By W.A. Wijewardena –

Dr W.A. Wijewardena

Handagama Style: Kill two birds with one stone

Asoka Handagama, mathematician turned central banker turned quantitative economist turned rural developer turned artiste of numerous genre, has sought to kill two birds with one stone, a stone in the style of a Sri Lankan “Oscar” this time. His first bird is to support the ailing external sector of the country. His second bird is to give a “rebirth” to the already dead, according to Handagama, Sri Lankan cinema industry. He did so in a public lecture he delivered to a packed audience at the Central Bank’s Centre for Banking Studies last week on the very long theme “ Sri Lankan Cinema: More than a Dream; A Strategic Idea to Develop Cinema Industry as a Part of Overall Development Plan”. Handagama who is famous for creating ‘adults only’ artistic work sent his audience to laughter in an ironic twist of humour at the beginning that his lecture will also be for adults only, meaning that it is for serious consideration.

Sri Lanka’s external sector gone sour

Now to the nature of the first bird he sought to kill, namely, Sri Lanka’s ailing external sector.

Sri Lanka’s external sector involving all economic transactions with other nations and vice versa has been fragile and sour. Its trade account is replete with a wide gap that refuses to give up or narrow despite the measures to promote exports and economise on imports. For instance in 2012, the trade gap amounting to $ 9.3 billion was only marginally less than the earnings from exports of $ 9.7 billion, where exports had recorded a decline of 7 per cent in that year compared with the previous year. Though the authorities have been jubilant about the narrowing of the trade deficit marginally in 2012-again from $ 9.7 billion in 2011 to $ 9.3. billion-this trade deficit is still whopping 14 per cent of the estimated GDP of the country for that year. The money needed to pay for the higher import bill than export earnings has to be earned by selling more services, receiving more incomes from foreigners and having more remittances from Sri Lankans working abroad. But the gap in the trade account is so high that these sources have not been able to provide adequate funds to fill it. For instance, the country makes a comfortable earning by selling services to foreigners. But the payment of interest on foreign loans and dividends on foreign investments has reduced that earning’s power to alleviate the harmful effects of the high trade gap. Hence, it is left to Sri Lankans working abroad to send remittances abundantly to finance a good part of the trade deficit. The unfinanced gap still gaping at the country after all these transactions have been recorded, known as current account deficit, has to be financed by borrowing money from abroad and getting foreigners to invest in the country’s share market and businesses. But that makes the country pay more interest payments and bigger dividends in subsequent years making the current transactions still more fragile and sour.

To fix the external sector, look for promoting services

Thus, the solution lies in going for a structural change in the economy that requires massive reforms in the export sector, public enterprises, state expenditure patterns and ease of doing business by private entrepreneurs. This writer in a number of previous My Views had highlighted the reform programme needed by the country as a matter of utmost priority and urgency. But economic reforms that would pay dividends to Sri Lanka by ensuring the future viability of the economy have been pushed aside and the authorities appear to be concerning themselves only with the day to day economic issues. Hence, with no such reform agenda forthcoming, the external sector is getting worse and worse year after year. In these circumstances, one may have to look for other avenues of strengthening the external sector and those avenues involve promoting new business opportunities in the services sector of the country.

This is where Handagama’s Sri Lankan Oscar proposal comes in handy.

Handagama Style: Institutionalise our own Oscars

Handagama has come up with an unconventional blueprint for developing Sri Lanka’s movie industry not for national consumption alone but for meeting the demand in the global markets, a suggestion which a critic may label as “the globalisation of Sri Lanka’s national film industry”. He suggested that Colombo should start having an international film festival on the lines of the Busan International Film Festival in South Korea which was started in 1995. With the proposed Colombo Port City Development Project now in progress, it is not difficult for Colombo, according to Handagama, to emerge as a centre of global film industry because the required aesthetic infrastructure would be added to the city’s old line making it a brand new Colombo of cleanliness and modern beauty. Thus, his suggestion amounts to asking aloud “Why not have our own Oscar Awards and institutionalise them for repeat performance for the benefit of the economy as well as the industry?”

