00:01 uh good evening everyone i'm rihanna 00:03 00:03 tawfiq and i'd like to welcome you to 00:06 00:06 the first 00:08 00:08 chat of advert chats 00:10 00:10 this is a recurring live series of 00:12 00:12 discussions that advocate has initiated 00:16 00:16 the design of the program is meant to 00:18 00:18 you know discuss current economic 00:20 00:20 conversations um which we can tackle in 00:23 00:23 a way that suits a very diverse advocata 00:27 00:27 audience 00:28 00:28 at times like this we want to encourage 00:31 00:31 uh you to initiate conversations and ask 00:34 00:34 questions um and take part in these much 00:37 00:37 needed discussions um so 00:40 00:40 in that in that effect we'll be taking 00:42 00:42 in some will be taking in questions from 00:45 00:45 the audience if you will 00:47 00:47 just look at the bottom uh right of your 00:50 00:50 screen you'll notice a question mark 00:52 00:52 chat box so you can send in your 00:54 00:54 questions um over there 00:56 00:56 alternatively if you don't have access 00:58 00:58 to that you can always send us the 00:60 00:60 questions on the comment section 01:03 01:03 so in today's 01:04 01:04 session economic reforms the need of the 01:07 01:07 hour we'll be discussing the need for 01:09 01:09 economic reforms in sri lanka in the 01:12 01:12 present climate present climate and 01:14 01:14 obviously the urgency of such reforms 01:18 01:18 so today we have joining with us daniel 01:20 01:20 alfonsus daniel was an advisor to sri 01:24 01:24 lanka's finance minister 01:26 01:26 he worked previously at the foreign 01:28 01:28 ministry and at verite research 01:30 01:30 he read philosophy politics and 01:33 01:33 economics at balliol college oxford and 01:36 01:36 public policy at harvard kennedy school 01:39 01:39 where he was a fulbright scholar 01:41 01:41 welcome daniel 01:43 01:43 um thank you very much for having me 01:48 01:48 of course so i guess to set the sort of 01:50 01:50 set the stage i guess 01:52 01:52 just if we could i i guess i can ask you 01:54 01:54 the first question it would be you know 01:56 01:56 what does economic reform really mean 01:60 01:60 well that's a very broad question and 02:02 02:02 let's let's uh narrow it down to the sri 02:04 02:04 lankan context um 02:07 02:07 what does reform mean 02:09 02:09 it basically means 02:11 02:11 doing the changes necessary 02:13 02:13 to address the crisis that we're in 02:16 02:16 and to in a sort of longer term put sri 02:20 02:20 lanka onto a path back onto the path of 02:24 02:24 prosperity that it embarked on basically 02:26 02:26 in 1977. 02:31 02:31 okay so just a reminder to the audience 02:33 02:33 please submit your questions uh to the 02:36 02:36 question check box or the comment 02:38 02:38 section so we really want you to get 02:40 02:40 involved in the conversation 02:42 02:42 uh so yes please do that um all right so 02:47 02:47 like the next question i guess is in 02:49 02:49 your opinion what do you think are the 02:51 02:51 top three economic reforms that are most 02:54 02:54 urgent and crucial crucially needed in 02:57 02:57 sri lanka 02:58 02:58 at the present context 03:00 03:00 so in the in the current context i think 03:02 03:02 the first one is the most 03:04 03:04 sort of pregnant issue which is the 03:07 03:07 issue of debt and sri lanka's debt to 03:09 03:09 gdp ratio is now in excess of 110 03:12 03:12 percent um as the 03:14 03:14 sort of interest payments as a share of 03:17 03:17 government revenue are over 70 03:19 03:19 plus percent um so this is clearly 03:22 03:22 unsustainable debt uh sri lanka has 03:24 03:24 reached a position for the first time in 03:26 03:26 its post-independence history where it 03:28 03:28 is insolvent 03:30 03:30 where just a a and the usual imf program 03:34 03:34 of giving um 03:56 03:56 did that come across 03:59 03:59 yes 04:01 04:01 uh can you hear me okay um yes the much 04:04 04:04 dreaded power cut 04:07 04:07 no no problem um 04:09 04:09 so 04:10 04:10 so uh 04:13 04:13 we have a solvency problem for the first 04:14 04:14 time in our history um 04:17 04:17 and and that means something needs to to 04:20 04:20 give way and 04:22 04:22 what we need to do i think at this 04:24 04:24 juncture is we can't keep kicking the 04:26 04:26 can down the road um what we are 04:29 04:29 probably we're almost certainly going to 04:31 04:31 face a default at some point the the 04:33 04:33 question is whether it's in six months 04:35 04:35 one year one and a half years two years 04:37 04:37 um that's that's sort of the question 04:38 04:38 but if you accept the proposition that 04:41 04:41 sridhanka is going to default then i 04:44 04:44 would submit that it makes sense to 04:46 04:46 default sooner rather than later and the 04:49 04:49 reason for that is threefold first 04:52 04:52 is you don't have to go through the 04:54 04:54 suffering that currently people are 04:56 04:56 going through at the moment of uh you 04:58 04:58 know scarce commodities um 05:01 05:01 the the uncertainty um the the 05:05 05:05 the chaos that actually is is currently 05:07 05:07 there and you can begin the recovery 05:09 05:09 process sooner rather than later 05:11 05:11 because if you're going to have to do 05:12 05:12 those same measures two years from now 05:15 05:15 you might as well start it today 05:17 05:17 that's the first point the second point 05:19 05:19 is 05:20 05:20 you can also 05:22 05:22 plan for that process a little bit 05:23 05:23 better if you are in control of the 05:26 05:26 calendar of when these things take place 05:28 05:28 you can get advice in advance um 05:32 05:32 the default can be a more managed 05:33 05:33 process and linked to that is also the 05:36 05:36 question of resources we still have some 05:38 05:38 reserves you don't want to default at a 05:40 05:40 point where you have zero reserves um 05:43 05:43 and and then you have all kinds of uh 05:45 05:45 the the the problems you face when you 05:47 05:47 default are just exacerbated when when 05:50 05:50 you don't have that so um that's that's 05:53 05:53 the first point in terms of reforms i 05:55 05:55 think we should probably go for a 05:57 05:57 default at least very very seriously 05:58 05:58 consider that as as uh 06:01 06:01 an option 06:03 06:03 the second 06:04 06:04 is 06:07 06:07 almost every country that has had 06:09 06:09 convergence growth that means 06:12 06:12 growth levels that take you from third 06:14 06:14 world to first so i'm thinking of the 06:15 06:15 japans the koreas the taiwans of this 06:19 06:19 world has done so on the