Global  Recession Imminent

Global Recession Imminent

Economist Dr Howard Nicholas foresees

Record-breaking audiences listened to Dr Howard Nicholas’ seminar on “The Current State and Future Directions of the Global and Sri Lankan Economies” at the Lakshman Kadirgamar Institute in Colombo on 11 July, as well as to a subsequent lecture at the University of Colombo. His two-part presentation dealt firstly with the trends in the global economy Dr Nicholas has had a long and distinguished teaching career, teaching business economics and financial markets in academic institutions in various countries – including most recently China and Vietnam. He is invited regularly to give lectures on the global economy. At a time when the world economy appeared to be riding high, Dr Howard Nicholas forecast a recession. Soon afterwards, the Global Financial Crisis (GFC) of 2007 occurred, as he had predicted. He is also known for his early warnings of the Asian Crisis of 1996-8, the global recession of 2001-3 and a little-known crisis in the Chinese economy in 2015. Now, once again, he envisages a global recession, driven by a world-wide debt crisis.

Power shift

Dr Nicholas points out that there has been a massive shift in global economic power, “as the place of the West is being taken over by the Rest.” Underlying this is a massive shift in global wealth over the past three decades. The advanced economies’ share of global gross domestic product (GDP), as measured by purchasing power parity (PPP) has declined from over 60% in the early 1990s to 40% today, while that of the developing countries (including emerging markets) has increased, reversing the previous relative position.

There has also been a regional shift in the distribution of GDP between the developing countries, with the shares of Africa and South Asia stagnating around the 10% mark, while that of Latin America has declined from 35% to converge on the South Asian level. Conversely, East Asia’s share has almost doubled from the below that of Latin America to almost 60%. Within East Asia itself, there has been a shift, with China’s share rising from 10% in 1992 to nearly 60% in 2017. Hence, it is clear that China has been driving the shift in global wealth.

It has also become the world’s largest manufacturer, pushing the USA, the Eurozone and Japan into second, third and fourth place. Manufacturing, Dr Nicholas explains, underlies “living standards, which are about the material basis of our existence – the material products (and services) we purchase to improve our well-being, and most material products are manufactures. Services, such as catering, tourism and the like are founded on the production of manufactures, while others such as finance support the reproduction of the material base of the economy.”

Countries that dominate the world economy are those that manufacture, and manufacturing has been driving global growth. By building on manufacturing, China has become the world’s largest retail market, displacing the USA. Thus, world economic power has shifted to East Asia, led by China.

Long Cycles

Dr Nicholas also referred to “long cycles”, a concept explored first by the Dutch economists Jacob van Gelderen and Salomon de Wolff, and expanded upon by Soviet Economist Nikolai Kondratiev, after whom the Austrian economist Joseph Schumpeter named them “Kondratiev Waves”. A typical business cycle, he explains, consists of a business cycle peak and a business cycle trough, on either side of the equilibrium level with expansion above and recession below. He itemises two types of cycle which he finds relevant: the Juglar cycle, which last 7-11 years and are driven by fixed capital investments; and the Kondratiev wave, which last 50-60 years and are driven by major innovations.

Dr Nicholas asserts that combining the shorter Juglar Cycle with Kondratiev cycle provides us with a long cycle of about three Juglar cycles. describes four such long cycles so far, starting with the Industrial Revolution, based on different technologies as prime movers.: First, 58 years from 1790, peaking in 1814, with a trough in 1848; Britain being the hegemonic power; and the primary technology being canals.

Second, 45 years from 1848, peak 1872, trough 1893; hegemonic power Britain; technology: railways, steam. Third, 47 years from 1893, peak 1917, trough 1940; hegemonic power: Britain; technology: steel, combustion engine, electricity, chemicals, telephone. Fourth, 80 years from 1940, peak 1975, trough 2019/20; hegemonic power USA; technology: electronics, plastics, aerospace, nuclear energy

This model can predict the direction in which the economy will move: the next long cycle should be less than 50 years starting in 2020, peaking about 2040 and with a trough about 2065, with either China, or an East Asia led by China as the hegemonic power. The technologies of this “Fifth Technological Revolution” he forecasts as the internet, biotechnology, and robotics. However, before the technological revolution marking the start of a new cycle, the previous long cycle ends in a trough, signifying a depression or recession. The US economy, Nicholas points out, has been in a de facto recession for the past decade.

“The problem is,” he says, “that at the bottom of all long cycles when you have a major technological change, you have a lot of unemployment. The skills we used to have which gave us jobs in the previous generation are no longer valid.” The true unemployment rates are being hidden by statistical manipulation. For example, the US government gives a figure of about 4% for the unemployment rate. However, the official statistics do not count the unemployed who, being discouraged at not finding jobs, stop looking actively for employment. Taking these numbers into account, the actual unemployment figure is closer to 21%.

Elephant in the room

The elephant in the room, Dr Nicholas states, is a great monetary and fiscal experiment in deficit spending, especially by China and the USA, which is propping up the global economy, but which has been making it increasingly unstable.
Central banks have been “printing money”: the assets of the “Big Four” (The US Federal Reserve, the European Central Bank, The People’s Bank of China, and the Bank of Japan) have risen from less than USD 5 trillion to USD 20 trillion, representing growth from less than 15% of GDP to over 40%.

The Central Banks do not control the quantity of cash in the system, but only the rate. Putting money into the system cause interest rates to fall. With global GDP growth at 2% over 9 years, printing money grew at 300%. So global debt is at historic highs, but interest rates are at historic lows because of printing money. The quality of debt has fallen, as has corporate yield. For the first time in history, people are paying governments and banks to hold their money. Economic growth is predicated on fixed capital growth, not working capital, overdrafts or loans. What is happening at present is that borrowing is taking place for speculation, when there should be lending to businesses for productive investment. A huge “asset bubble” has been created, making the rich richer, but hurting the poor and creating global financial instability. Pension funds are being, most dangerously, invested in speculation on the stock market. All the world’s wealth funds (including oil-rich Norway and the Middle East countries) are investing in only a few US firms, such as Google, Apple, Microsoft, and Amazon.As a corollary. Governments and central banks are increasingly controlled by finance sectors. All the US presidents who are elected are those receiving the highest amount of funds for campaigns. Hence, there is no incentive to reduce the bubble by increasing fixed capital investment.

Therefore, in the next couple of years, he predicts a massive recession, massive budget deficits, more quantitative easing and a rise in protectionism. The USA and China may try to delay the deluge with a trade deal, and there might be an agreement on more budget deficits. However, the writing is on the wall.

Christine Arumugam-Pillai

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Trade Delegation visits Poland

Trade Delegation visits Poland

Led by S.T. Kodikara and Chairperson of EDB Mrs. Indira Malwatte

It has been recognised that Central Europe is an economically important region for Sri Lanka. The potential of Central Europe remains largely untapped. This region is much open for business and in particular attractive for long-term growth prospects. Although Sri Lanka has a strong image in the region, our commercial engagement has been relatively limited. Sri Lanka’s total bilateral trade with Central European countries is USD810 million in 2018 with its total exports to Central Europe being USD 388 m and imports 422 m. But these figures do not tell the entire story, as it contains Sri Lanka’s healthy trade relations with only few of the countries like Poland and Hungary.

