- Exclusive interview with Sri Lankan-born American serial entrepreneur Insaaf Mohideen
By Imsha Iqbal and Zahida Rizvi
Mohideen spoke on Sri Lanka’s startups, attracting foreign investors, its Ease of Doing Business Index ranking, the Port City Project, and the economic outlook, as well as a few other important topics with regard to Sri Lanka.
Talking about Sri Lankan startups in fields such as cloud computing and FinTech, Mohideen said, they can succeed by having the “right team” with intensive skills of problem solving. Innovation along with much exposure to “true, fresh” problem solving ability in the enterprise world would lead the company forward.
The exposure to problem solving also helps, the entrepreneur pointed out. However, a lot of individuals in Sri Lanka lack exposure to international platforms. Such opportunity, even from an internship, is worthy for the youth, he suggests. He further said, on a disappointing note, he has not come across such individuals from Sri Lanka, but from other countries. “I see people from Bangladesh, Nepal, India, but not from Sri Lanka, I don’t know why.”
Sri Lanka has now introduced a national online platform, www.startupsl.lk, not only for inventors, but also for mentors and incubators “connecting to thousands of other startups” with the aid of the Information and Communication Technology Agency of Sri Lanka (ICTA). FinTech also supports development and innovation – except for the use of cryptocurrencies in the context of Sri Lanka. When it comes to cloud computing startups, ICTA also provides services in that sector.
Speaking on whether Sri Lankan education contributes to the younger generation becoming entrepreneurs, Mohideen responded that Sri Lanka has an archaic education system, but Sri Lankans are not necessarily disadvantaged by that. Also, what makes a person an entrepreneur is not always about education and skills, he said, but being surrounded by a community of entrepreneurs to brainstorm – and a couple of investors. Exposure to real life problems and the facilitation by the Government equally contributes to youngsters in becoming entrepreneurs.
For example, in a country like the United Arab Emirates (UAE), its people have become comfortable with money, but it is not sustainable. Therefore, its Government is looking forward to making UAE a technological hub and facilitated in establishing 500 startups, he elaborated. He further emphasised that unless there is the organic will to innovate, enterprises will not be nurtured.
Directing the conversation towards foreign direct investments, Mohideen said that attracting direct investment to Sri Lanka is an absolute challenge. It is because the application and qualification is not simple, as there are no clear directions or guidelines to invest in a startup such as digital banking. Therefore, the investor has to go through a politician and meet 25 other officials who yet fail to answer how these work in Sri Lanka.
The investors have to encounter the risk profile but after showcasing the project, they can invest in the project that the investors are keen on. For instance, in a country like Ireland, within a 0% tax environment, tech companies such as Facebook and LinkedIn are able to buy property. The Government puts effort and money on building campuses as facilitation to those investments.
Moreover, Mohideen said Sri Lanka is a little-known island. “I come here because I’m Sri Lankan,” he said, indicating that in order to attract foreign investors to the country, entrepreneurs need to engage in canvassing the country’s investment profile in the sectors of banking or ICT.
The level of Foreign Direct Investment (FDI) into Sri Lanka was at $ 758 million in 2019, and by 2020, Sri Lanka could reach only $ 528 million, according to the Central Bank. This year’s expectation is to recover through FDIs, with a 3.4% economic growth.
Sri Lanka’s Ease of Doing Business Index ranking has become a hindrance to attract investors as well, he highlighted. A higher Ease of Doing Business Index ranking indicates that a certain country has simpler and business-friendly regulations to conduct business operations with protective property rights. The higher the ranking is, the better it is for the particular country. This index has been created by the World Bank (WB). The ranks 1-20 are considered high, and countries such as Singapore, Hong Kong, Malaysia, the UAE, and Taiwan are within these 20 high-ranking countries.
According to the World Bank’s December 2019 report, Sri Lanka stands at 99th position. Thus, the political stability, transparency in policy, and policy stability would allow the country to reach a higher rank in the Ease of Doing Business Index. Subsequently, it would welcome investors to Sri Lanka.
Switching the conversation to the Colombo Port City Project, he noted that the consistency of policy and procedures would help the country prosper as much as Singapore.
The Port City Project alone would not help Sri Lanka become the next Singapore or Hong Kong. The regulations and the procedure with regard to starting up a business, issuing a license to a business and getting a tourist visa needs to be easily accessible too, the entrepreneur said. In Hong Kong, a local or tourist can open up a grocery store by visiting their official website. “The process is simple and anyone can get it done”, he said.
On the contrary, in Sri Lanka, the investors primarily need to get connected to somebody known. “Not everyone is connected, that is a lot of time wasted,” he explained. Unlike Sri Lanka, countries such as Bangladesh and Norway “do well” without investors chasing after officials. “It’s sales 101 – to lock that deal when a customer walks in,” he noted.
Talking about the revival from the heavy economic disruptions due to the pandemic, Mohideen pointed out that while everybody has been impacted because of the pandemic, Sri Lanka has to recover from the Easter Attacks as well. Port City stands as an optimistic factor, and the Government handled the situation as best it could. When it comes to policy, however, he said he does not see a drastic change.
Giving his perception on Sri Lanka’s economic outlook, he mentioned: “Sri Lanka hasn’t had robust economic activity.”
The Asian Development Bank (ADB) forecasts that Sri Lanka will achieve a 4.1% GDP growth in 2021 and see inflation rates at 4.5%, while per-capita GDP growth for Sri Lanka is expected at 3.5% for 2021.
The serial entrepreneur concluded by saying that he is not hopeful of seeing change in innovation in Sri Lanka, unless it implements policies that are more democratic and not authoritative.