By Lakna Paranawithana
Sri Lanka, the cynosure of South Asia, now has a unique growth plan for one of its bedrock industries, rubber, which has lasted for nearly one-and-a-half centuries. Named Sri Lanka Rubber Master Plan (RMP), it aims at strengthening the industry structure to win global markets for another century or more. Its uniqueness arises due mainly to its comprehensiveness as affirmed by none other than the Prime Minister of Sri Lanka who is well-versed with the complex dynamics related to economic development, in addition to the flawless process adopted in crafting it. Participation, collaboration, meticulousness and perseverance were the corner stones.
The Plan itself has received wide acclaim from industry practitioners, public leaders and academics due to its strategic approach, inclusiveness, coherence and simplicity. It offers a great promise to the industry stakeholders as well as to the nation which assiduously nurtured an industry introduced by colonial rulers in 1876.
Thus, the apt description “National Agenda for Rubber Industry Development” sums up stakeholder expectations and attitude towards the RMP which is now being readied for implementation by the Ministry of Plantation Industries (MPI) with the support of all other stakeholders including those at the highest level of Government.
Planning process
In fact, the planning process was set in motion in 1999, fortuitously, when the rubber industry associations led by the Plastics and Rubber Institute of Sri Lanka agreed with United States Agency for International Development (USAID) to utilize Technical Assistance (TA) to enhance the competitiveness of Sri Lanka’s rubber industry cluster. This initiative created the embryo of the Master Plan by producing “A Competitiveness Strategy for Rubber Industry” which offered solutions for certain value chain issues.
The Sri Lanka Society for Rubber Industry (SRI) took steps to promote some of the projects proposed which include the Monaragala rubber smallholder programme and Sri Lanka Gamma Centre. Some projects such as the “Rubber City” were shelved which has caused opportunity costs. Other projects such as “Lankaprene” failed due to a lack of proactive stance.
A retrospective analysis suggests that mixed results were due to the absence of collaboration, effective consensus building and poor public-private trust in addition to certain governance issues. Further, the programme was mostly supply driven and not well-integrated. This initial experience, however, was proved valuable later.
Nevertheless, issues faced by the industry players grew in complexity. Solutions were needed to arrest a possible overall industry decline. While the manufacturing sector showed growth only in certain segments which is far from ideal, rubber production declined alarmingly that would curtail the growth in manufacturing.
Multiple challenges
To face these multiple challenges related to sustainable competitiveness, industry leaders and senior officials concerned began to feel the need for a more comprehensive action plan. A new intensified approach was certainly required. The peaceful environment in the country which dawned since late 2009 became conducive to long-term action.
In 2010, the Asian Development Bank (ADB) offered limited Technical Assistance (TA) to prepare a business plan for the rubber industry which was gratefully accepted by the Government and SRI. This activity delivered a comprehensive Working Paper which provided valuable insights and became the precursor to the current Master Plan catalysing further demand for a long-term national plan.
Due to stakeholder demand, the Government sought further assistance from ADB, which readily agreed to recommend a more comprehensive, participatory and inclusive approach. Consequently the planning process commenced in early 2012 as an intense participatory exercise transferring the ownership of the plan to the beneficiaries from the outset.
Humongous task
Preparing the RMP was a humongous task which involved an assorted team of renowned specialists, Government officials and industry practitioners. They came from the highest level of respective organizations to the persons from supervisory level. It was essential to create an independent operational platform conducive to collaboration, frank dialogue and innovation.
Four leading members of SRI volunteered to set up the Sri Lanka Rubber Secretariat (SLRS) with excellent facilities which became a unique action centre kept open for long hours, seven days a week. It was manned by a tiny team of professionals assisted by support staff and equipped well.
At the helm of the project management structure was the TA Steering Committee chaired by the Secretary, MPI, and a Technical Working Committee comprising senior industry professionals which provided directions to the team of over ten consultants engaged by the ADB. Inclusive work-groups, addressing issues in different value chain links, worked along with consultants crafting solutions to their own problems.
Numerous meetings, workshops and seminars which culminated in a two-day regional workshop held in March 2013 with over 200 participants enabled the stakeholders to agree on the strategic action framework to be included in the RMP. On this occasion, young professionals in the rubber industry came together to initiate the Rubber Cluster Young Network (RCYN) which comprises future beneficiaries of a well-implemented RMP.
Mutual consultations
The culture prevailed at the SLRS catalysed the emergence of new perspectives, varied insights and diverse views on the industry’s past, present and the future. ADB Consultants as well as invited industry experts proffered valuable advice on various aspects of the industry. The SLRS attracted foreign visitors and global comparisons were made. Academics from universities and policy think tanks too made contributions.