Sri Lanka looks at the Central Europe primarily as a market for our own strategic industries. Sri Lanka exports tea, apparel, manufactured tobacco, rubber finished products, electrical and electronic products, coconut fiber, coconut kernel products, edible fish products, transport equipment and parts, coconut shell products, parts of footwear, spices, essential oils and oleoresins and processed foods to Central European Region.

Recently the EU has announced its Europe- Asia connectivity strategy. It is important that Sri Lanka should now look beyond the largest EU states of Western Europe and utilise the potential of cooperation with the Central European countries which
comply with the uniform market rules which apply throughout the EU.

Sri Lanka and Central European countries have much to offer each other. There are many complementarities of interests and mutual benefits and dependencies. Central European countries have stable macro- economic environment, highly educated yet affordable workforce, favurable business environment and strategic location.

In the above context, Sri Lanka Export Development Board in cooperation with the Embassy in Poland organised an out-ward trade mission to Central Europe covering Hungary and Poland. This delegation was organised parallel to the First Session of the Sri Lanka Hungary joint Commission held in Budapest.

Business Forum and B2B Meetings in Warsaw, Poland

Immediately after the Hungary programme the delegation proceeded to Poland. Poland is the largest economy in Central and Eastern Europe. Poland’s population exceed 38 million.

The Sri Lanka Embassy in Poland and the Polish Chamber of Commerce organised the Business Forums and B2B Meeting Programme on 25 and 26 April in Warsaw, Poland. More than 40 Polish companies attended the Business Forum and more than 40 B2B meetings were conducted on 25 and 26 April 2019.

During this mission the Sri Lankan participants discussed with their counterparts on different options of partnerships. It was identified that the Central European market is a more affordable and reachable market for Sri Lanka, and the delegation was afforded with the opportunity to develop business sales leads, joint ventures, and distributorships in both countries.

Siddhalepa Exports Ltd, Director Vidyani Hettigoda stated that they received positive interests towards Ayurvedic products, hotels and franchise sectors from the counterparts they met in Poland and could establish a number of business contacts in Poland. Though Sri Lanka tourism industry braces for tough time, Polish companies specifically inquired for facilitation services for one to two weeks I Ayurvedic Health Resorts in Sri Lanka.

Further, Hettigoda mentioned “I saw a lot of possibilities in Poland to promote Ayurvedic products and would like to explore those . I developed many contacts, and is now exchanging emails, so the relationship have begun.” It is reported that in the next few months, EDB anticipates that many of these leads will develop into formal agreements, and the EDB will continue discussions with the private sector mission participants to track their individual results.

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Terrorism,  Afghanistan and  connectivity

Terrorism, Afghanistan and connectivity

India at Bishkek SCO foreign ministers’ meeting

Our heart goes out to our brothers and sisters of Sri Lanka, said who have recently witnessed the ghastly act of terrorism. Our wounds of Pulwama attack were still raw and the news from the neighbourhood has made us more determined to resolutely fight against this menace.”

So saying, Sushma Swaraj concentrated on the issues of terrorism during her address to the Shanghai Co-operation Organisation (SCO) foreign ministers’ meeting at Bishkek, Kyrgyzstan on 21 April.

Swaraj was attending her final high-level foreign engagement as Indian External Affairs Minister, since she decided not to recontest her Vidisha electorate at India’s recently-concluded general election,
citing ill health. Her successor, Subrahmanyam Jaishankar, a former Secretary to the External Affairs Ministry, may be expected to continue her

India got full membership of the SCO, along with rival Pakistan, at its summit in Astana in 2017. This the second SCO foreign ministers’ meeting in which India has participated, as a full member of the organisation, the first being held in April last year in Beijing. The foreign ministers’ meeting comes weeks before the SCO leaders’ summit is due in Kyrgystan, in which the Indian Prime Minister Narendra Modi and his Pakistani counterpart Imran Khan, as well as Chinese President Xi Jinping, will participate.


Swaraj said India is determined consistently to strengthen co-operation within the SCO framework for comprehensive, co-operative and sustainable security. Terrorism has been a particular bugbear of the Indian government, especially since the UN-listed Jaish-e-Mohammed terrorist group launched their attack in Pulwama on 14 February.

However, security against terrorism is not merely an Indian concern. The SCO’s Tashkent-headquartered Regional Anti-Terrorist Structure (RATS) has emerged as an important forum for co-operation in countering terrorism, separatism and extremism. A meeting held in March of the RATS council, attended by teams from India, China, Kazakhstan, the Kyrgyz Republic, Pakistan, Russia, Tajikistan and Uzbekistan declared plans to hold a joint anti-terrorism exercise, “Sary-Arka-Antiterror 2019”, and the first stage of the joint border operation “Solidarity 2019-2021,” the 7th meeting of the heads of the border services; as well as training workshops on identifying and preventing the use of the Internet for terrorist, separatist and extremist purposes.

The Syrian and Iraqi crises focussed the attention of SCO members on the threat from extremist Wahhabi terrorism. The successes of the Al Qaeda and Daesh (Islamic State) proved alluring to Islamists in the north Caucasus autonomous republics of the Russian Federation (Chechnya, Ingushtia) to join with extremists among the Central Asian Uzbeks, Turkmens, Tajiks, Kazakhs, Kyrkyz and Uighurs to form a Central Asian “Emirate”, separating Xinjiang from China.

As early as 2014, Uzbekistan’s President Islam Karimov warned that “Central Asia, a resource-rich and mainly Muslim region nestled between Russia, China and Afghanistan, could face a fate similar to that of Iraq, swathes of which have been taken over by Islamic State insurgents.”


Since then, the concerns of not just Central Asian leaders, but those of Russia and China, have awoken to the danger. Russia has emerged as the strongest bulwark against Islamist terrorism, and Central Asian leaders have sought its protection.

Another emerging force is Iran, which enjoys SCO observer status, as well as warm bilateral relations with China, Russia, India and Pakistan. Russia and the Central Asian countries and Russia have recognised Iran as a buttress against the rise of international Wahhabi terrorism. Russia and Iran are, increasingly, co-operating in the military sphere, especially in Syria, where they are protecting the government from Al Qaeda and Daesh.  This is appreciated by the leaders of the Central Asian republics, from which many of the Islamist militants originate. They are also collaborating in helping defend the Central Asian republics, for example in ending the brutal civil war in Tajikistan in 1997.

Relations between Russia and Iran are getting warmer, with the former supplying the state-of-the-art S-300 air defence to the latter, and keeping the option open to supply the even more sophisticated S-400 system.


Russia and Iran have co-operated in Afghanistan since the rise of Taliban in the 1990s. They also collaborated with the USA during its invasion of Afghanistan in 2001. As the USA and its allies wind down operations, Russia and Iran are working together closely to curb the expansion of Wahhabi outgrowths in the country, including Al Qaeda, Daesh and the Islamic Movement of Uzbekistan.

Swaraj said that “India stands committed to any process” which can help “Afghanistan emerge as a united, peaceful, secure, stable, inclusive and economically vibrant nation, with guaranteed gender and human rights.”

Her comments came against a background of increased Indian engagement with China, Iran and Russia on the Afghan peace process. India is seeking to expand its presence in Afghanistan, especially in the economic sphere, investing several billions of dollars in iron ore mines, steel mills, electrical power projects and transmission lines. Two keynote Indian projects in the country were the new Kabul Parliament complex and the Selma Dam in Herat province.