basis of 06:22 06:22 manufacturing exports if you look at sri 06:24 06:24 lanka's own growth the the point at 06:26 06:26 which sri lanka's own growth took off 06:28 06:28 which was in 1977 coincides also with 06:31 06:31 the growth in manufacturing exports and 06:33 06:33 and because they have this tendency to 06:36 06:36 improve productivity and once you get on 06:38 06:38 that path you just seem to keep 06:40 06:40 improving productivity within that um 06:43 06:43 and in order to do that 06:45 06:45 there's a lot of things that need to 06:46 06:46 take place but one thing that is 06:48 06:48 absolutely fundamental is tariffs right 06:51 06:51 now it's simply very expensive to 06:54 06:54 produce anything in sri lanka um and and 06:57 06:57 one of the most important reasons for 06:58 06:58 that is is tariffs um the cost of 07:01 07:01 building materials the cost of raw 07:02 07:02 materials the cost of any inputs 07:04 07:04 including labor is all significantly 07:06 07:06 affected by the very high levels of 07:09 07:09 tariffs um that make it uh sriracha is 07:12 07:12 one of the most protected countries in 07:13 07:13 the world um in terms of tariff 07:15 07:15 protection 07:16 07:16 so so i would say that's a secondary and 07:19 07:19 that's something avocado has of course 07:20 07:20 highlighted extensively over there over 07:23 07:23 the years 07:24 07:24 um and then it's a tough choice to to 07:27 07:27 pick uh three 07:29 07:29 um but if i had to pick one i think the 07:33 07:33 other major area i i would probably 07:36 07:36 argue is land um land is a very 07:39 07:39 important factor and land has a direct 07:42 07:42 relationship to agriculture 07:44 07:44 and if you look at landa location in sri 07:47 07:47 lanka a huge amount of land is owned by 07:50 07:50 the state um and 07:53 07:53 when citizens 07:54 07:54 and and companies have access to that 07:57 07:57 land it is on the basis of limited 07:59 07:59 tenure with limited rights so there's 08:02 08:02 two broad types of of non-freehold land 08:06 08:06 tenure that exist 08:08 08:08 the first is uh permit land so 08:11 08:11 uh i don't know if it's a majority but a 08:13 08:13 very very significant number of uh 08:16 08:16 people who engage in agriculture 08:18 08:18 do not own the land they they cultivate 08:21 08:21 they have uh rights to it by virtue of a 08:24 08:24 permit 08:25 08:25 um now 08:27 08:27 by translating that uh that that permit 08:29 08:29 into freehold land it will give people 08:32 08:32 the incentive to actually develop that 08:34 08:34 land and it will also allow them to have 08:37 08:37 collateral to uh to to to to invest in 08:40 08:40 it as well so that's one permit land the 08:43 08:43 second type of land where the state has 08:45 08:45 provided uh limited lease 10 years is in 08:48 08:48 the plantation sector um so as as you 08:51 08:51 know that has been the backbone of the 08:53 08:53 economy for many years now been 08:54 08:54 supplanted by 08:57 08:57 the garment sector and services more 08:59 08:59 generally but it's still a very very 09:01 09:01 important sector and there again 09:04 09:04 we see there's that our agricultural 09:06 09:06 yields are considerably lower compared 09:08 09:08 to competitors in other words our 09:10 09:10 productivity is lower and one important 09:12 09:12 reason for that is the incentive 09:14 09:14 structure for the plantation companies 09:17 09:17 replanting 09:18 09:18 one of the reasons why replanting 09:20 09:20 doesn't take place is because of the 09:22 09:22 tenure it takes seven years or eight 09:23 09:23 years to to to grow a tea brush but the 09:26 09:26 the least terms uh about 30 years it 09:28 09:28 varies from rpc to rpc um 09:32 09:32 now what i submit is that in in sri 09:35 09:35 lanka's case we take a very serious look 09:37 09:37 at this lantern in the plantation sector 09:40 09:40 um on the one hand because of the on 09:42 09:42 productivity grounds um 09:44 09:44 we could probably get significantly more 09:47 09:47 bang for buck on from that land and 09:50 09:50 secondly on welfare grounds if you look 09:52 09:52 at the the plantation community in sri 09:54 09:54 lanka they are the only community of the 09:57 09:57 four major communities in this country 09:59 09:59 that uh don't have significant land 10:01 10:01 building if you look at all the other 10:03 10:03 communities 70 to 80 percent of people 10:05 10:05 own the land they live on however in the 10:08 10:08 case of the plantation community it's 10:10 10:10 about 30 percent so there's clearly some 10:12 10:12 significant degree of injustice that's 10:14 10:14 taking place there as well so i think 10:16 10:16 those two problems could be linked 10:18 10:18 together and that would really help 10:19 10:19 solve some students very serious poverty 10:21 10:21 issues hidden poverty issues 10:24 10:24 thanks daniel so in your first in the 10:27 10:27 first priority you mentioned the debt 10:29 10:29 the debt situation and the need to 10:31 10:31 restructure do you think it's a 10:33 10:33 possibility to do that without imf to 10:35 10:35 credibly do that without the imf 10:37 10:37 intervention 10:39 10:39 so sri lanka's default if should it come 10:42 10:42 to pass will is going to be very complex 10:44 10:44 it's going to be very complex for a 10:46 10:46 number of reasons first it's the first 10:48 10:48 time sri lanka is defaulting so we don't 10:50 10:50 really have have the institutional 10:52 10:52 knowledge the expertise on how to manage 10:54 10:54 that that's one reason 10:56 10:56 the second reason is because of the 10:59 10:59 structure of the debt contracts um so 11:03 11:03 in in 11:04 11:04 the the bond 11:06 11:06 contracts have changed over time and 11:08 11:08 they have these things called collective 11:09 11:09 action agreements which basically mean 11:12 11:12 uh what share of the bondholders need to 11:15 11:15 agree on a settlement for it to be 11:17 11:17 binding on all the bondholders and we 11:20 11:20 have some of the older generation ones 11:21 11:21 that make it a little bit more harder um 11:24 11:24 to to come to agreements and that's when 11:26 11:26 you have things like what happened in 11:28 11:28 argentina where an argentine warship was 11:30 11:30 seized in ghana and all kinds of messy 11:32 11:32 things like that 11:33 11:33 so so the the structure of the contracts 11:36 11:36 um 11:37 11:37 then the third 11:39 11:39 issue you have is the fact that 11:42 11:42 the the bondholders themselves uh that 11:44 11:44 there is some complexity there so some 11:46 