Strengthening the Partnership through NTB’s & PPP’s

1. Strengthening the Partnership through NTB’s & PPP’s SAARC-CCI CAPACITY BUILDING WORKSHOP. Tajo Tasha, Thimphu, Bhutan 28th November 2013 By Nailin Attygalle Secretary General/CEO Federation of Chambers of Commerce & Industry of Sri Lanka

2. Content • Regional context • Action to be taken • NTB’s in right perspective • How to overcome & strengthen the unity • PPP approach • Sri Lankan perspective • Types & benefits of PPP • Future of the region through strengthening the partnerships. NalinAtty@SAARC-CCI-Thimphu

3. Regional Context • 1/4th of the world population • Accounts for 3% of world GDP • Less than 3% of world exports • Less than 2% of world FDI NalinAtty@SAARC-CCI-Thimphu

4. Regional Context- 2 • Fastest growing economies- Averaging over 6% for last decade. • Biggest market place in terms of population • Young & Young adult population- 1/4th are in the age between 15 to 30. • Annual income growth averaging 8% NalinAtty@SAARC-CCI-Thimphu

5. Regional Context- Need Action? • Are we using our strengths? • Statistics, research studies, recommendation and meetings all over. • Sleeping giant is going to miss the bus? • Need consensus for remedial action NalinAtty@SAARC-CCI-Thimphu

6. Regional Context- Need Action 2 • Negative list/sensitive list • Trade agreements and MOU’s • Entities such as SAARC- In existence and action oriented activities?- outcome to date? NalinAtty@SAARC-CCI-Thimphu

7. Definition of ‘Nontariff Barrier’ • A form of restrictive trade where barriers to trade are set up and take a form other than a tariff. Nontariff barriers include quotas, levies, embargoes, sanctions and other restrictions, and are frequently used by large and developed economies. NalinAtty@SAARC-CCI-Thimphu

8. NTB Further Explanation • Nontariff barriers are another way for an economy to control the amount of trade that it conducts with another economy, either for selfish or altruistic purposes. • Any barrier to trade will create an economic loss, as it does not allow markets to function properly. • The lost revenues resulting from the barrier to trade can be called an economic loss NalinAtty@SAARC-CCI-Thimphu

9. NTB’s • The Agreement on SAARC has a commitment for reducing tariffs, but has nothing specific to offer with regard to the other complements to facilitating trade. These Barriers are relating to: • Testing requirements; • Standards; • Customs valuation, • Labeling requirement; • Limitation of land port facilities; • Goods delivery/storage. NalinAtty@SAARC-CCI-Thimphu

10. Inter Regional Strategy to Overcome NTB’s • Respective country policies • Political cultures • Too little to offer and rest comes as NTB • Regional players unity and understanding • Consolidation within the country • Build strong partnerships with regional players NalinAtty@SAARC-CCI-Thimphu

11. How to strengthen the Partnerships • PPP model • It is a paradigm shift • Whole world believes it but the implementation issues. • It is a challenge for the region NalinAtty@SAARC-CCI-Thimphu

12. Definitions of PPP An agreement between private and public sector agents to undertake a particular project in line with at least one of the two principles below; Joint decision making Joint risk financing NalinAtty@SAARC-CCI-Thimphu

13. Regional Governments Attitude • No privatization of government ventures. • To use as a political trump • Survival strategy • CAN WE CHANGE THIS ATTITUDE?? NalinAtty@SAARC-CCI-Thimphu

14. Sri Lankan Example/Perspective • Current Government through its long term policy frame work has clearly stated that the Government does not believe “Privatization” further more and instead private sector is a vital part of economic development and thus it is encouraged to partner the Public entrepreneurial ventures NalinAtty@SAARC-CCI-Thimphu

15. Sri Lanka vs Region • All believes no privatization • All believes private sector is the engine of the economic growth • ONLY WAY FORWARD to OVERCOME NTB’s are PARTNERING LOCALLY & REGIONALLY NalinAtty@SAARC-CCI-Thimphu