Iran is the key to increased economic and transit co-operation as India also seeks to improve its trade with Afghanistan, with which it has established two air corridors. India and Iran are collaborating on transporting goods to and from the land-locked country. India is investing over USD 100 million in expanding the southeast Iranian port of Chabahar, the sea-land transport hub for its Afghanistan trade.

Chabahar is also a node in another important connectivity initiative, the International North-South Transport Corridor that will connect Mumbai with Moscow. New Delhi also considers three other connectivity initiatives of importance: the Ashgabat Agreement for central Asia connectivity, the India Afghanistan air corridor and the India-Myanmar-Thailand Trilateral Highway.

The connectivity projects need to be, “inclusive, sustainable, transparent and respect the principles of sovereignty and territorial integrity”.

The full members of the SCO are: China, India, Kazakhstan, the Kyrgyz Republic, Pakistan, Russia, Tajikistan and Uzbekistan; with Afghanistan, Belarus, Iran and Mongolia as observers; and  Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey as dialogue partners.

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Silk Road & Young Dreams Sri Lankan youth win at  music competition

Silk Road & Young Dreams Sri Lankan youth win at music competition

Young musicians Nipuna Siripathi and Tharushi Athukorala, who represented Sri Lanka at the recently held “Silk Road & Young Dreams” competition, were placed 3rd for their outstanding performance under the ‘Silk Road Young Voice Musician’ category.

The international competition held in Beijing, China for the second consecutive year, had 300 participants from 70 countries. “Belt Road and Young Dreams” is a youth-oriented cultural exchange program, along the Silk Road, conceived and initiated in August 2018, by the Silk Road Cities Alliance, Beijing Belt and Road Co-operative Community and the Chongyang Institute for Financial Studies of Renmin University of China.

The objective of the competition is to provide youth from different backgrounds, hailing from countries and regions along the Silk Road, the opportunity to showcase their talents and engage with one another on an equal platform. The programme, designed to help youth understand different cultures, serves as a bridge to link societies.

A number of different categories were added to the programme in 2019, and the China Friendship Foundation for Peace and Development also joined as a co-host. CHEC Port City Colombo, the company behind Sri Lanka’s most futuristic project to date, was the sponsor for Nipuna Siripathi, who works as a composer at popular radio station Sitha FM, and his duet partner Tharushi Athukorala, is an announcer for CRI Sri Lanka FM radio.

The winning duo expressed their appreciation for the support provided by Port City, adding that they were overwhelmed by their win, especially since they were pitted against some extremely talented youth from around the world. They expressed their gratitude for the opportunity
to bring glory to mother

Creating opportunities for Sri Lanka’s future generation is a significant part of the project company’s CSR strategy, and encouraging local talent to shine at an international competition fit into that plan. Apart from the two winners who were sponsored by Port City, eight other Sri Lankans had participated in the competition under categories such as dancing, painting, photography and oration. Sri Lanka’s Deputy Ambassador to China Shani Calyaneratne Karunaratne was amongst the guests attending the event.

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Developing Countries and Public Interest Capitalism

Developing Countries and Public Interest Capitalism

Looking beyond Return on Equity for Successful and Sustainable Businesses

The twenty-first century is being hailed as Asia’s Century, with the balance of World GDP significantly shifting towards the continent. While in 1950 it was less than 5% of World GDP, the Asian share now accounts for about a third of it, and is forecast to be over half of it by 2050. With increasing economic output comes geo-political weight and a greater responsibility for the governments to secure the betterment of their citizens.

Capitalism, it is argued, is a social system in which the government is exclusively devoted to the protection of individual rights, including property rights – one in which there exists absolutely no government intervention in the economy.

However, causing a widening wealth disparity, the American and British style of Capitalism that has long been considered as the global standard, may be reaching a dead end. Therefore, to overcome the challenge the writers of the article advocate Public Interest Capitalism (PIC). While George Hara conceptualised the notion of PIC, Manish Uprety is interested in exploring the relevance and application of PIC in the context of developing economies.

Public Interest Capitalism is a corporate philosophy whereby, in the long run, a company sustains fair distribution to all the members who contribute to the company, including its employees, suppliers, customers, community, and shareholders. The fair distribution based on public interest capitalism reduces the increasing disparity and enables a more robust middle class.

Shareholder Capitalism and limitations of ROE and IRR

The concept of Capitalism increasingly prevalent in the globalised world today is based on the idea that the company is owned by stockholders. The style of management prevalent in the US with excess focus on shareholder interests and return on equity (ROE) may one day lead many socially beneficial companies to failure. In a company governed solely by stockholders’ interests, stockholders want the highest possible return in the short term. If this kind of Capitalism prevails, the results will be catastrophic.

Internal rate of return (IRR) is a popular measurement used by investors. Because IRR is designed for higher returns when a particular amount of cash is returned to the investor in a shorter term, the measurement tends to cater towards speculators rather than investors. If this measurement is applied to gauge the performance of whole industries that make up the real economy, lengthy research and development that lower the IRR have no place. In other words, IRR cannot be used to measure the profitability of industries such as manufacturing.

The drawback of this mind-set is that it leads the investors towards speculation rather than investment. To the speculative investors, industries such as manufacturing and retail distribution are not efficient since they require substantial R&D or the holding of inventory: their IRRs are too low. Stockholders also tend not to agree with long-term projects, which naturally makes the management more short-term oriented.

If speculators become a major stockholder, they try to make the company’s business that supports the real economy turn into a fund-like, finance-based business. These problematic speculators expect the management not to focus on R&D but on M&A. They demand that retained earnings be distributed as dividends or through stock buybacks – all to maximize short-term returns for shareholders.

Speculation is a zero-sum game that creates winners and losers – where wealth becomes concentrated into a small group of individuals and the remaining majority loses everything. Imagine that a hundred people bet USD 100 each in a game of rock-paper-scissors. One person wins the USD 10,000 pot, and the other ninety-nine people lose. The sum of the money involved is always USD 10,000, and no new value is created during the speculative game.

Shareholder capitalism, along with market fundamentalism, eventually leads to speculative financial capitalism. Speculation always creates a bubble economy, which of course is a major cause of instability in the financial markets throughout the world.

Public Interest Capitalism is a corporate philosophy whereby, in the long run, a company sustains fair distribution to all the members who contribute to the company, including its employees, suppliers, customers, community, and shareholders. The fair distribution based on public interest capitalism reduces the increasing disparity and enables a more robust middle class.

Public Interest Capitalism- A Sustainable Option

Hence a company should be considered as a public institution and should not be construed solely belonging to its stockholders. The profit must be distributed to all of the company’s stakeholders (called Shachu in Japanese) including its employees, customers, suppliers, local communities, and even the planet. While a stockholder who supports the company’s growth by holding one’s shares for the long-term could be considered as one of the true owners of the company, the goal of many investment funds is simply to artificially boost the stock price for immediate gains. These funds should not be considered foremost when deciding how to run a company.

Though there is always a demand for lowering corporate taxes, there is not much evidence to show that it leads to higher wages or more business investments. Instead, most of the profit is allocated to stockholders as dividends or through stock buyback programmes, with the intention of increasing share price.