11:46 of the bonds are held by the sri lankan 11:48 11:48 government effectively like bank of 11:50 11:50 salon and people's bank and so on and so 11:52 11:52 forth 11:53 11:53 and then the the government de facto 11:55 11:55 exercises influence over some of the 11:58 11:58 other banks too um by virtue of 12:01 12:01 shareholding through the epf sri lanka 12:03 12:03 insurance and so on and so forth so in 12:05 12:05 in this situation 12:07 12:07 and then the law itself you might have 12:09 12:09 jurisdictional issues which jurisdiction 12:11 12:11 do you do you fight these cases in so 12:13 12:13 this is really for the lawyers but what 12:14 12:14 i'm trying to say here is it's it's a 12:17 12:17 very messy situation and and i don't 12:19 12:19 think it's one that will be 12:21 12:21 resolved very 12:23 12:23 quickly okay 12:25 12:25 we have an audience question 12:31 12:31 i just like to encourage people to send 12:34 12:34 the questions into the question box 12:37 12:37 then it's easier to 12:38 12:38 access it 12:42 12:42 um 12:45 12:45 there's one question how much blame can 12:48 12:48 be directed at 12:50 12:50 uh 12:51 12:51 director data money printing central 12:53 12:53 bank for creating regular inflationary 12:56 12:56 pressure and currency depreciation if so 12:59 12:59 how can the central bank be reformed to 13:01 13:01 prevent this 13:04 13:04 um 13:05 13:05 so i i i don't think it's fair to to 13:09 13:09 direct this to the officials of the 13:10 13:10 central bank at the very least because 13:13 13:13 with 13:14 13:14 the failed 13:16 13:16 failure to 13:18 13:18 um 13:19 13:19 to enact the monetary law parliament the 13:21 13:21 central bank's independence was not it 13:24 13:24 um secondly 13:26 13:26 the the 20th amendment reached the 13:28 13:28 independence of of uh 13:31 13:31 all public sector officials and and 13:33 13:33 therefore it's clear that the direction 13:36 13:36 comes from the political authorities 13:38 13:38 which in this country is the cabinet of 13:41 13:41 ministers who should bear responsibility 13:44 13:44 for 13:44 13:44 um the the money printing that took 13:47 13:47 place now 13:49 13:49 um 13:50 13:50 the the the question is why why is this 13:53 13:53 money printing taken place and the 13:56 13:56 reason is that the government's revenues 13:58 13:58 have 13:59 13:59 taken a massive hit 14:01 14:01 and expenditure has not been occurred 14:03 14:03 contrary to what many people think is a 14:06 14:06 low tax low spend economy um so our 14:09 14:09 taxation levels aren't particularly high 14:11 14:11 neither are expenditure levels so what 14:12 14:12 we introduce you to increase both and of 14:15 14:15 course within the 14:17 14:17 government expansion there's huge 14:18 14:18 inefficiencies and huge misallocations 14:21 14:21 and those need to be addressed as well 14:23 14:23 and we can discuss those in further 14:24 14:24 detail 14:26 14:26 but um to answer the question of whether 14:29 14:29 i certainly don't think the officials of 14:31 14:31 the bank should be blamed i think it's 14:33 14:33 something that should squarely fall um 14:35 14:35 with the cabinet of ministers 14:39 14:39 i guess that brings me to one question 14:41 14:41 whether it's possible to actually 14:43 14:43 dichotomize economic reforms from say 14:47 14:47 other forms of reform like political 14:49 14:49 constitutional 14:50 14:50 you know and other social reforms 14:52 14:52 because you touched on that point and 14:53 14:53 you said you know it's not the central 14:55 14:55 bank officials it's the policy it's the 14:58 14:58 you know it's the political landscape 14:59 14:59 that's shaping this 15:02 15:02 uh yeah i think that's that's that's 15:04 15:04 very much uh ultimately 15:07 15:07 almost any major economic decision 15:09 15:09 involves a political decision in the 15:12 15:12 sense that 15:14 15:14 there are different people on whom costs 15:17 15:17 are imposed 15:20 15:20 let's take what is 15:21 15:21 broadly considered one of the most 15:23 15:23 technical areas of economics which is 15:26 15:26 inflow interest rates this has a direct 15:29 15:29 effect a direct distribution effect 15:31 15:31 because those for whom 15:35 15:35 who are in debt unexpected inflation can 15:38 15:38 actually be quite beneficial while for 15:40 15:40 savers um inflation is is very 15:42 15:42 detrimental so so i think yes most 15:46 15:46 economic questions are intimately tied 15:49 15:49 with 15:50 15:50 questions of politics questions of 15:52 15:52 distribution questions of power 15:57 15:57 thanks daniel uh we have another 15:59 15:59 audience question do you think uh the 16:02 16:02 socialist policies like free education 16:04 16:04 and health care and other socialist 16:07 16:07 policies are a negative factor for the 16:09 16:09 economy and are those policies a reason 16:12 16:12 for the current situation 16:15 16:15 you know i certainly don't think that 16:17 16:17 i think sri lanka as investment in 16:20 16:20 education has served it broadly very 16:24 16:24 well i think there's issues of 16:25 16:25 efficiency in terms of expenditure in in 16:29 16:29 more recent years uh there are 16:32 16:32 expenditure as in public expenditure on 16:34 16:34 education and healthcare relative to our 16:36 16:36 peers has been lower which is a cause 16:38 16:38 for concern um 16:40 16:40 and and and like this whole standard 16:42 16:42 textbook argument for this which i think 16:44 16:44 works pretty well and and that is in the 16:47 16:47 absence of state allocation or state 16:50 16:50 expenditure on this we will be spending 16:52 16:52 insufficient amounts on education and 16:54 16:54 healthcare in other words obviously 16:56 16:56 there will be private expenditure on 16:57 16:57 healthcare education but it won't be the 16:59 16:59 optimal level um because of the the 17:01 17:01 public goods nature and what's meant by 17:03 17:03 public goods nature of this is um 17:06 17:06 the the the net social benefit of 17:10 17:10 spending uh uh 17:12 17:12 a rupee on education is greater um than 17:17 17:17 than the benefit that the private person 17:19 17:19 would receive or a citizen would receive 17:21 17:21 if they themselves spent that rupee so 17:23 17:23 therefore uh the government has a 17:24 17:24 greater incentive to uh to spend that 17:27 17:27 money than than a citizen and and so i i 17:30 17:30 very much think that education has been 17:33 17:33 um 17:34 17:34 in in terms of 17:36 17:36 historically not so much the last 10 or 17:37 17:37 20 years one of the success stories for 