“The rebirth” of Handagama murdered by his own fellow citizens

Handagama, as an independent artiste, tried to take Sri Lanka’s dying movie industry to the global market by creating movies on unconventional themes. His “Thani Thatuwen Piyambanna” (Flying with one Wing) and Aksharaya (The Letter) were not exactly palatable to the traditional Sinhala Buddhist cultural segments and he met with more opposition to his films than support from his fellow citizens. His Me Mage Sandai (This is my Moon) was a portrayal of another man living inside a heroic soldier, a theme which would not have been touched by any other artiste who cares about his safety. Instead of valuing his movies on their artistic quality and ability to take Sri Lanka’s movie industry to the globe, he was sternly censured by ‘the traditional cultural police’ who considered him as a threat, a destructive force and an outsider. This last categorisation is true for Handagama because he is truly ‘an outsider’ to the conventional Sri Lankan society for his contrary views on almost every issue in hand. While for his previous movies he met with only scathing criticisms, for Aksharaya, the fate delivered to him by his home country was different.  He created a world class movie, but escaped a jail sentence only very narrowly for a crime he had not committed. The nation broke Handagama’s backbone by terrorising him and subjecting him to mental torture and fear but at the same time lost a golden opportunity to take Sri Lanka’s movie industry to the globe. These disappointing experiences may have taught him that trying to create a global movie industry in Sri Lanka alone is a near impossibility. In this background, Handagama’s rebirth with a business proposition to realise his cherished dream merits serious consideration by all in view of the harsh external sector situation the country is facing now.

Entertainment is the final consumption bundle of everyone

The global entertainment industry is one of the largest industries in the world, because it constitutes the final consumption bundle of an individual. After consuming every other good or service, a person turns to entertainment for the final release of his stress. According to estimates made by Lucintel, a global market research and management consulting firm, the current market value of the global entertainment industry standing at $ 1 trillion is to rise to $ 1.3 trillion by year 2015. The current size of the global movie industry has been estimated by other analysts at around $ 180 billion. Hence, it is a big profit opportunity which a country cannot afford to overlook. In the case of Sri Lanka which has exports of even less than $ 10 billion per annum, the market opportunity is enormously large. Having realised this market opportunity, the Singaporean authorities had advised all their higher learning institutions in 1999 that in the new millennium, one of the areas in which they should concentrate themselves in providing study courses should be entertainment. Prior to that, by mid 1990s, South Korea jumped the bandwagon by institutionalising the movie industry as a global venture in their economic system. Sri Lanka is too late to notice this trend but since the industry is to grow at a comfortable 5 per cent on an annual basis over the next five years, there is still profit opportunity available to a new comer.

NFC: Society trading creativity for red-tape

In his public lecture, Handagama had taken his audience through the history of Sri Lanka’s movie industry. During the first two and a half decades since the production of the first Sinhala movie, Kadawunu Poronduwa (The Broken Promise) in 1947, it was the South Indian Tamil movies which had dominated the cinemas in the country. To appease the rising agitations by the country’s movie producers for correction of this imbalance, the State Film Corporation had been set up by the government in 1972. Handagama says that it dawned a new era of professional film making in Sri Lanka, but in actual practice what happened was the imposition of a government bureaucracy over the film industry by replacing creativity with red-tape. There were complaints by movie producers about the high handed manner in which the corporation officials had treated them, numerous favouratisms extended to some selected people connected to the political powers and the failure of the corporation to upgrade the technical infrastructure necessary to produce quality movies. A case in point is the absence of quality colour movie studios to process movies that could go to the international markets. Even today, film producers eyeing the global markets have to shuttle between Chennai and Colombo frequently to have their movies processed by such quality studios. So, it was a case of the government taking over responsibility but failing to come up with a strategy or a viable business plan to deliver what was needed by the country’s movie industry.

TV delivers the death knell to the movie industry

With the advent of television in early 1980s in the style of a direct competitor to cinema halls, the entertainment preferences of the Sri Lankan population were changed substantially to the disadvantage of the movie industry. The escalation of the terrorist activities in late 1980s and 1990s kept Sri Lankans imprisoned in their homes leaving them with no choice but to patronise the television as the main mode of entertainment. This delivered a death knell on the movie industry, according to Handagama. But the agitating movie industry personnel or the government policy planners failed to appreciate the need for restructuring the entire industry to cater to a different category of consumers, namely, those who live outside the borders of the country. In other words, while South Korea was successful in globalising the movie industry, Sri Lanka even failed to notice its need. The country tried to rescue the dying movie industry by resorting to addressing individual issues which were simply patchwork done to maintain the status quo. So, by early years in the new millennium, it was completely a dead man.