When a company uses its funds to maximise shareholder returns rather than to invest for growth, long-term prospects of the company decline, and therefore long-term stockholders may suffer a loss. The employees are also discouraged from spending money since their raises always seem very limited compared to shareholder return. As a result, employment stalls, and the income gap widens. The disparities become a cause of conflict that makes economies implode and the world more unstable.

Under the Public Interest Capitalism, a company is considered as a public institution, and therefore its purpose is to contribute towards the society through its business. In order to achieve this, the company must:

  1. Allocate its profit to all of its stakeholders or Shachu that support the company, not just to its stockholders;
  2. Strive for sustainable growth; and
  3. Continually adapt and challenge itself to improve existing products and services offerings and venture into new growth businesses.

Because the shareholder-centric model of Capitalism (“Shareholder-centric Capitalism”) demands that management teams maximise share prices in the short run, long-term R&D projects become less prioritised and pushed aside. In particular, ambitious R&D projects that have the potential to create new core businesses, and even an entirely new industry, are no exception.

This necessitates medium- and long-term risk taking and investment in order to create and maintain stable economic growth in the developed countries of the 21st century, the development of new businesses and future key industries based on Public Interest Capitalism is crucial.

The idea of Public Interest Capitalism plays an important role not only in advanced countries but also in underdeveloped countries, because it encourages economic independence. In 2030, the population of advanced nations will only account for 12% of the whole world’s population, but the remaining 88% will live in the developing world, primarily in Asia, Africa and Latin America. Companies in advanced countries need to establish strong ties with underdeveloped countries in order to survive. However, shareholder-centric management and capitalism will only cause tension in the process making Public Interest Capitalism a viable and sustainable option.

ROC (Return on Company) Index- A Holistic Index

Instead of having a propensity to value a company through its ROE (Return of Equity), the Public Interest Capitalism’s research division at the Alliance Forum Foundation has come up with “ROC” (Return On Company), a new index that measures the value of the company from a holistic perspective of its stakeholders. The ROC (Return on Company) evaluates the sum of all the returns to the entire Shachu.

The company that distributes its profit to the entire Shachu will eventually bring a higher return to stockholders. A higher ROC tends to correlate with a higher future ROE, which implies that ROC is a long-term version of ROE.

ROC is an area of growing interest for the industry and academics. There is an inherent need to develop a new investment theory by linking ROC with stock prices. The positive correlation between the two would even motivate the speculators to invest in companies with sustainability and a fair profit distribution to Shachu, which would then spur the stock prices even further. The mainstreaming and establishing of ROC as a benchmark would lead to investors buying stocks or bonds of companies that act as “public institutions.”

PIC’s relevance for the Developing Economies

“Public Interest” refers to economic and general well- being of ourselves, our children and the future generation. A “company” should be a public institution that contributes to the society through its business. There are three pieces of management philosophy according to public interest capitalism: (1) fair distribution of the company’s profit, (2) long-term sustainability of the company and (3) entrepreneurship to create and improve the business.

The characterising features of developing countries are low per capita real income, high population growth rate/size, high rates of unemployment, dependence on primary sector and export of primary commodities. As countries move on their development trajectory, their economies gradually become isomorphic in terms of its constituents. For example, Japan, India and Sri Lanka, though on various levels of development, have the service sector contributing over 60 % in their respective economies. In the due course, growing economies face similar kind of challenges and need to set their priorities and focus areas. Cross-sector integration of technologies in IoT (Internet of Things), telecommunications, artificial intelligence, food, materials, and chemicals with healthcare is an important evolving area. A process including the careful collection and selection of information about new technologies both domestically and internationally, along with goal setting and speedy decision as well as creativity is crucial to bridge various divides. It demands an innovative regulatory policy.

Under the Public Interest Capitalism paradigm, governments have to play a major role in solving these challenges by building a robust ecosystem to realise technology and policy innovation in the priority areas. While projects should be led by the private sector, vision and goal setting by national leaders is essential.

Soon it shall be two decades when the philosophy of Public Interest Paradigm was first pitched, to shift the focus away from the excessive shareholder capitalism. Since then public interest capitalism has not only been adopted by leading management teams but has become the basis of policy changes to defy short-termism. With the West also beginning to notice the damaging effects shareholder capitalism has on the health of many companies that are engines of the economy and industry, the tide is finally turning in favour of public interest capitalism. It is quite prudent for the developing economies to take a page out of the book of public interest capitalism and use the very learning to build responsible companies contributing toward a healthy society and sustainable economy

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North South Corridor

North South Corridor

Chabahar could provide an “in” for Sri Lanka

US sanctions have mired the Iranian port of Chabahar in controversy. India, which has taken over partial control of the port, pledged about USD 500 m to develop the port, and expects it to serve as a gateway to Iran, Afghanistan, Central Asia, and beyond – it has been mooted as an alternative to the congested port of Bandar Abbas on the International North-South Transport Corridor (INSTC) which will eventually connect Mumbai to Helsinki, via Moscow.

The port is important to India, since it bypasses its regional rival Pakistan, which has hesitated to make overland access available to it through its territory. It also serves as a counterweight to the Pakistani port of Gwadar, 72 km away, which is being developed as a joint venture with China. Its location close to the Straits of Hormuz, the strategic waterway through which passes about a fifth of the petroleum consumed globally, gives it added significance.

The 7,200 km INSTC is a multi-modal freight network of shipping, railway, and roads, linking India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Eastern Europe. The Corridor, the shortest freight route between the Indian Ocean and Eastern Europe, allows these countries to bypass the Suez Canal and help reduce shipping costs, while providing alternative connectivity to Central Asia and the Caucasus.

Trials showed that the INSTC could cut the cost by USD 2,500 per 15 tonnes of cargo (a reduction of 30%), compared to using the Suez Canal route, and transit time to 25-30 days from 40-60 days, (about 40% reduction). Using the Corridor reduces the distance between Mumbai and Helsinki from 16,129 km to 9,389 km.


India and Russia laid the groundwork in 2000-2002 for the project, to take cargo from India to Bandar Abbas, and thence by rail to Bandar-e- Anzali on the Caspian Sea; to be shipped to the Russian port of Astrakhan and from there to the rest of Europe by rail. However, the project expanded from a single route to a network of linked transport systems.

In 2016 Presidents Vladimir Putin of Russia, Hassan Rouhani of Iran, and Ilham Aliyev of Azerbaijan agreed to develop the corridor, envisaged as one of Eurasia’s most important connectivity ventures, at a trilateral summit in Baku. In the meantime, other countries joined the project, including Oman, Syria, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Turkey, Bulgaria, Ukraine and Belarus. In addition, Finland, Estonia, Latvia and Pakistan have expressed their interest to join while South East Asian countries, such as Myanmar, Thailand, Cambodia, Laos and Vietnam, who are linking up with India through the India-Myanmar-Thailand Highway Project and East-West Economic Corridor, would thereby be INSTC-linked.

In January 2018, the first shipment of cargo from India to Russia, via the Iranian port of Bandar Abbas, marked the inauguration of the INSTC. The leaders of Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan signed a Convention on the Legal Status of the Caspian Sea, linking their Caspian interests with the INSTC, in August last year.  In February this year, Russian Railways Logistics Joint Stock Company (RZD) and Container Corporation of India (CONCOR), the largest rail container transport operator in India, signed a memorandum of understanding (MoU) for providing logistics services on INTSC and studying possibilities for developing joint logistics projects in Russia and India using international transport corridors.

