminent need of strengthening COPE as a means of managing the losses and misconduct by SOEs. Ensuring that there is representation from the Attorney General’s department at COPE proceedings will fortify that the recommendations of the proceedings will be implemented. 

Advocata Institute urges that further reform be considered seriously in efforts to improve structural failings and misgovernance that promote a breeding ground for corruption in Sri Lanka’s state sector. Advocata urges that the government opens committee proceedings to non parliamentarians;  specifically for technical experts, to bring in industry knowledge and scrutiny. 

Key Points:

• Advocata welcomes the recommendation to allow AG department officials to observe COPE proceedings. 

• Opening COPE proceedings to the media brought about substantial scrutiny of SOEs conduct and losses which is essential to ensuring that the recommendations of the COPE reports are adhered to.

• The duty of the COPE is to examine the accounts of the Public Corporations and of any business undertaking vested in the government.

• Sri Lanka’s debt amounts to 82.9% of GDP. With domestic debt amounting to 41.6% of GDP, Sri Lanka fiscal capacity cannot sustain the bailing out of loss making SOEs, annually. 

• Advocata urges the government to further consider reform to strengthen the COPE. We recommend that COPE proceedings be open to non parliamentarians;  specifically for technical experts, to bring in industry knowledge and scrutiny.

Prof. Amal Kumarage, Dr. Saman Widanapathiranage and Mr. Sarath Jayatilaka's insights on $480 million MCC compact projects

The Advocata Institute hosted a public forum on the MCC compact “එම්.සී.සී. ගිවිසුම ගැන ඇත්ත නැත්ත” on the 19th of September, with the aim of separating fact from fiction around this hotly debated topic.

By 2030, the number of vehicles on our roads will triple. Prof. Amal Kumarage, the Head of the Dept of Transport and Logistics Management of the University of Moratuwa, emphasizes the immediate need to improve our public transport systems.

---

Colombo’s traffic problem has become a serious issue in the past few years. Dr. Saman Widanapathiranage, Deputy Director, Highway Designs at the RDA explains that by 2030, our average speed around Colombo will fall to at least 10 km/h.

---

Mr. Sarath Jayatilaka, Former Deputy Surveyor General, explains the $67 million land component of the MCC Compact.

---

Link to full video: https://youtu.be/FZKveXeXQJU

MCC ගිවිසුම ගැන ඇත්ත නැත්ත - Event Video

The Advocata Institute hosted a public discussion on the MCC Compact with technical experts, MCC representatives and the Government to separate fact from fiction around the Compact.

The event was held on the 19th of September at the Lighthouse Auditorium and Lawns.

Local experts offer insights on $480 million MCC compact projects

First appeared in Sunday Morning, Sunday Observer, News First, Daily Mirror and Economy Next

The Advocata Institute hosted a public forum on the MCC compact “එම්.සී.සී. ගිවිසුම ගැන ඇත්ත නැත්ත”  on the 19th of September, with the aim of separating fact from fiction around this hotly debated topic. 

Since 2015, Sri Lanka was engaged in a competitive selection process for the  Millennium Challenge Corporation (MCC) grant. In April 2019, Sri Lanka was awarded a grant from the Millennium Challenge Corporation (MCC) for USD 480 million. Since the awarding  of the Compact, concerns around the agreement had gone unaddressed.

To help provide a public platform for the addressal of these concerns, The Advocata Institute convened an open discussion with experts involved in designing the projects for the MCC Compact, Prof. Amal Kumarage (Head of the Department of Transport and Logistics Management, University of Moratuwa); Dr. Saman Widanapathiranage (Deputy Director, Highway Designs at the Road Development Authority (RDA) and Mr. Sarath Jayatilaka (Former Deputy Surveyor General); MCC representatives, Ms. Jenner Endleman (Sri Lanka Resident Country Director - Millennium Challenge Corporation) and the Government, Dr Jagath Munasinghe (Chairman, Urban Development  Authority). 

The experts highlighted the technical details of the Land and Transport Management projects in the grant followed by a Q&A with representatives of the MCC and the Government. 

Prof. Amal Kumarage explained that out of USD 350 million allocated to the Transport Project, USD 50 million would be spent on Bus Services Modernization. He stated that by 2030, the number of vehicles on our roads will triple and it is crucial for our transport system to reflect this. 

Dr. Saman Widanapathiranage (Deputy Director, Highway Designs at the Road Development Authority (RDA) discussed the Advanced Traffic Management System component in the Transport Project. He stated how average speed in Colombo will reduce to 10kmph by 2030, communicating the urgency of improving the city’s traffic management. 

Mr. Sarath Jayatilaka (Former Deputy Surveyor General) detailed the Land Project in the compact which amounts to USD 67 million of the total grant. Since the Sri Lankan government owns 82% of all land and the remaining 18% land is privately owned, he emphasised the importance of developing a State Land Bank to improve land administration policies. 

Joining the Q&A, MCC Sri Lanka Resident Country Director Ms. Jenner Endleman answered some concerns around the compact. To the question of whether the MCC Compact is linked to military agreements, she answered that MCC has no relation to ACSA or SOFA and that the MCC Compact was ready for signing before the renewal of these military agreements. Another question posed was why the Compact was not available in the public domain and that she stated that itis the MCC’s policy to not share the document prior to it being signed by the recipient government. However, she urged concerned citizens to reach out to the Government to release these documents, as they are in a position to share the agreement. 

“In our 15 year history, we’ve never had a situation where an eligible country has come to us and proposed a grant, our board has accepted it, and that same partner country has not approved it” stated Mr. Endleman addressing questions from the audience. 

69th Anniversary Oration of the Central Bank of Sri Lanka by Prof. Razeen Sally

Prof. Razeen Sally, Associate Professor of the Lee Kuan Yew School of Public Policy of the National University of Singapore delivered the 69th anniversary oration at the Central Bank of Sri Lanka.