The dead cinema industry’s rebirth through global markets

Handagama sees the virtues of being dead. Quoting Salman Rushdie’s Satanic Verses, Handagama says that to be reborn, one should die first, for a living man cannot have a rebirth. So, it is an opportunity which Sri Lanka should exploit rather than a cause for lamenting. How should Sri Lanka do that? Handagama suggests two methods. One is the globalisation of the country’s movie industry by producing movies for global consumption. The other is the development of ‘entertainment tourism’ as an integral part of the country’s tourism development plan. As an initial step for globalising the movie industry, he makes the suggestion for the inauguration of Colombo International Film Festival or CIFF at which movies of quality from all over the world will be screened, rated and recognised for awards. This will be Colombo’s Oscar which paves the way for the entertainment tourism as well. When South Korea started its Busan International film Festival, many felt that it would be a dying cause. Today, Busan has become a leading international film centre screening more than 300 movies from 75-100 countries. Catering specifically to young directors, it attracts a youthful audience of about 1.8 million annually. So, Handagama’s message is that start even very small at the beginning and it will grow over time if the country could fertilise its growth appropriately.

Big investments are needed to deliver Sri Lankan Oscars

What Handagama has suggested is a big challenge that requires a coordinated effort by many. There are prerequisites as well as on-time and continuous developments needed. The prerequisites are the physical infrastructure to conduct mass scale festivals including conference halls and screening halls, quality modern studios to process movies, digital infrastructure for producing three dimensional movies of quality and fast and reliable communication systems. The on-time and continuous development are the training of many technicians needed to manage the industry on a large scale. Earlier in his public lecture, Handagama has found fault with the local higher educational institutions for failing to offer courses of study in entertainment. What it means is that when Sri Lanka sets up CIFF, the country’s education system should have capacity to deliver the quality manpower needed by the industry. For that, the higher educational institutions and the system have to plan for it right now. The diploma courses in entertainment could be offered by technical colleges and institutes of technology while the degree programmes could be offered by the universities. Right now, it is mostly self-trained dedicated technical personnel that run the industry. Their services are adequate for producing movies for national consumption. But their talents and skills are not adequate for producing movies for the international markets.

Fund it through Public Private Partnerships

The most pressing obstacle for Handagama’s project is funding. It may not be possible for the government to allocate adequate funding for this purpose, given its current budgetary constraints. Hence, alternative funding sources have to be exploited and Handagama suggests going for Public-Private Partnerships or PPPs where the government provides land and the private entrepreneurs the financial resources. However, PPPs are still at a very primitive and a rudimentary stage in Sri Lanka. There is no effective legal structure to protect the private investments in a PPP project. The Sri Lanka’s government is notorious for changing its stand unnoticed and going back on its words as has been demonstrated by many recent actions of the government. Hence, it is easy to suggest PPPs, but assembling potential investors under a PPP project may not be that easy.

Handagama’s dream need not end up in smokes

Handagama has overlooked another caveat in his Oscar project. Sri Lankan system has been notoriously politicised encompassing all aspects of living including religion. The ugly hands of politicians seeking personal benefit maximisation have been seen everywhere. He says that a proper business model will keep the politics away. But for that to function perfectly, there should be Rule of Law elevated to the highest pedestal possible. When all knowing politicians start defining what a creative work is and who should get these ‘Colombo Oscars’, Handagama will be reduced to where he started his work. But these are beyond Handagama’s control. As John Exter mentioned when he prepared the blueprint of the current central bank, it is the maturity and the experience of the society that will make the new Central Bank a truly professional body that would keep the politics away. John Exter had a dream which did not come true. Handagama’s dream should not end in the same sad experiences of John Exter.

*W.A. Wijewardena could be reached at waw1949@gmail.com