17:39 17:39 sri lanka 17:41 17:41 how how that again has been allocated i 17:43 17:43 think there's been 17:44 17:44 some inefficiencies in terms of uh 17:49 17:49 how the the 17:50 17:50 the distribution subjects if you take 17:52 17:52 for example university we have a very 17:54 17:54 large number of arts graduates and very 17:56 17:56 few in the sciences um relatively and at 17:59 17:59 a levels as well um until quite recently 18:02 18:02 there was a very very limited number of 18:04 18:04 schools where one could do sciences a 18:06 18:06 levels um and that's fortunately been 18:09 18:09 improving um but that those are very 18:12 18:12 serious issues in in education 18:15 18:15 healthcare of course i don't know very 18:16 18:16 much about at all 18:18 18:18 other than sri lanka has from what i 18:20 18:20 understand a very efficient health care 18:22 18:22 system um unlikely in the education 18:24 18:24 sector 18:26 18:26 yeah i think i absolutely agree with you 18:28 18:28 i 18:29 18:29 but i think 18:32 18:32 i mean leaving education and health care 18:34 18:34 aside those you know those are not 18:36 18:36 things that we we should change or at 18:38 18:38 least not change in terms of whether the 18:40 18:40 state should provide it but i think the 18:42 18:42 role of the state as such a big employer 18:45 18:45 in the country needs a bit of 18:47 18:47 questioning don't you think so 18:49 18:49 absolutely so if you look at 18:52 18:52 employment just look at the numbers it 18:54 18:54 took nearly 40 years for sri lanka to 18:57 18:57 double the number of public servants up 18:59 18:59 until i think it was around 2005. 19:02 19:02 then between 2005 and 2010 2015 it 19:06 19:06 nearly doubled the public sector again 19:09 19:09 so there's a huge expansion and 19:12 19:12 though 19:13 19:13 it's not like the population expanded 19:14 19:14 that much in that period um this was 19:17 19:17 essentially a form of welfare provided 19:21 19:21 uh to to to people um and i have no 19:24 19:24 objections to providing 19:26 19:26 welfare to people i just think this is a 19:28 19:28 terribly inefficient way of providing 19:29 19:29 welfare um because it also means that 19:32 19:32 you take people out of the labor force 19:35 19:35 uh and and one instance of this is the 19:38 19:38 is armed forces following the end of the 19:40 19:40 war um we have around over 280 000 men 19:45 19:45 um in in the armed forces if you take a 19:49 19:49 comparison um the uk which is a much 19:51 19:51 much larger country in terms of 19:52 19:52 population i think it's nearly three 19:54 19:54 times bigger than sri lanka has uh under 19:57 19:57 90 000 now i think now um soldiers and 19:60 19:60 army and even though they have much 20:01 20:01 greater defense commitments um 20:04 20:04 and and a significant part of that is 20:06 20:06 and it's it's not like these they risk 20:10 20:10 they're linked to any specific national 20:11 20:11 security threats that sri lanka faces 20:13 20:13 sri lanka does not face conventional 20:15 20:15 threats that require 20:17 20:17 large infantry battalions and 20:20 20:20 we we've settled all our disputes with 20:22 20:22 india in the 60s kachitivo and all of 20:24 20:24 that so there's no sort of flare-ups on 20:26 20:26 the border 20:27 20:27 so there's really no need for for this 20:29 20:29 large 20:32 20:32 infantry force and certainly no need for 20:35 20:35 such a large pity in infantry force um 20:40 20:40 so 20:42 20:42 what what almost every country has is 20:44 20:44 about 60 percent of their soldiers in 20:46 20:46 active duty and about 40 percent in the 20:48 20:48 reserves sri lanka effectively doesn't 20:50 20:50 have a result rated what's called the 20:52 20:52 volunteer force but the volunteer force 20:53 20:53 works full-time um and this is something 20:56 20:56 that is a very serious problem because 20:58 20:58 many of our most talented and 20:60 20:60 able-bodied citizens are in the army 21:03 21:03 where they're not contributing 21:04 21:04 productively to the economy or to 21:06 21:06 national security because 21:09 21:09 the they aren't corresponding to the 21:11 21:11 national security threats that we face 21:12 21:12 and as a result we don't have the 21:14 21:14 capital expenditure to invest in the 21:16 21:16 modernization of the military 21:18 21:18 intelligence uh diplomacy etc etc which 21:21 21:21 are actually the issues uh that we face 21:25 21:25 and when and when our sort of labor is 21:29 21:29 sort of a you know trapped in 21:31 21:31 unproductive work like uh you know you 21:34 21:34 said the armed forces we are actually 21:36 21:36 taking it away from certain private 21:38 21:38 sector industries that actually need a 21:40 21:40 lot of labor like at least before occur 21:42 21:42 with the tourism uh industry needed like 21:45 21:45 they had a 21:47 21:47 shortage of 21:48 21:48 lab work workers and even the 21:51 21:51 construction sector so 21:53 21:53 i think yeah we need to think uh that's 21:55 21:55 one reform that needs to you know be 21:58 21:58 thought of quite seriously 22:01 22:01 um 22:03 22:03 let's take another question from the 22:04 22:04 question box 22:09 22:09 can you see it on the screen daniel 22:12 22:12 i'm afraid i can't do you mind okay it 22:14 22:14 says 22:15 22:15 yeah sure in terms of an eventual 22:18 22:18 postcode recovery is there a lesson to 22:20 22:20 draw from america's new deal 22:25 22:25 i'm afraid i don't know very much about 22:27 22:27 america so i can't comment on 22:29 22:29 america okay 22:31 22:31 all right let's go to another question 22:32 22:32 then um 22:37 22:37 all right there's one more question is 22:39 22:39 sri lanka missing its chance to get into 22:41 22:41 manufacturing exports due to its aging 22:44 22:44 population 22:46 22:46 this is a very interesting and it's a 22:47 22:47 question that worries me quite a lot um 22:50 22:50 because 22:52 22:52 if manufacturing exports are this sort 22:54 22:54 of really important step in converging 22:58 22:58 um with with the first world it's much 23:00 23:00 harder when you have an aging population 23:03 23:03 because people are less dexterous their 23:05 23:05 ability to learn is harder 23:08 23:08 so so i haven't like looked at the at 23:10 23:10 the research on this but it is something 23:12 23:12 that i do worry 23:14 23:14 about and i don't have a good answer 23:16 23:16 but i think it's certainly a very 23:19 23:19 important question and one people should 23:21 23:21 be thinking about quite seriously 23:24 23:24 uh 23:25 23:25 yeah it it