A RESPONSE LIKE NO OTHER IS NEEDED
Q: How do you see the ‘new normal’ for business panning out?
A: We don’t know what the ‘new normal’ means. We frame our projections and scenarios based on our historic experiences and knowledge. None of us have experienced a crisis of this scale in the past. Therefore, we’re simply reacting to it on a day-to-day basis, which appears to be the current ‘norm.’ This is dangerous.
This is a global crisis like no other. Hence, it requires a response like no other. As a business, the priority is to stay afloat, pivot and survive the crisis. To do this, everything is on the table. Any contract is negotiable. Every line item in your profit and loss needs to be scrutinised.
It is very important to understand that the so called ‘normalcy’ will not return for at least 12 months. Thereafter, it will be a new world with economic devastation never seen before. Plan for this worst case scenario and ensure you have a 12 month cash runway in place. This is the priority for any business.
Q: What lessons have we – the business community – learnt from this crisis?
A: It’s too early to answer this question as the crisis is still unfolding. The only thing we know for certain is that we have to act decisively and unemotionally. We have to work differently as the old reality will cease to exist – and it is debatable if we will ever see the old world again.
Some of us recollect air travel without the tight security that is standard practice today. In fact, some of us remember no security at all. This pandemic will change behaviours and practices in a manner similar to how airport security changed the way we travel. The way we shop, travel and interact will change drastically. Businesses will have to re-tool and reinvent themselves to succeed in the new post COVID-19 world.
Q: What is the outlook for jobs and employment in the medium term? And how should the authorities address the prospect of rising unemployment?
A: The outlook for jobs and employment in the immediate to medium term isn’t promising as enterprises take the necessary steps to ensure organisational survival. At its least extreme, this could entail salary cuts and a restructure of compensation scales, but as we visualise the future and what the market might become more steps might be needed by a business to resize, requiring drastic decisions such as having to lay off a layer of management for example.
In addition to this, daily paid workers and those working in the SME sector have been badly impacted. Unfortunately, as has become apparent in most countries, unemployment has begun to skyrocket and Sri Lanka is not immune to this. In my view, the state must begin to provide liquidity to the banking system, and key industries and sectors, to sustain economic activity and employment. If the economy cannot be sustained, the situation for the market and the public will become untenable.
ABOUT LMD’S A LISTERS
BOOST TO REAL ESTATE INVESTMENT
Q: What are your expectations of the business environment in the next 12 months or so? A: With the reduction in interest rates and increase in money circulation, people have a greater tendency to invest in real estate over the money market amidst the pandemic. We have seen similar patterns even in developed markets such…
EMERGENCE OF A NEW ECONOMY
Q: How did the pandemic necessitate a digital economy? A: Countries were not prepared for the COVID-19 pandemic’s impact on the economy and people, but it has resulted in the emergence of a new economy and way of life. It is technology, and the spirit of humans to survive and push past boundaries that have…
PRIORITISING CRUCIAL SECTORS
Q: What are your expectations of the business environment in the next 12 months or so? A: I believe that business is not likely to pick up until at least mid-next year for the hospitality sector. Business was nonexistent and as a measure to prevent exorbitant losses, we converted our hotel into a quarantine centre…
A POSITIVE AND FLEXIBLE PATHWAY
Q: Do you expect the national economy to pick up this year? A: If the third wave of the pandemic is brought under control as soon as possible, then we can expect the national economy to pick up towards the second half of the year. To ensure this happens, the vaccine must be sourced in…
RELIABLE PARTNERS IN A CRISIS
Q: In brief, what are the main challenges confronting corporates at this time? A: I think corporates today are besieged with a plethora of problems caused by the prevailing situation. First and foremost is the challenge in keeping their workers safe from COVID-19, and flowing from that is the inability to keep production cycles running…
IN A STATE OF DELEVERAGING
Q: How do you perceive the economic climate at present? A: I would like to really think about the state that the country’s economy is in. Our debt repayments are much higher than our income and this puts Sri Lanka in a state of deleveraging. This recently manifested itself in a 14.2 percent increase in…
EVER EVOLVING EXPECTATIONS
Q: What modern-day challenges do businesses face? A: Information overload – in the new world we live in, there’s never a lack of information. About 2.5 quintillion data bytes are added every day; more data is created in a single day than the combined amount generated over 99 percent of human history. Previous generations of…
EXPANDING CREDIT FACILITIES
Q: What is the bank’s corporate strategy for 2021/22? A: DFCC Bank’s 2021/22 plan is based on our five year strategy for 2020-2025 with the aim of making it one of the most customer centric and digitally enabled banks by 2025. Our lending plans will align with the government’s budget proposals to facilitate the growth…
REMAINING IN THE SPOTLIGHT
Q: What are Sri Lanka Tourism Development Authority’s (SLTDA) priorities for 2021/22? A: The global tourism industry will continue to experience a huge shift in the way of doing business. Our innovative bio-bubble concept launch in January was recognised at ITB Berlin. We hope this will boost traveller confidence. Therapeutic destinations and experiential travelling are…