In March, at a co-ordinating meeting of the participating countries, Iran’s Minister of Roads and Urban Development Mohammad Eslami revealed that INSTC member states decided to create a joint company to increase the route’s capacity by expanding its railway and port infrastructure. Each member state will appoint an official in charge of its INSTC affairs, to the secretariat in Tehran, while facilitating a homogenised system of tariffs and customs charges for the corridor.

At the same time, President Rouhani inaugurated a 164 km railway project between the Iranian cities of Qazvin and Rasht, filling a gap in the INSTC. Another gap is due to be filled shortly with the completion of the 167 km railway connecting Rasht to Astara, the Caspian port on the border of Iran and Azerbaijan. The central link is the Railway line from Moscow, through Azerbaijan to Bandar Abbas.


The INSTC in not intended as a counterbalance to China’s Belt and Road Initiative (BRI), being conceived long before the latter, by which it is dwarfed easily. The countries involved in the Corridor generally have stronger trading ties with China than with India and are already BRI partners. However, as it runs north-to-south across the Eurasian land mass, it could complement the BRI, by linking the latter’s two main axes of which run east-to-west across the landmass, was well as east-to-west across the Indian Ocean.

This is already happening at a practical level at Baku, in Azerbaijan, which lies on the Caspian. The Baku International Sea Trade Port (BISTP) has signed a MoU with companies and other entities in the south east Netherlands city of Venlo – a transport hub on the border with Germany, containing the distribution offices of some of the world’s largest companies, which handle cargo from Rotterdam, Antwerp and Amsterdam. The co-operation between BISTP and Venlo is based on the strategy of turning Azerbaijan into a regional hub, based on Baku and the new port coming up at Alyat, 80 km from Baku. The MoU called for a test container transportation along the Venlo-Istanbul-Baku-China axis.

President Aliyev participated in the Second Belt and Road Forum for International Co-operation in Beijing, and met Chinese President Xi Jinping. Aliyev is looking to develop Azerbaijan into a central node on the Belt. Azerbaijan also co-operates with Romania, Georgia and Turkmenistan on the Caspian Sea – Black Sea International Transport Corridor project, which will link Baku with Turkmenbashi in Turkeministan with the Georgian port of Poti, and Romania’s important transport node, Constanța port. Baku is also part of the Trans-Caspian International Transport Route, which links Georgia to Kazakhstan via the Caspian Sea.

In recognition of the need for INSTC to attain economic viability to become a truly transcontinental corridor, high-level discussions have taken place to link it to Latvia, Estonia and Finland, which are pursuing integration with the European railway network. However, progress has been slow, with most discussions being bi- or trilateral.


Iran’s only port on the Indian ocean, Chabahar has emerged as a key feeder port on the INSTC, alongside Bandar Abbas. The former is also likely eventually to displace the latter as the key southern port on the Corridor. In contrast to the already congested Bandar Abbas, which is not a deep-water port, Chabahar can handle very large, heavily-loaded vessels.

India’s interest in Chabahar increased as China invested in Gwadar. India, Iran and Afghanistan signed a trilateral agreement to facilitate transit and transport through Chabahar in 2016. The next year, India began exporting wheat to Afghanistan through the port, bypassing the Pakistani route it used hitherto.

However, development has been stymied by US sanctions on Iran. Compared to the 2018 throughput of 50,410 TEU of cargo,  only 225 TEU passed through Indian-controlled assets in Chabahar in the first three months of this year, a huge reduction.

Doubts about the viability of the port following the re-imposition of sanctions this year led to the failure of a search for a partner to develop the port. India Ports Global Pvt. Ltd (IPGPL), a special purpose company partly-owned by the India’s Kandla and Jawaharlal Nehru ports, which holds a 10-year concession at Chabahar, has been trying to find a private partner to operate its interests there since March 2017. Fearing penalisation for trading with Iran, potential  partners have shied away from a commitment.

As India complied with the sanctions and stopped buying crude oil from Iran, the government of the latter has responded by turning to Pakistan and offering to connect Chabahar with Gwadar, the terminus of the China-Pakistan Economic Corridor. This would effectively link Chabahar with the BRI.

Opportunity Sri Lanka

However, the US has kept Chabahar out of its sanctions regime, possibly in view of its part in increasing connectivity to Afghanistan and to Central Asia beyond. This might provide Sri Lanka with an opportunity to get in on the INSTC.

The Sri Lanka government intends to make Colombo port an integral part of global trade, transcending its role as a container transhipment hub for the South Asian region, and transforming it into a broader hub serving a wide range of nautical enterprises. In order to do so, it wants to take part in both China’s BRI and India’s Sagarmala (“string of seas”) Programme – which seeks to enhance the performance of its logistics sector by unlocking the potential of its waterways and coastlines.

Considering the Eastern Europe, and especially Russia, constitutes a strategic traditional market for Sri Lanka’s trademark Ceylon Tea, it would seem logical that Colombo should get involved in the INSTC, which would reduce the cost of shipping its produce. Getting involved as a partner in Chabahar port may provide leverage to get in  in on the act.

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Strategising Foreign Policy in the Asian Century

Sri Lanka’s entry into partnership with the Shanghai Co-operation Organisation (SCO) in 2009 was a milestone for the grouping as it welcomed its first Dialogue Partner. For Sri Lanka, having ended a ruthless conflict, it was an opportunity to share the experience and enhance co-operation with a vital region of the world. A decade later an assessment of this relationship indicates the vast potential, untapped areas and hitherto unexplored prospects, for both the SCO and Sri Lanka. It questions the original rationale for gaining partnership and denotes the inherent need for strategising foreign policy, on the part of Sri Lanka, if the relationship is to be strengthened and a mutually beneficial bond nurtured.

When the Council of Heads of State met in Yekaterinburg in June 2009, it was to implement a decision taken the year before, wherein the SCO was creating Dialogue Partner status for “a state or an organisation (that) shares the goals and principles of the SCO and wishes to establish relations of equal mutually beneficial partnership with the Organisation” and to accord such status “to a state or an organisation who co-operates with the SCO in specific areas of activity envisaged by the Charter and other treaty documents in the framework of the Organisation.”

“Shanghai Spirit”

Pursuant to the signing of the Memorandum granting Sri Lanka Dialogue Partner status in May 2010, Russia observed that its implementation would lead to a strengthening of international connectivity and expand spheres of interaction between the SCO member states and Sri Lanka. This, Russia believed, would be mainly in the areas of ‘ensuring security and stability, combating terrorism and developing economic, trade and investment co-operation.’ A founder member of the Organisation, with whom bilateral ties have grown since such connectivity was embarked upon in 1957, Russia has remained an unwavering ally of Sri Lanka. The degree of cordiality, even during the Cold War and thereafter, is evidence of the strength of the foundation, and bodes well for the decades ahead.