it's it's it's definitely 23:28 23:28 a a cause for worry 23:31 23:31 and and in that 23:33 23:33 context i'd like to add two things it 23:35 23:35 coming back to our conversation on labor 23:37 23:37 it makes releasing that labor into the 23:40 23:40 labor market the label is currently in 23:42 23:42 the state sector all the more important 23:44 23:44 and it also makes releasing another 23:48 23:48 sector that sort of um 23:51 23:51 captive which is the the females of this 23:54 23:54 country female labor force participation 23:56 23:56 is very very low um relative to our 23:58 23:58 peers in the region and certainly 23:60 23:60 relative to southeast asia and other 24:01 24:01 converging economies so that's something 24:04 24:04 that i think 24:05 24:05 the state has a very significant role to 24:07 24:07 play um and we can talk about how the 24:09 24:09 state might might do that but also 24:11 24:11 society in general um 24:14 24:14 so i think we we need to think about how 24:17 24:17 how we can 24:19 24:19 get female labor force uh 24:22 24:22 sorry improve female labor force 24:24 24:24 participation uh i'd like to make one 24:26 24:26 point on that um if i may digress 24:28 24:28 slightly which is 24:31 24:31 a lot of effort in terms of female labor 24:33 24:33 force participation is put on to 24:35 24:35 improving for example uh changing the 24:39 24:39 labor laws making it easier for people 24:41 24:41 to travel to work these are all very 24:43 24:43 very important undoubtedly but if you 24:45 24:45 look at what really i think plays an 24:47 24:47 even more important role in driving 24:49 24:49 female labor force participation it is 24:51 24:51 the existence of industries that tend to 24:54 24:54 hire women um one of the reasons why sri 24:57 24:57 lanka's female levels participation rate 24:59 24:59 isn't even worse than it is is because 25:01 25:01 of the large amount of uh the apparel 25:03 25:03 sector that we've developed primarily 25:04 25:04 through fdi so i think having that sort 25:06 25:06 of light manufacturing um and moving up 25:09 25:09 the value chain like in southeast asia 25:12 25:12 where people started off and japan um 25:15 25:15 where where industry started off in 25:16 25:16 apparel but then very quickly moved up 25:18 25:18 the manufacturing value chain that's 25:20 25:20 going to be 25:21 25:21 very very important 25:23 25:23 for that as well it's a clinic i guess 25:26 25:26 yeah absolutely the female labor force 25:29 25:29 participation i think that's one area 25:31 25:31 that remains untapped and that's we're 25:33 25:33 talking about a potential work for 25:35 25:35 workforce of about five million on 25:37 25:37 people 25:38 25:38 um 25:39 25:39 and on the aging population something i 25:41 25:41 learned recently was that actually post 25:43 25:43 2000 there was a sort of a 25:46 25:46 an increase in the number of children 25:49 25:49 born so actually there's 25:51 25:51 whereas we earlier thought that 25:53 25:53 you know all the 25:55 25:55 about by 2030 it will be mainly sort of 25:58 25:58 older people or over 40s there's 26:01 26:01 actually a small cohort of younger 26:03 26:03 people who are sort of entering the 26:04 26:04 workforce so it's a matter of whether we 26:07 26:07 have the right uh sort of environment 26:09 26:09 and the right sort of policies to 26:11 26:11 actually 26:12 26:12 engage them into the workforce 26:25 26:25 let's go to another question 26:28 26:28 um 26:30 26:30 how long could a debt restructuring 26:32 26:32 process take given the sri lankan 26:35 26:35 complexities could we restructure only a 26:38 26:38 part of this example only the isbs for 26:41 26:41 example 26:43 26:43 um 26:45 26:45 i don't know the answer to that question 26:47 26:47 um 26:48 26:48 what 26:49 26:49 i do know is that you have a vast range 26:53 26:53 um of how long it takes like some i 26:56 26:56 think have happened with 26:58 26:58 within a year or two um some have taken 27:01 27:01 years and then in some cases like i 27:04 27:04 think 27:04 27:04 the this is of course an exception but 27:06 27:06 it's a fun fact the 27:08 27:08 the ussr so the russian after the 27:12 27:12 october revolution in 1917 the ussr 27:14 27:14 didn't take on imperial russia's debts 27:16 27:16 and i think they were only settled 27:17 27:17 somewhere in the 90s so that was 80 80 27:20 27:20 years later or something 27:25 27:25 okay 27:26 27:26 um 27:30 27:30 that we already covered that question 27:36 27:36 sri lanka already faces 27:38 27:38 labor shortages our active migrant 27:41 27:41 worker policy also means that many of 27:43 27:43 our most productive workers are working 27:46 27:46 abroad should we adopt a more open 27:48 27:48 immigration policy to attract younger 27:51 27:51 workers to migrate to sri lanka for work 27:54 27:54 yeah so i think on immigration 27:58 27:58 the question is 27:59 27:59 i don't think we can take a homogeneous 28:01 28:01 policy and now this is 28:03 28:03 me not thinking sort of in terms of the 28:04 28:04 welfare of the world but the wealth of 28:06 28:06 sri lanka um i think there we need to 28:09 28:09 make a distinction skilled in unskilled 28:10 28:10 labor um i i don't think we should be 28:14 28:14 importing unskilled labor 28:17 28:17 we should be allowing the the price of 28:20 28:20 labor to rise and therefore of unskilled 28:23 28:23 labor to rise and therefore for our 28:25 28:25 citizens to enjoy better standards of 28:28 28:28 living now on the export competitiveness 28:30 28:30 side you might argue that um having 28:34 28:34 higher labor costs into disincentivizing 28:36 28:36 invent investors 28:38 28:38 and 28:39 28:39 disincentivize domestic investors from 28:41 28:41 moving into the export sector 28:44 28:44 yes but i think there's many other 28:45 28:45 things we can do to reduce the 28:47 28:47 the cost of production for exporters 28:49 28:49 which don't involve suppressing wages 28:51 28:51 domestically 28:53 28:53 on skilled labor yes i definitely should 28:55 28:55 open it up we need more skills in this 28:57 28:57 country we need more skilled people in 28:58 28:58 this country the ig sector and a number 29:01 29:01 of other sectors are really suffering 29:03 29:03 from the inability to scale and one of 29:06 29:06 the important reasons why they're unable 29:08 29:08 to scale is because of the lack of 29:10 29:10 talent 29:11 29:11 and and yes opening up to to to talent 29:14 29:14 and like 29:15 29:15 simply bringing in competition if we 29:17 29:17 take in lanka hospitals lanka hospitals 29:20 29:20 brought