16. Types of PPP’s • Public provision of collective goods • Service provision contracts • Outsourcing/contracting • Outright privatization • Design and construct (D & C) • Sale and leaseback • Operate and maintain (O & M) • Concession • Operate maintain and manage (OM & M) • Build transfer operate (BTO) • Build operate transfer (BOT) • Build lease transfer (BLT) NalinAtty@SAARC-CCI-Thimphu

17. Types of PPP’s 2 • Build lease transfer maintain (BLTM) • Build own operate remove (BOOR) • Build own operate transfer (BOOT) • Lease renovate operate transfer (LROT) • Design build finance operate (DBFO) • Build own operate (BOO) • Design build finance operate manage (DBFOM) • Franchise • Joint venture (JV) • Regeneration partnership NalinAtty@SAARC-CCI-Thimphu

18. Benefits of PPP • Accelerated infrastructure development • Faster implementation • Reduced whole-life costs • Better risk-allocation • Better incentives to perform • Improved quality of service • Generation of additional revenue • Enhanced public management NalinAtty@SAARC-CCI-Thimphu

19. Reasons for Implement PPP’s • Government’s funding Gap • Capacity constraints • Benchmarking public sector to the private sector • PPP also ensures that cost and time over runs are not born by the government • Off Balance Sheet • Risk of Cost and time over runs passed to private Company NalinAtty@SAARC-CCI-Thimphu

20. Governments Strategy to Shift • The governments should move away from the notion that state should play the leading role in infrastructure development • Instead governments should seek greater involvement of the private sector in the development of the country • More private public partnerships are encouraged in this regards NalinAtty@SAARC-CCI-Thimphu

21. Governments Responsibility • Prepare master plans and enable policy formulation • Legislative and institutional reforms • Providing common infrastructure • Administrative capacity building • Identification of thrust areas/zones/ projects • Risk assessment and mitigation • Facilitate efficient project clearance • Ensure transparency and welfare • Country promotions and research NalinAtty@SAARC-CCI-Thimphu

22. Private Sector Responsibility • Investing into new business opportunities • Efficient management of the resources • Corporate and social responsibility • Ecological sustainability • Man power building and training of high quality staff NalinAtty@SAARC-CCI-Thimphu

23. Sri Lanka- Success Stories • Sri Lanka Telecom • Sri Lanka Ports Authority with SAGT • Sri Lankan Airline • Regional Plantation Companies • Hingurana Sugar Industries Ltd. NalinAtty@SAARC-CCI-Thimphu

24. Why Re-invent the Wheel • Region as one team • SAARC-CCI as the catalyst- Co-Committee • Information portal at SAARC-CCI • Dynamic & Vibrant entity • SAARC-CCI communiqué to respective governments NalinAtty@SAARC-CCI-Thimphu

25. Derived Outcome • Strengthening co-operation • Acceleration of infrastructure developments • Showcasing the regional power • Consolidating the respective economies • More employment creation • More disposable income to the people • Improvement of macro economic indicators • Better future for younger generation NalinAtty@SAARC-CCI-Thimphu

26. Role of Governments & SAARC-CCI • Governments • Minimize constrains • Adopt the right policy, regulatory • Institutional reforms • SAARC-CCI • Strong lobbing, advocacy and recommendations NalinAtty@SAARC-CCI-Thimphu

27. Accept the Challenge or Perish • We are a strong entity- sleeping-giant • Intellectual studies, researches already done • We know, ‘where are we today’ • We know, ‘where do we want to be’ • Challenge is, ‘how do we get their’ • POSITIVE APPROACH & ATTITUDE and ALL REGIONAL PLAYERS HAS TO WORK AS CHANGE AGENTS. NalinAtty@SAARC-CCI-Thimphu

28. THANK YOU. NalinAtty@SAARC-CCI-Thimphu

29. NalinAtty@SAARC-CCI-Thimphu