China has consistently called for “upholding the ‘Shanghai Spirit’ of mutual trust, mutual benefit, equality, consultation, respect for cultural diversity and pursuit of common development, in a bid to build a community of shared destiny in the region’”. President Xi Jinping highlighted the relevance of the “Shanghai Spirit” as “a guide to safeguard international fairness and justice, advocate multilateralism and the ideal of opening, respect each other’s interests, oppose interference in other countries’ internal affairs, solve disputes through peaceful means, and boost common development with the win-win ideal.” Collaboration through other mechanisms including the Belt and Road Initiative (BRI), and the Asian Infrastructure Investment Bank (AIIB), as well as direct economic partnerships have seen the building of a relationship based on history, but one that is directly relatable to the Rubber-Rice Pact of 1952 and the establishment of diplomatic relations in 1957.

Although Russia and China remain the key guiders of the SCO, the role played by the four Central Asian countries, notably Kazakhstan, the Kyrgyz Republic, Tajikistan and Uzbekistan cannot be discounted. Identified as critical for the achievement of the Asian Century, these four countries have experienced improving economies and thereby growing prosperity. The inclusion of India and Pakistan as the newest Members in 2017 reinvigorated the SCO, as its geography, population, economic potential and overall power grew in leaps and bounds.

Collective action

While disturbing activities, in early 2019, raised the propensity for doubt to rise over the decision of including these two countries, it is in the long term, that the fruit of such action would be truly understood. The need for all members to engage in joint all-SCO military exercises, partake in military co-operation, as well as share intelligence, would, in hindsight be a realisation of the sentiments expressed by President Xi at the Summit in Ufa in 2015. He called for members “to increase the action ability, create a strong security wall in the region.” The espousal of collective action included Xi’s emphasis on members being “more proactive in political contacts and coordination, work out response measures and together defend the security as well as stability in all member states of our organisation.”

Though apparent that collective action would bode well for SCO members, it is the impact that such action would have elsewhere, that is significant. India and Pakistan, as members of the SCO, would be called upon to engage at varied levels and on numerous occasions. Given that all member states must uphold the core principle of non-aggression and non-interference in internal affairs, in addition to conformity to the origin objective of creating a confidence-building forum to demilitarise borders, India and Pakistan would recognise the potential for themselves, of working together, for the realisation of the Asian Century in the long term, and the need to counter terror in all its forms in the immediate to medium term.

Whilst countering terrorism, extremism and separatism within its region became the raison d’être of the SCO, it didn’t limit itself to these three “evils” but explored economic connectivity and the promise of closer co-operation to enhance trade and prosperity among its member states.

Observer Status?

In 2015, Sri Lanka sought to upgrade the relationship to Observer Status, during the presidency of the Russian Federation, at the High Level Conference on “Security and Stability in the Region of SCO” in Moscow. Noting the new security challenges, including “illegal migration, human trafficking, drug trafficking, trans-national organised crime and cyber-terrorism,” all of which constitute serious threats to regional and global security, Sri Lanka highlighted the efforts being taken to combat this menace, as the representative informed the gathering of how the island was being used by drug syndicates as a destination as well as a transit point.  A call that was made then, that remains relevant to date is the need for co-operation with SCO member states to overcome and thwart such attempts.

In January 2017, it was reported that the Regional Anti-Terrorist Structure (RATS) and the defence establishment “will in the near future finish the preparation of the legal base for co-operation”. Auguring well for the future, it needs to be operationalised through a process of institutionalisation through which accredited legal departments, specific arms of the military and law enforcement agencies would commence activities of co-operation, on basis of priority and with much urgency.

A decade after Sri Lanka became a Dialogue Partner it is prudent to reflect upon that which has been, and comprehend the diverse, in-depth role that the country can play in and through the SCO. It must be a decision within the foreign policy establishment to enhance relations with the SCO, specifically in areas of countering terrorism, drug smuggling and transnational organised crime. The role that the Foreign Ministry could play in bridging the divide between and among law enforcement agencies and the military of Sri Lanka with those of the SCO member states would augur well to consolidate a strong and timely deterrent to those engaging in such illegal activities, and more importantly improve standards at the national level.

Greater role

The mutual benefit that could accrue to Sri Lanka remains vast. A decade after the ending of terrorism on its soil, Sri Lanka should be focused on building an image based on counter terrorism expertise, that may be shared within the region and beyond. With the natural terrain within the country, the troops having first-hand experience in battling terrorism, the military hierarchy possessing the expertise of thwarting terror in all its forms and manifestations, contribute to a collective process wherein Sri Lanka has much to offer. The ideal platform for such an exercise is the SCO.

Although still a Dialogue Partner, Sri Lanka does possess the ability to play a greater role of engagement than it does at present. A precedent was set in 2017 when Turkey another Dialogue Partner, was unanimously elected to preside over the SCO Energy Club, after a proposal was made to permit all members having varied degrees of partnership to chair the Club for a year.  While Sri Lanka is also a member of the Energy Club and would, in due course, be able to preside over its deliberations, it is noteworthy that initiative could be taken in proposing similar arrangements in the fields of increased military and counter-terrorism co-operation, and intelligence sharing.

If the main rationale for including Dialogue Partners is to be realised through which an “equal mutually beneficial partnership” would be built and co-operation would be engaged upon by such countries and the “SCO in specific areas of activity”, it is important that Dialogue Partners, particularly Sri Lanka, avail themselves of the opportunity of not only contributing towards the sustenance of the SCO but also comprehend the unique platform the SCO provides. Validating the partnership must not be a process left to the SCO to embark upon solely, but one that is enthusiastically sought by Sri Lanka. In strategising foreign policy for the next decade, it is the understanding of the importance of the Sri Lanka – SCO partnership that requires immediate attention. While the goal should be the attainment of full membership and the prospect of closer co-operation in the future, it is to the present that Sri Lanka must look in emphasising the contribution that she can make to the SCO.

The SCO has emerged as a powerful entity within less than two decades since its formation in 2001. Starting off as the Shanghai Five in 1996, including Kazakhstan in 2001, and then India and Pakistan in 2017, it has evolved into a force that is yet to exercise its muscle but one which possesses immense potential on the world stage.

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GITMU East-South synergy

GITMU East-South synergy

Japanese technology park fills

Japanese vacuum with South Asian know-how

Japan and Sri Lanka share a wide range of cultural similarities. Japan has opened her doors to Sri Lanka on many pathways. Sri Lanka, however, is yet to enter a beneficial platform with her longstanding ally.

That may be changing, however. Global IT Park, in Minami Uonuma in the Niigata prefecture was established in 2016 to create an innovative sphere within Japan. The initiative establishes a connection between Japanese companies and information technology (IT) firms from across the world. It is a brainchild of Kaushal Wawlagala, who now heads Adam Innovations Co Ltd, building the links between Japan and eight IT companies of Sri Lankan and Indian origins.

Digital technology

Speaking to OSL-THE Investment Magazine, Wawlagala elaborates how digital variations evolved with the emergence of the post-industrial revolution. The digital sphere has changed the way of doing business, Wawlagala adds.

“More and more customers look for a better consumer feel with digital technology. They need a digital presence in almost every operational requirement. Plus, there are new business models that emerged with the new digital technology. Uber is a classic example.”

Any organisation looking forward to digital technology can readily turn to Adam Innovations. Wawlagala’s team help organisations see the other aspects of digital-related business, such as understanding customer satisfaction.

Wawlagala’s first inspiration, causing him eventually to initiate a project in Japan, was born when he toured the country in 2005 to study mobile internet.

“Back then, Japan had the most advanced mobile internet system. But everything turned upside down when Apple introduced the iPhone. The Japanese mobile phone industry was kind of wiped away with this. I began to see where Japan erred.”