in uh a number of indian 29:22 29:22 surgeons that has provided competitive 29:24 29:24 pressure in the medical market today and 29:27 29:27 you look at many of our of our leading 29:29 29:29 hospitals their standards and the 29:31 29:31 standards of the procedures have been 29:33 29:33 improved by virtue of having indian 29:35 29:35 doctors working here um and and that's 29:38 29:38 one of the more unfortunate things that 29:40 29:40 that uh experiment was terminated 29:43 29:43 um and and if you look at the legal 29:45 29:45 sector the delays the quality of service 29:48 29:48 it's really appalling anybody of you 29:50 29:50 anyone here who's gone to a lawyer um or 29:53 29:53 if you're a lawyer who's been to court 29:55 29:55 um will be aware of this and yeah just 29:57 29:57 opening opening things up i think will 29:60 29:60 will really serve sri lanka well 30:04 30:04 yes sir and i think it's a love sort of 30:06 30:06 a technology transfer which we are 30:08 30:08 desperately in need of in several of our 30:11 30:11 sectors 30:22 30:22 all right 30:23 30:23 so again i just like to remind the 30:25 30:25 audience to please send in your 30:26 30:26 questions 30:28 30:28 to the 30:29 30:29 question box or the comment section 30:38 30:38 there's a question on the plantation 30:39 30:39 community 30:41 30:41 the plantation community is not 30:43 30:43 maintaining their income below poverty 30:46 30:46 line however they are at expenditure 30:48 30:48 poverty how could we improve 30:51 30:51 their situation 30:54 30:54 so i think as i mentioned earlier on 30:57 30:57 this 30:58 30:58 chit chat 30:60 30:60 i think what's critical is is not so 31:02 31:02 much income support but providing a 31:05 31:05 wealth transfer combined with uh 31:08 31:08 the essentially the the land which will 31:11 31:11 act as a wealth transfer plus provide 31:13 31:13 them 31:14 31:14 an opportunity to 31:16 31:16 grow their own crops and therefore uh 31:19 31:19 take take control of their own destiny 31:21 31:21 at the moment most of the plantation 31:24 31:24 sector is linked to a precarious 31:26 31:26 industry that is effectively dying at 31:28 31:28 the moment um and is linked to the 31:32 31:32 infrastructure provided that they 31:34 31:34 in essence of sort of a sort of form of 31:37 31:37 captive labor that that's that exists 31:40 31:40 there so providing uh land is agency 31:44 31:44 providing land is a source of wealth 31:47 31:47 transfer and it's a source of economic 31:50 31:50 uh empowerment for them and for the 31:52 31:52 country 31:56 31:56 yes 31:57 31:57 if you have a couple of more questions 32:03 32:03 all right this is an interesting one 32:05 32:05 what else does the government have in 32:07 32:07 its arsenal to 32:08 32:08 keep kicking the debts restructure can 32:11 32:11 down the road 32:21 32:21 sorry the question is what else does the 32:22 32:22 government have in it yes what else is 32:25 32:25 in the government's arsenal to keep 32:27 32:27 kicking the can down the road in terms 32:29 32:29 of debt restructuring 32:31 32:31 ah that's it 32:34 32:34 well i i suppose there's the port city 32:37 32:37 you can 32:38 32:38 try and and sell some assets a little 32:40 32:40 bit and 32:41 32:41 keep kicking that can 32:44 32:44 there's the geopolitical card 32:46 32:46 you could exchange 32:49 32:49 some some level of sovereignty for or 32:53 32:53 in terms of one's alliances in return 32:55 32:55 for some cash 32:56 32:56 um 32:59 32:59 with with uh this state of uh sort of 33:02 33:02 depressed demand maybe you could 33:04 33:04 continue to 33:07 33:07 well uh yeah that's not gonna give you 33:09 33:09 dollars so 33:11 33:11 i'm 33:14 33:14 it's pretty tough one it's basically i 33:16 33:16 think i guess 33:17 33:17 i guess we are running out of options 33:20 33:20 is that yeah and i i think you might be 33:22 33:22 able to 33:24 33:24 because even let's take imports right 33:27 33:27 around 80 of imports are intermediate 33:30 33:30 goods so 33:31 33:31 um there's a limit to which you can 33:35 33:35 sort of suppress consumption i guess 33:43 33:43 that there is a limit to that you might 33:45 33:45 be able to suppress it a little bit more 33:48 33:48 but um yeah we're reaching reaching the 33:50 33:50 end 33:55 33:55 very grim 33:57 33:57 uh there's one question on what 33:60 34:00 sorry 34:01 34:01 what is the cause of the ongoing food 34:03 34:03 shortages and price increases i guess 34:06 34:06 that's something that's on everyone's 34:08 34:08 mind 34:10 34:10 so i think there's 34:12 34:12 different causes there's in a single 34:14 34:14 cause and that depends on different 34:16 34:16 types of food 34:18 34:18 let's take something like 34:22 34:22 a a product that's subject to control 34:25 34:25 prices right and milk powder or 34:27 34:27 something 34:28 34:28 that is affected by the fact that 34:31 34:31 there are goods where producers are 34:33 34:33 making a loss on supplying that good 34:36 34:36 and therefore they have very little 34:38 34:38 incentive to 34:40 34:40 to supply that and 34:42 34:42 if you expect prices to increase later 34:46 34:46 you might port so this whole price 34:48 34:48 control is one thing that's affecting 34:50 34:50 supply 34:51 34:51 second is 34:54 34:54 the whole system of licensing of imports 34:57 34:57 the letters of credit 34:59 34:59 because there's a shortage of foreign 35:01 35:01 currency because we haven't appreciated 35:03 35:03 the rupee and allowed it to float you 35:05 35:05 have this uh perverse 35:07 35:07 system in place um which makes it 35:09 35:09 difficult to import stuff so that's 35:11 35:11 another cause 35:12 35:12 then um i think what's also probably 35:15 35:15 starting to happen is with all this 35:17 35:17 fertilizer business 35:19 35:19 the many farmers have changed their 35:22 35:22 uh their behavior their their planting 35:25 35:25 less um 35:27 35:27 and and remember that this is not only 35:29 35:29 fertilized this also applies to we 35:31 35:31 decides and pesticides um and and that's 35:34 35:34 a huge hit to agricultural productivity 35:37 35:37 as well 35:38 35:38 um 35:38 35:38 so so you have all of this going on um 35:42 35:42 at the same time and that's probably um 35:45 35:45 what's what's contributing to a 35:46 35:46 significant part of the 35:49 35:49 the food prices 35:50 35:50 and of course this can all be very 35:51 35:51 easily solved you know you just 35:55 35:55 remove all the tariffs and you'll have 35:56 35:56 the world price chickens cheaper in 35:58 35:58 singapore most groceries are