Sri Lanka is in the throes of change, and the next few years will be critical for the country as change is challenging but presenting new opportunities. According to Reyaz Mihular, Managing Partner, KPMG in Sri Lanka, change has become the new normal and for Sri Lanka it means it needs to act ‘now’. Be it the government or a business, how we respond is key to managing the increasing pace, scale and scope of change.
Reyaz comes with extensive experience advising multinational clients on how they can drive growth, reduce risk, and anticipate the opportunities presented by a rapidly changing business environment.
Speaking to International Finance Magazine, he shared his views on how regulatory reforms and constant technological disruption are changing the advisory landscape, the importance of corporate governance and what Sri Lanka must do to accelerate the phase of growth. Excerpts from the interview:
Sri Lanka is in a phase of growth. The ADB expects the economy to grow at 5.5% in 2017. What should be done to accelerate this growth?
Right now, Sri Lanka is going through a very important phase of change, with a move towards transparency and better governance. The Central Bank expects the Gross Domestic Product (GDP) to expand between 5.5% and 6.0% in 2017. Continuing to focus on governance and the ease of doing business are key. For me, that’s top priority. It’s important we foster innovation, digitally transform our economy and invest in new processes to capture opportunity.
Sri Lanka has also gained increasing positive international confidence and plans by the government for sustainable development, digital economy, the reform of state-owned enterprises (SOE), governance and financial inclusion, are all positive indicators. The industrial and services sectors have been top contributors for growth and have recorded a significant growth rate underpinned by growth in sub sectors such as manufacturing, construction, financial service activities, insurance activities and telecommunication activities. have been top contributors for growth and have recorded a significant growth rate underpinned by growth in sub sectors such as manufacturing, construction, financial service activities, insurance activities and telecommunication activities.
Another positive area for Sri Lanka is the tourism sector, which is driving ahead with a growth of 18.7%. Sri Lanka has plenty to offer as a destination compared to other popular tourist destinations in the region. However, it is important that we craft a unique selling proposition and attract the right mix of tourist segments. For example, the tropical climate makes Sri Lanka one of the few countries that offers year-round golfing, which can be an attractive option for business and higher income earning travellers.
How will you describe Sri Lanka’s investment climate at the moment? What are some of the positive initiatives?
For businesses and investors, confidence is important. No doubt, it is a country many of our global clients have a keen interest in and has gained valuable global attention over the last few years.
The fact that Sri Lanka is strategically located, could be a very attractive hub to tap into opportunities in South Asia and Southeast Asia. The Colombo port is one of the busiest trans-shipment ports in South Asia and has been ranked among the world’s best 25 ports in accordance with the Alphaliner rankings in 2017.
The impending return of the GSP Plus, is obviously another key advantage and will help improve overall exports to European markets. There are other initiatives such as the planned Colombo International Financial Centre and the government’s efforts to enter into FTAs with China, Singapore, Japan and Korea, which are encouraging for businesses.
We are committed to helping clients success in an era of transformational change in Srilanka
– Reyaz Mihular
KPMG in Sri Lanka
Digital companies are spurring growth in India and China. How much impact has the digital economy had in Sri Lanka?
The current government is taking significant steps in uplifting Sri Lanka towards a digital economy. An example being the Digital Transformation Technology, which was introduced to the country by the government in collaboration with Microsoft last year. However, the government needs to further digitalise the public sector, which is vital for the government to improve efficiency, transparency and reduce corruption. For example,
the modernisation of the current customs system and overcoming age old customs practises is vital and could help to earn much needed revenue for the country.
What is your organisation doing to keep up with this accelerating phase of technology?
Technology is certainly disrupting business models and changing the way businesses operate. KPMG’s Global CEO Survey points that CEOs expect their companies to transform within the next 3 years and it’s not surprising, considering the conversations we are having every day with our clients. This means KPMG’s role as a trusted advisor to many of Sri Lanka’s leading organisations has never been more critical. Clients are increasingly looking for us to work closely with their teams to develop solutions that deal with the accelerated pace of change and technology disruption. Hence, it is imperative that we acquire new skills and develop innovative services to help clients succeed in an era of transformational change. In the last couple of years, we’ve made significant investments in new services and solutions for our clients. We have built some powerful analytic capabilities and one of our latest developments involves using big data and analytics.
You state that companies are transforming their businesses. How is KPMG positioned to assist clients faced with such transformations, due to constant change in regulatory reforms and technological disruption?
Despite advances in technology, we know that what still makes the difference to clients is their experience working with our people. When my clients share with me what they appreciate most about KPMG in Sri Lanka, they always say it is the people. KPMG is definitely the home to some of Sri Lanka’s best talent and I take great pride in the professional services we provide to our clients and the quality of our people. We understand the importance of gaining a global perspective and invest in sending our people for training abroad. We want to provide them with global opportunities bringing a breadth of perspective and knowledge to our clients. KPMG in Sri Lanka also has a 5,500 square feet dedicated floor for year-round training.
We believe it has never been more important that we offer a full range of professional services, combined with deep sector expertise. In recent times, we moved into real estate advisory and leisure and hospitality advisory, due to the lack of a professional and reliable organisation servicing this requirement. It is now one of our fastest growing advisory services. In 2015, we also set up a supply chain advisory by employing supply chain graduates from the University of Moratuwa and CINEC and today, this too, is one of the highly sought after advisory services . This reinforces the fact that if you wish to grow and develop as an organisation, you need to think and act innovatively.
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