The Japanese always think in terms of Kaizen, which is continuous improvement, involving employees from the shop floor to top management. Once a product is developed, the Japanese are overly concerned about making it much better. Kaizen worked years ago. But now they must realise that the competition is not within but outside the market. That is what happened when Apple introduced the iPhone. Apple had already introduced iTunes, and gradually they launched a device to listen to music.

The device enabled communication in voice and web browsing. This was a remarkable shift, but Japan did fail to see the growing phenomenon outside their market.

Japan is home to many excellent technology companies. But they are not bothered about global trends. Wawlagala initiated the Global IT park, Minami Uonuma (GITMU) to fill that vacuum.

Employing strengths

The IT companies need to fulfil a certain eligibility criterion before joining the team. They must be equipped with a cutting edge technology, coupled with well-handled global exposure. GITMU also considers the number of projects deployed by IT companies across the world. The chosen companies can install their offices in the park premises and look forward to business prospects with a Japanese company.

Uniquely enough, GITMU does not focus on outsourcing. They continue to employ the strengths of Japanese companies and foreign IT firms. What Japan mostly requires right now is software, which is becoming a dominant factor in the digitalising industry.

Out of the eight firms registered with GITMU, six are Sri Lankan and two are Indian. Wawlagala’s team has restricted the inflow of any other firms in order to build a proper rapport between Japan and the IT companies.

“We are very selective. When these firms arrive in Japan, we have to give them business. Unlike other countries, Japanese companies take time to take a decision. IT companies, on the other hand, look at quick money. You need to be patient and also genuinely serious. The Japanese companies take time in order to build trust.”

Once the trust is established, the Japanese companies never violate the agreement signed between the client and the supplier. They would stick to their suppliers no matter how lucrative an offer may come from another supplier. If you manage to build a trusted relationship with a Japanese company, no other dealer can come in between, however better their offer is Wawlagala guarantees.

The IT firms registered with GITMU are offered a tutorial session on the cultural traits of Japan, which will ease their business coordination.


Can Sri Lankan IT firms be benefitted by strengthening a business relationship with Japan?

“There is a very good potential for SL companies. From day one, the market approach of the Sri Lankan IT firms is to work with a foreign company. That is because the domestic market cannot afford digital shift. But now it is gradually changing. Most good IT companies in Sri Lanka explore the opportunities for capturing markets in Europe and other countries. So they are naturally attentive to global trends and new technology. This is where I see the opportunity to work with Japan.”

The phenomenon is quite the opposite in Japan. Despite excellence, the Japanese market concentrates on the domestic market. They pay scant attention to new trends. They simply want to maintain a relationship with domestic companies, doing the same business over and over again. But now with this post-industrial revolution, the technologies, as well as the customer experiences, change. Wawlagala, therefore, observes a huge vacuum in Japan in terms of new technologies.

“I am a Sri Lankan living in Japan. IT is one key area for Sri Lanka to be hopeful. Our IT engineers are quite good compared to other countries. I have been working with IT engineers of other countries especially south and south-east Asia. Compared to them, our engineers have far better talent. If we can invest more in Sri Lankan IT talents, the country has the potential to become one of the fastest growing economies in the world. Every industry now needs IT. And Sri Lanka can provide that. We have that potential.”


GITMU focuses on Enterprise resource planning (ERP), a business process management software that allows an organisation to use a system of integrated applications to manage the business and automate many back-office functions related to technology, services and human resources. Digital Secure Remote Payments (DSRP) is another key area enabling secure transactions for remote payments.

The Internet of Things (IoT) and Artificial Intelligence (AI) are looked after by one of the companies. It is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers (UIDs) and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction

In digital marketing, Wawlagala sees huge potential. In fact, digital marketing offers a beneficial opportunity to engage consumers, but precious few companies have realised its full potential. Leading companies are capitalising on the forces that have changed fundamentally the way marketing can be done.

Japan is on board now. And that is thanks to Sri Lankan born Kaushal Wawlagala.

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The medicinal system common to India, Sri Lanka and Nepal offer these countries many opportunities

Two prominent things which connect India, Sri Lanka and Nepal are Dharma (the laws of man and nature) and Ayurveda (the indigenous medical system). Both aim at eliminating suffering. The term in Pali which the Buddha used to convey the concept of suffering is Dukkha. The Buddha said that his main concern was the problem of human suffering and how it could be eliminated. His whole effort was directed towards finding a way out of Dukkha. Similarly, in Ayurveda seven Dukkha are described by the great Ayurveda Acharya Vagbhata which cover all types of diseases including physical, mental, psychological and environmental and Papkarmaja (diseases caused by sinful activities).

Ayurveda essentially means “science of life,” and its goal is to cure the peoples who are suffering from physical or mental diseases. In the Buddhist literature, the Buddha is referred both as a physician and surgeon. Anything foreign to the human body is taken out by surgical procedures mentioned in the Sushruta Samhita, and grief was considered as something foreign. The Buddha could remove sorrow and thus he was a surgeon, while he could also remove and lessen the suffering hence he was a physician.

Jīvaka who trained at Taxila was an expert in surgical techniques and was the personal physician of the Buddha and Emperor Bimbisāra, and is sometimes described as the “Medicine King.” He figures prominently in legendary accounts in Asia as a model healer, and is honoured as such by the traditional healers in several countries like China, Vietnam and Japan.

Centuries ago

It can be posited that Ayurveda greatly influenced all the ancient medical systems of the world. Dharma and Ayurveda travelled eastward and westward through the universities at Nalanda and Taxila respectively. Later on Emperor Ashoka who had embraced Buddhism promoted the Ayurvedic system throughout the Mauryan Empire and its neighbouring countries in third century B.C. Buddhist monks took Ayurveda to all the countries where Buddhism spread and it reached central Asia, Tibet, China, Japan, Sri Lanka, Sumatra and many other countries.

The famous Buddhist monk Nagarjuna was also a great physician of Ayurveda. He made several researches in the field such as the introduction of mineral-based medicine which are still followed in the contemporary medical world. He was also a great philosopher and psychologist who played significant role in the development and enrichment of Ayurveda.

Over the centuries, Islamic invasions and concomitant destruction followed by European colonisation affected Dharma and Ayurveda drastically. And with the advent of Western medicine in the nineteenth century, it started playing a prominent role to address the issues of illness and disease across the world which continues even today.

Recent past

However, in the recent past, the phenomenal rise of the alternative medicine industry responds to some of the major shortcomings in what modern Western medicine has to offer in terms of costs, efficacy, availability, affordability and side effects. These shortcomings have created a situation where traditional medicine meets a perceived need. In several North American and European countries, the production and sale of herbal medicines, dietary supplements, and other so-called “natural” products have become a huge and profitable industry, amounting to USD 32 billion a year in the USA alone.

In the recent past attempts were made by various countries to revive their traditional medicinal systems to address the contemporary challenges to deliver health and wellness, and to reform their health systems with the aim of reaching universal health coverage, which is a key target under the Sustainable Development Goal for health. In other words, countries are seeking to expand coverage with essential services at a time when consumer expectations for care are rising, costs are soaring, and most budgets are either stagnant or reduced.