cheaper in 36:00 36:00 singapore um 36:02 36:02 it's it's no it's not a difficult 36:04 36:04 problem to solve in that sense 36:07 36:07 i guess that doesn't mean seven percent 36:08 36:08 of gdp so fine you kick two percent of 36:10 36:10 gdp out or something but um in terms of 36:14 36:14 welfare people will be much better off 36:16 36:16 and in the longer term um 36:18 36:18 that that also translates to like 36:21 36:21 lower labor costs and so on and so forth 36:22 36:22 but let's not go into the details of 36:24 36:24 that 36:26 36:26 so this i guess this goes back to sort 36:28 36:28 of the state's interventionists i mean 36:30 36:30 they're intervening too much in the 36:32 36:32 market right the the exchange 36:35 36:35 the exchange rate the uh you know food 36:38 36:38 supply it's so i guess it goes back to 36:42 36:42 this is where we need the reform and we 36:43 36:43 need it urgently 36:46 36:46 we need reform and we need 36:49 36:49 need it urgently 36:50 36:50 yes yes very urgently 36:55 36:55 uh there's one more there's another 36:57 36:57 question would uh modern monetary theory 37:02 37:02 offer an alternative to an economic 37:05 37:05 reform 37:07 37:07 program so 37:09 37:09 modern monetary theory by and large is 37:11 37:11 predicated on issuing debt in your own 37:15 37:15 currency 37:17 37:17 so the u.s is able to 37:19 37:19 consider the prospect or the possibility 37:22 37:22 of shaping its policy based on modern 37:25 37:25 monetary theory sri lanka since 37:29 37:29 independence 37:30 37:30 roughly half of its debt has been in 37:32 37:32 foreign currency since 2007 half of that 37:34 37:34 foreign currency that has been 37:36 37:36 commercial debt as opposed to 37:37 37:37 concessionary which was the case prior 37:39 37:39 to 2007. 37:41 37:41 so 37:42 37:42 the question doesn't really arise in sri 37:43 37:43 lanka's case because half of our debt is 37:45 37:45 in foreign currency and therefore um if 37:47 37:47 you start printing lots and lots of 37:48 37:48 money like we are today you're going to 37:50 37:50 have a currency crash and that's going 37:51 37:51 to increase 37:52 37:52 the size of your debt relative to 37:54 37:54 government revenue because government 37:55 37:55 revenue is in rupees while debt 37:57 37:57 repayments are in dollars so yeah it 37:59 37:59 just doesn't arise 38:01 38:01 yes actually sri lanka's problem is not 38:03 38:03 a rupee problem it's a foreign currency 38:05 38:05 problem right so the modern monetary 38:07 38:07 theory is not something that's likely to 38:09 38:09 work in sri lanka 38:11 38:11 well i would actually argue that's not 38:12 38:12 even a foreign currency problem we have 38:14 38:14 a debt problem and it's because of the 38:16 38:16 debt problem that the way the 38:18 38:18 government's trying to handle it is by 38:21 38:21 uh pegging the currency or the managed 38:23 38:23 float or whatever it's called um but 38:27 38:27 we we wouldn't really have a foreign 38:28 38:28 currency probably have significant 38:30 38:30 currency depreciation but we wouldn't 38:32 38:32 have this sort of shortage of dollars if 38:35 38:35 you allow the market to operate and for 38:37 38:37 the price of currency to clear 38:43 38:43 right there's a very interesting 38:44 38:44 question on incentives how do we 38:47 38:47 incentivize politicians to implement 38:49 38:49 these reforms 38:51 38:51 as there seems to be some resistance due 38:53 38:53 to their fears that they may lose a 38:55 38:55 political support 38:59 38:59 this is a very difficult question 39:00 39:00 because like most countries 39:03 39:03 you go through an experience and you 39:05 39:05 learn from it sri lanka went through 39:07 39:07 that experience in the 70s learned from 39:10 39:10 it 39:12 39:12 and then throughout the 80s and 90s and 39:14 39:14 early 2000s kind of continued from using 39:16 39:16 those lessons um 39:19 39:19 but sriracha is quite unusual in the 39:21 39:21 sense that it has also unlearned these 39:23 39:23 lessons 39:24 39:24 and and why that's the case 39:27 39:27 um i don't really have a good answer for 39:31 39:31 um 39:32 39:32 i can't think of any other country which 39:35 39:35 has unlearned the the 39:37 39:37 the lessons that sri lanka 39:39 39:39 sort of picked up so with so much 39:42 39:42 difficulty um like if you think of india 39:45 39:45 you think of pakistan you think of 39:46 39:46 bangladesh in particular actually um 39:49 39:49 that also had somewhat similar 39:50 39:50 experiences they all did not go through 39:53 39:53 this unlearning process that sri lanka 39:55 39:55 has gone through and um 39:58 39:58 i don't know why in terms of 39:59 39:59 incentivizing um the 40:04 40:04 the 40:04 40:04 the state i think it's because it's a 40:06 40:06 mixture here i i think uh it's it's it's 40:09 40:09 primarily politics but also the 40:12 40:12 bureaucracy's ideas um and and and the 40:16 40:16 private sector actually um ev everyone 40:20 40:20 seems to be naturally 40:22 40:22 attracted to find sort of the the 40:25 40:25 policies of the 70s naturally attractive 40:27 40:27 and i don't know why this is the case um 40:30 40:30 the this this instinctive 40:32 40:32 uh 40:33 40:33 the the the magnetism uh 40:36 40:36 of them and i i don't have a good answer 40:41 40:41 there's one uh worrying question can we 40:44 40:44 expect a tax reform very soon 40:50 40:50 yes i i i should think that we would ex 40:53 40:53 because if we are going to default um 40:55 40:55 it's very likely that the creditors will 40:57 40:57 insist on imf involvement 40:60 40:60 at the very least we'll insist on 41:01 41:01 policies 41:03 41:03 that would 41:04 41:04 involve increasing government revenue um 41:07 41:07 and yes i would expect in the near term 41:10 41:10 to be 41:11 41:11 there to be fairly significant uh 41:13 41:13 increases in government revenue which 41:15 41:15 mean taxes 41:19 41:19 unfortunately yes 41:24 41:24 so i guess we'll take one last question 41:26 41:26 before wrapping up this session 41:41 41:41 how important are certain progressive 41:44 41:44 political reforms as precursors for 41:47 41:47 economic reforms to attract investments 41:50 41:50 into the country 41:55 41:55 so this is a tough question because 41:58 41:58 because you 41:59 41:59 have examples that make the case for 42:02 42:02 both sides 42:04 42:04 if you look at china for example 42:06 42:06 in the 80s you see very little political 42:09 42:09 reform 42:11 42:11 the the vast majority of 42:14 42:14 sort of industrial export growth that 42:16 42:16 took place