Q: What are your expectations of the business environment in the next 12 months or so?
A: The business environment in the next 12 months would be extremely difficult to predict.

It would depend on three main risks.

The first is the medical risk due to COVID-19 and the constant lockdowns that interrupt business activity, which would result in a turbulent environment. This can be negated only if every citizen acts responsibly and the government rolls out a successful vaccination programme.

Another risk is the stress on the nation’s micro-economy due to frequent lockdowns, redundancies and business closures. The greater the uncertainty of medical risks, the more the economy suffers, resulting in a depressed business environment.

To overcome this, corporates should lead through innovation and efficiency, while safeguarding the livelihoods of their employees and creating a support network is necessary.

The third risk is the substantial devaluation of the Sri Lankan Rupee against the US Dollar and Euro, which affects the cost of living, reducing people’s disposable incomes.

Furthermore, the items on the temporarily suspended list of imports directly affect businesses such as ours. A strong fiscal policy along with an increase in exports and the opening up of tourism under strict quarantine guidelines could be a solution.

Q: In brief, what are the main challenges confronting corporates?
A: The main challenge for corporates is the unpredictability of the business environment where corporate management would have to plan for multiple scenarios and variables. Companies also have to be extremely agile in adjusting to different situations while thinking of short-term survival, which is not at the expense of midterm growth.

Furthermore, achieving contrasting objectives related to annual profit, liquidity, people and sustainability, and meeting multiple stakeholder objectives during this volatile period are other major challenges that entrepreneurs and CEOs would be saddled with.

The uncertainties in the political, economic, sociocultural, technological, environmental and legal (PESTEL) environment would create doubt with the strategies to be executed temporarily while holding off certain business decisions indefinitely would be a major obstacle that businesses must overcome. Adapting to the new normal and employees’ mental strain have to be dealt with by the human resource specialist in the organisation.

Therefore, there are numerous different challenges with varying levels of complexities and magnitudes that corporates would likely face. Government authorities such as the Ministry of Industry and Commerce, Department of Imports and Exports Control, Sri Lanka Customs, Inland Revenue Department, Department of Labour and so on should also understand these challenges, and create a conducive environment for corporates to overcome them.