A significant increase in the costs of treating lifestyle-related chronic diseases has necessitated a paradigm shift towards a more holistic approach from the model for health service delivery away from a strictly biomedical model. This is an approach that stresses on prevention as well as cure and offers integrated services that address the multiple determinants of health.


China is the only country in the world where Western medicine and traditional medicine are practiced alongside each other at every level of the healthcare system. Traditional treatments include herbal remedies, acupuncture, acupressure and massage, and moxibustion, which have evolved over thousands of years and at present account for over 40% of all health care delivered in China. Recently Singapore has also pioneered some good policies that aim to promote traditional medicine. For example, patients are referred for traditional treatments, like acupuncture, by doctors trained in Western medicine. Countries like Singapore which aim to integrate the best from traditional and modern medicine would do well to look not only at the many differences between traditional and modern medicine. Instead, they should look at those areas where both converge, to help tackle the unique health challenges of contemporary times.

It is also to be noted that traditional medicine systems also provide a cost-effective and non-invasive alternative. For example, Marma which is part of Ayurveda shows immediate relief in the cases of Frozen Shoulder, Brachial Plexus injury, Cerebral Palsy, Post Paresis cases, Osteoarthritis Induced Disability etc. A country like India has 8 lacs (800,000) knee replacement surgeries every year, and each one costs over INR 5 lacs (500,000). One can imagine how much money can be saved and wellness provided to patients who suffer because of knee problems, without spending a single penny, through Marma.

Regional synergy

India, Sri Lanka and Nepal have to develop a synergy, in order to revive their core competencies in Ayurveda, in order to harness opportunities in the healthcare industry, which is one of the largest and fast growing industries in the world. The global healthcare market is expected to grow to USD 11,801 billion in 2021.

These core competencies reflect the fundamental knowledge and technical skills in the field of Ayurveda which make the local offerings in Ayurveda and its products “special,” especially at a time when the present global herbal product’s market is witnessing an annual growth rate of 7%, and should reach USD 6 Trillion by 2050.

As holders of the traditional knowledge of Ayurveda, India, Sri Lanka and Nepal can play the role of an organised player of value-added exports and innovative products, as Ayurveda is assuming an important role in the field of CAM (Complementary and Alternative Medicine) across the globe. It necessitates a diligent approach to harness the opportunities in the market, where India’s share is less than 2% and China’s less than 5%. Over 90% of international herbal medicine market is dominated by Japan and South Korea, because they have the infrastructure and wherewithal to process herbal materials with well developed technologies.

CII-McKinsey did a report on the medical tourism industry based on Ayurveda in the Indian state of Kerala, which was expected to be worth $4 billion by 2017. This sector brought in as much as USD 2 billion by 2012 as compared to an estimated USD 333 million in 2006-07. While medical tourists from Germany, France, Switzerland and the US prefer Ayurveda treatment, it is also becoming very popular in West Asia and the UK. The unique offerings of India, Sri Lanka and Nepal in the medical tourism sector based on Ayurveda will enhance their core competencies and seize a competitive advantage in the global marketplace.


In February 2009, the United Nations Economic and Social Council President Ms. Sylvie Lucas, while launching the 54-member body’s first panel discussion in connection with the 2009 Annual Ministerial Review theme, said “We cannot ignore the potential of traditional medicine in the race to achieve the Millennium Development Goals and renew primary health care for those who lacked access to it.”

Ayurveda offers enormous opportunities to India, Sri Lanka and Nepal to provide primary healthcare to their peoples, secure local healthcare market by developing local products and to serve others by providing quality health and wellness offerings through medical tourism opportunities.

There is an urgent need to develop core competencies in Ayurveda and to develop best practices and standards, along with expertise in its field of business, and the uniqueness of the products in the eyes of its customers. Incorporation of Ayurveda in policy initiatives devised by the authorities would help it become a leading player in the healthcare sector. A proper strategy and its careful implementation shall provide local and affordable health solutions in the country, while helping establish leading and trustworthy international pharmaceutical brands that are based on the traditions of Ayurveda.

Manish Uprety F.R.A.S. and Jainendra Karn

Manish Uprety F.R.A.S. is an ex-diplomat and co-founder of Ayush Darpan Foundation Trust; Jainendra Karn is the founder-chairman of Jambudweep Sanatan Network

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NLB SMS Lottery services  from your  mobile phone

NLB SMS Lottery services from your mobile phone

Consumers who purchase lotteries are a key factor for the development of the lottery industry in Sri Lanka. However, the busy modern lifestyle does not allow consumers to buy lotteries or find out results using the traditional methods. This causes a loss of consumers for the lottery industry. A successful response to this is updating the lottery industry with new technology. The National Lotteries Board, which earns financial resources for the betterment of the citizens and the country, has introduced a digitalised lottery service for Sri Lankan lottery consumers, further strengthening their traditional approach. The National Lotteries Board hopes to attract new customers to the lottery industry and to gain their support in strengthening the national economy through this new service.

Even though there are many apps for various services already available in Sri Lanka, an app for lotteries and related services is a first of its kind. Sujeewa Nissanka, Deputy General Manager, Marketing & Promotion, National Lotteries Board, spoke to OSL-THE Investment Magazine to discuss the SMS Lottery App introduced with busy consumers in mind. The introduction of the new SMS Lottery App has been done after a thorough analysis of the problems encountered by busy consumers in the traditional lottery methods.

Today, with a busy lifestyle, it is difficult to allocate time to buy lottery tickets. The lack of parking space in the vicinity of points of sale is another issue adding to the problem. Such problems are a key reason to make lottery related services available online, similar to other services. The busy lottery purchaser has to use various methods to find the results of the lottery purchased – watching the television lottery draw, reading the lottery results in newspapers or checking out the lottery box – and spend time on finding out results as well. With the introduction of the SMS Lottery App, he or she does not have to spend much time on the task. All lottery consumers can now purchase lotteries and check winnings easily through the SMS Lottery app.

Ease of use

If you have a smartphone, you can now access SMS Lottery App service from Dialog, Mobitel, and Hutch service providers. SMS Lottery App is available in Sinhala, Tamil, and English for the ease of consumers.

To access SMS Lottery App service, first, go to the website If you want to make an online purchase of lotteries on a daily basis, you can subscribe to the relevant lottery. If you want to buy a lottery today, refer to Buy Now. You need to provide your mobile number and National Identity Card number to access SMS Lottery app services. Creating a password for your account for security reasons and accessing SMS Lottery App services with a text message to #811# is also possible.

SMS service

You can also buy lottery tickets via SMS. Send an SMS to 811 with the code name of the National Lotteries Board lottery you wish to purchase (E.g. – Gowisetha GS, Megapower MP). If you purchase a lottery via the SMS Lottery App, the results of the draw will be sent to your mobile phone in an SMS after the draw. If you have any winnings, you will be notified of it via SMS as well. Usually, the duration of a lottery is 6 months and SMS Lottery App stores the data of customers’ transactions for a period of 6 months.

Ease of pay

The purchase of lottery tickets via the app will be at a service charge of Rs. 04 plus tax. Accordingly, you can spend less than the usual lottery price of Rs. 25 and can easily play the lottery with new technology. You can make purchases from the SMS Lottery App whether you have a pre-paid or post-paid mobile connection.

You can get more information on the app by visiting the web site or by calling hotline
0112 734 081.

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