in china was by 42:18 42:18 state-owned enterprises owned by local 42:21 42:21 governments because there was uh 42:23 42:23 insecure property rights because there 42:25 42:25 was no rule of law um 42:28 42:28 people and the communist party the 42:30 42:30 history of expropriating property um 42:32 42:32 private businesses did not flourish very 42:34 42:34 much in the 80s um so the the the 42:38 42:38 chinese society state 42:40 42:40 party evolved this institution of the 42:42 42:42 local government running enterprises 42:43 42:43 which had some of the virtues of private 42:45 42:45 enterprise combined with um 42:49 42:49 with 42:50 42:50 the 42:51 42:51 the protection of you know being a 42:53 42:53 government thing 42:55 42:55 and similarly you you see that with 42:58 42:58 the taxation system there was a lot of 42:60 42:60 fear of expropriation so they designed 43:02 43:02 this thing called anonymous bank 43:03 43:03 accounts um which meant that the state 43:06 43:06 withdrew its ability to to tax you 43:09 43:09 because it didn't know how much money 43:10 43:10 you had 43:12 43:12 and and you look at 43:14 43:14 korea south korea as well 43:17 43:17 you see a state which was a police state 43:20 43:20 which 43:22 43:22 was 43:24 43:24 was 43:27 43:27 subject to caprice um where where you 43:31 43:31 know that the standard governance stuff 43:33 43:33 didn't happen on the other hand 43:35 43:35 the 43:36 43:36 men all these countries have improved 43:38 43:38 their governance over time as they 43:39 43:39 become more prosperous the 43:41 43:41 requirement for those institutions to 43:43 43:43 preserve and to continue prosperity 43:46 43:46 became much more acute and there are 43:48 43:48 other countries like singapore where 43:49 43:49 having solid governance the rule of law 43:52 43:52 was absolutely vital um to their growth 43:55 43:55 journey to attracting foreign investment 43:57 43:57 and so on and so forth 43:59 43:59 um so i i think and then let's not talk 44:02 44:02 about you know the u.s germany which in 44:04 44:04 the late 19th century also went through 44:06 44:06 a similar process of transformation 44:09 44:09 which which where political institutions 44:11 44:11 played a very important role in um 44:14 44:14 in improving and sustaining growth 44:16 44:16 so in sri lanka's case 44:19 44:19 i think the answer is yeah there are 44:21 44:21 some some very key key reforms that need 44:24 44:24 to take place um 44:27 44:27 to increase confidence of investors but 44:30 44:30 i would say 44:31 44:31 um 44:33 44:33 and and to like prevent us from doing 44:35 44:35 really stupid things like what we've 44:36 44:36 done with debt 44:38 44:38 that that that i think 44:41 44:41 has has a role in terms of political 44:44 44:44 reforms 44:45 44:45 but uh 44:47 44:47 i think a lot of this stuff can actually 44:48 44:48 be done 44:50 44:50 with 44:50 44:50 without changing institutions without 44:53 44:53 changing 44:54 44:54 um 44:55 44:55 structures whether it's sustainable or 44:57 44:57 not is another question but 44:59 44:59 um i i i think it's a mix yeah 45:04 45:04 i guess it's uh 45:06 45:06 that's fine i guess it's a 45:08 45:08 political stability and effective 45:11 45:11 management is something that's going to 45:12 45:12 be key for us to attract uh foreign 45:15 45:15 investments into the country and i 45:18 45:18 one quick point on it which is violence 45:21 45:21 is very costly 45:22 45:22 um 45:23 45:23 and and if you look at sri lanka's 45:25 45:25 history we've had consistent 45:27 45:27 sort of violence we've had riots through 45:29 45:29 the 50s and 60s um then you have 45:33 45:33 the the the first jvp insurrection you 45:37 45:37 have 83 45:38 45:38 then you have the second jvp instruction 45:41 45:41 and in between the the war starts you 45:42 45:42 have the war 45:44 45:44 um then in the the soon after the war 45:48 45:48 you you begin to see all this 45:49 45:49 anti-muslim violence um and this is 45:52 45:52 something that is very serious and that 45:54 45:54 is fundamentally a political issue that 45:55 45:55 has direct economic ramifications 45:58 45:58 um so that's something where i i i think 46:01 46:01 um people need to think very seriously 46:03 46:03 about how to resolve those uh issues and 46:06 46:06 to be aware that 46:09 46:09 these the the politics and economics are 46:11 46:11 closely linked uh in this respect 46:14 46:14 including on 46:16 46:16 in in quite intentional ways like gsp 46:18 46:18 plus 46:20 46:20 whereas sri lanka seems hell bent on 46:23 46:23 losing it for the second time and and 46:25 46:25 gsp plus is not only important for the 46:27 46:27 apparel sector the parasite is a mature 46:29 46:29 sector it's going to be competitive yes 46:30 46:30 we're going to have less exports 46:32 46:32 apparel exports than we would otherwise 46:35 46:35 but the real value of gsp plus is to 46:37 46:37 help us develop new export industries 46:40 46:40 sri lanka 46:41 46:41 at independence had tea rubber 46:44 46:44 and coconut we've added 46:47 46:47 apparel and solid tyres 46:49 46:49 basically in in in the late 70s and very 46:52 46:52 early 80s since then we haven't added a 46:54 46:54 major manufactured export so in the last 46:57 46:57 40 years we haven't done that and gsp 46:60 46:60 plus is one of the few avenues we have 47:02 47:02 that could give us a bit of a leg up 47:04 47:04 by virtue of that concessional access to 47:07 47:07 what is the world's largest market 47:09 47:09 depending on what measure you use but 47:11 47:11 yeah 47:13 47:13 thank you daniel i think that was the 47:14 47:14 perfect sort of end to our conversation 47:17 47:17 today 47:18 47:18 we do have a lot of lot a lot of other 47:21 47:21 questions as well but unfortunately 47:24 47:24 come to the end of our first admiral 47:26 47:26 checks um 47:27 47:27 [Music] 47:29 47:29 thank you very much for joining thank 47:31 47:31 you daniel for joining and engaging in 47:33 47:33 this conversation and thank you very 47:35 47:35 much to the audience who shared 47:37 47:37 questions and engaged with us and we 47:40 47:40 encourage you to you know join us in the 47:42 47:42 future as well 47:47 47:47 please 47:48 47:48 follow advercata social media pages we 47:51 47:51 are on instagram facebook and twitter 47:53 47:53 for future uh 47:55 47:55 events uh 47:57 47:57 thank you very much i'm rihanna talfik 47:59 47:59 and have a good evening 48:01 48:01 thanks rihanna thanks everyone who asked 48:03 48:03 questions and everyone who listened in 48:05 48:05 cheers thank you daniel