The numbers tell it all. Around 23.4 % of the country’s population is made up of young people, specifically those between the ages of 15 and 29 years.
Generally, a target of private companies and advertising, they are conspicuous by their absence in the political sphere; they are, in other words, under represented at local government and national government level. Whether it is because of their disenchantment with the political process, we do not know. What we do know is that this segment is both passionate about social causes and dispirited by a lack of means of advocating and achieving those causes.
Insaaf Mohideen, at present the Chief Investment Officer for one of the largest international sovereign funds in the world and adviser, in his own words, to 12 of the world’s most powerful and influential billionaires, thinks this is regrettable. He gives two broad reasons: one, that most investments heading into Sri Lanka are diverted to large scale infrastructure projects that enrich government officials over ordinary citizens, especially the youth; and two, that consumption patterns in Sri Lanka have largely alienated the youth from their surroundings. According to him we have everything: a country, rich in resources, a mature democracy that has developed over the last 30 years, and a stable economy which does not face the vagaries of frequent elections and by-elections that other countries in South Asia face.
The problem is that the youth, even with these advantages, have failed to keep up with their counterparts from the rest of the region, indeed the world. “They don’t dream big because they feel let down,” Insaaf tells us, sitting down for an interview with OSL Magazine, adding, “While this is not an excuse, I can understand why they’re unwilling to think outside the box.”
For Insaaf this problem is felt most acutely when it comes to the field he’s been working in for more than 25 years: finance, or more specifically start-up finance. According to him, Sri Lanka, because of the economy’s heavy tilt towards Foreign Direct Investments and infrastructure projects, still hasn’t reached the ranks of India, where grassroots level start-ups are more the norm than the exception and where investments are centred on young businessmen.
“Think of it this way. Most start-ups which appeal to the millennial and Generation Z youth population happen to be multinational. I’m talking about the Uber generation here. Whenever there’s a localised investment of that sort, it’s almost always a copy of a multinational start-up. I’m not saying this can’t bring benefits to the economy, but then with what you guys have in this country, you can achieve so much more. Several years ago we were able to release capital to such ventures as Virtusa, which is a grand success story today. But we have not been able to tap into such a potential thereafter. Why? Here. I must say, the main reason has to be that the youth feel disconnected from their county. You can’t blame them, since no one’s listening to them. That is why we’re trying to bring them back into the game.”
For Insaaf, who visited Sri Lanka at the request of certain concerned politicians around 18 months ago, this means holding a massive, unprecedented youth forum which will “collect their views and list out their grievances, publish a youth gazette, and get politicians to read them on the understanding that whoever contests elections must incorporate it in his or her programme and manifesto.” The forum, which will tentatively be held in November and December, will precede those elections (if they are called). However, this is not, and will not be, the only solution.
“People say corruption is a huge problem. I personally think it is, especially when it comes to bringing in investments to countries like Sri Lanka. But Sri Lanka isn’t the only country where corruption is rampant. In fact, I would say that compared to around 10 years ago, our corruption levels have reduced. If every dollar coming in yielded about 8 cents of investments before, now the figure may well have risen to 50 cents. What of the other 50 cents? That’s something we have to think about, but that in itself is an implicit acknowledgment of how we’ve improved.”
Far from considering corruption as a low priority, though, Insaaf thinks instead that focusing on it tends to hide other, less apparent yet more vital issues concerning the economy. We have a poor record when it comes to research and development, for instance: only around 0.16 % of GDP is diverted to R&D for instance, a paltry figure which represents a fifth of the amount India puts into it. Moreover, more than 75 % of R&D expenditure comes from the State, with less 20 % from local private businesses. Since innovation and growth do not come from a vacuum, getting private start-ups to cough in more for R&D is necessary. “Tech start-ups have a big potential. I am not saying we should focus only on that, but today’s rupee investment can turn out to be tomorrow’s multibillion dollar business in the field of technology.”
For that to happen, however, we need to think differently and radically about certain economic imperatives. “I’ve always thought that placing too much emphasis on FDIs was misconceived. This is not to say that FDIs don’t bring in investments to the country. They do. But more often than not they benefit the upper echelons of the business world. In Sri Lanka I still come across people who barely get by, who sometimes have to forego on their meal for the day. At the same time, I see high-rise buildings and luxury condominiums and all that. We have both these worlds, never to meet each other, because investments from abroad are catered to the rich. They create a super-rich class which spend very little, consume imports, and have a minimal impact, if at all, on GDP. What we need is innovation targeting youth start-up projects.”
The first problem to wade through here would be that of government apathy. But surprisingly, Insaaf doesn’t see that as a big issue. “Politically we are better off than most countries in the region, like I’ve said before. Over the last 50 years, governments have been elected out of power and transitions to opposition party rule have been largely peaceful. Whatever party is in power, it recognises that a minimum level of guarantees is needed for effective investments. Once you have those guarantees, checks, and balances, the primary responsibility for those investments has to be borne by the business. Believe me, we have so many opportunities we can tap into. If around 100 start-ups can be established today, in another three or four years six of them, and I’m giving only a rough count, can get to a level where they can partner up with a major organisation like Google. We don’t have to bemoan government apathy because at the end of the day we have what it takes to transform into something better.”
If Insaaf sounds like a motivational guru there, he may well be. Several times in our interview he interjects phrases almost straight off Dale Carnegie. But these are not empty words. “Young people need to be spoken to in their language. They will not respond, especially not the youth of Sri Lanka who to me are not willing to come into the open, until they get what they want. That is why even with that forum we’re planning, we’re set to incorporate fun items like concerts. The truth is that they can’t be made to be serious about something. If you want them to be passionate about, say, venture capital start-ups and technology and R&D, you need to give them a platform through which they can express their ideas and give suggestions. We are planning on an Ideathon soon, for that purpose. We’re doing all that because we want them to be heard.”
This is a big challenge though. If the youth of Sri Lanka feel socially displaced, it’s because they feel that they are politically unrepresented. It’s hard to put down that argument because it is true. To give just one example, in 1990 an amendment to the Local Authorities Elections Act set apart 40 percent in nomination lists to candidates between 18 and 35 years of age. The Amendment was necessitated by the second JVP insurrection in which youths took part in a bloody campaign to bring down the State. Owing to lack of interest among officials, however, that was forgotten.
What’s ironic is that another proposal, to set apart 25% in the list to females, was adhered to; the problem there was that female representation and youth representation were seen as an either/or contingency when, as Insaaf puts it, “they should have complemented each other.”
On the other hand, “we’re seeing young people make waves in their political systems, even in the USA, where Alexandria Ocasio-Cortez and Ilhan Omar are challenging older congressmen. It won’t take a long time for us to see a similar trend here. It’s already happening: young people are taking to big causes and are cutting across party lines. It’s a whole new ideology at work, and I for one invite it, particularly since it will have a positive impact on investments.”