Participants were exposed to new industry information and insights that were not even thought to be in existence. Widely held beliefs about industry performance either became unstable or disregarded as misconceptions. Valid questions outweighed plausible answers. Published data were challenged with sound logic.
New information began to emerge which was more credible. Mutual learning took place, blinkers were removed and more enlightened stakeholders began to realize the need for a new framework approach comprising inter-woven strategies encompassing and integrating the whole rubber value chain if the rubber industry were to be competitive in the context of incessant market forces that were emerging.
Senior government officials voluntarily participated at SLRS activities and the spirit prevailed was that of a true public-private partnership amidst frequent disagreements on various issues. Such disagreements were rarely dysfunctional. However, the most difficult task was the building of consensus among different segments balancing competing business interests.
“Information overload” was inevitable and making strategic choices was not easy. A need arose to make informed choices on behalf of the industry and the nation. A group of senior industry leaders of repute reviewed the work of experts and made unbiased recommendations thus making the choices easy. Finally, based on expert advice and industry practitioners’ recommendations, a small team of editors redacted the final validated version of the RMP which will be launched publicly before mid-2016. It has taken over four years to finalize and validate the first Rubber Master Plan.
Strategy-driven Plan
The RMP is strategy-driven and programme based. Strategic approach is defined in terms of eight core strategies and three strategic initiatives which will be operationalized through ten programmes and 24 projects which are not mutually exclusive. Collectively, these projects once implemented successfully would increase the industry turnover by four-fold in ten years.
Six programmes constitute the core of the Plan and four programs are of supportive nature. All projects are aimed at solving a particular value chain specific problem identified by industry players who face unrelenting and dysfunctional market forces when competing in their respective markets.
Effective implementation and successful closure of projects will enhance their global competitive standing owing to a number of measurable outputs and outcomes such as increased production, reduced costs, enhanced skills and competencies, technological superiority leading to new innovations and an ability to produce and market higher value products, achieving higher productivity levels and transforming the industry to an ecologically and socially responsible sector among other major and minor positive results. This would enable the industry to capture a larger share of the global market for rubber products.
Validation of RMP
Validation of the RMP by both private sector and the Government demonstrates the degree of consensus achieved. Albeit the prolonged efforts taken to accomplish this task, the persevering commitment of the persons actively involved in different ways is praiseworthy. The same level of commitment by stakeholders will make implementation of the RMP relatively easy and a pleasing task. My experience vouches that they are up to the challenge.
The Minister of Plantation Industries and his team of officials are fully supportive of this initiative. To assure inter-agency collaboration in implementing the RMP, a high level Oversight Committee has been nominated. The Government’s recent decision to allocate LKR 100 million for 2016 to initiate RMP implementation has boosted the morale of rubber industry players.
This is the first time in the history of local rubber industry that such a generous allocation is made in support of a comprehensive long-term plan. All previous industry development interventions were either ad hoc attempts or isolated/standalone projects funded by the donor community. There were no attempts based on an integrated approach cross-cutting the whole value chain.
For example, the only major ongoing project in the rubber sector is the Moneragala rubber smallholder project which is funded by the International Fund for Agricultural Development. This again was initiated by the SRI and currently being implemented by the Ministry of Plantation Industries.
It is essential to stress one important point. Very few policy makers and public leaders prefer projects with long-term goals and the reasons are obvious. The question often asked is “what can we do immediately to confront the problem?” without recognizing that observed issues are only the symptoms of outcomes created by unattended systemic problems akin to an iceberg. Removing the tip of the iceberg will never settle the issue in front. It will resurface but in a different shape. Like rubber, problems too are stretching across timescales. Can we design elastic solutions in response?
Industry problems are complex as competitiveness issues are dynamic, especially when an industry is globally linked. Incessant technological innovations across the industry dump the uninitiated by the wayside. A deep and wide analytical approach is needed to understand a problem with clarity facilitating correct strategizing which is a sine qua non. A short-term approach makes complex problems complicated while allowing sweeping of critical issues under the carpet. Industry and its stakeholders suffer permanently as a result.
A good augury
In such a context, the approval of RMP augurs well not only for the rubber sector but also for the national economy. If effectively and speedily implemented, ultimate beneficiaries would be the masses engaged in this resource based globalized industry cluster. Efforts in this regard will keep the private sector fully engaged and open the door for a stream of public-private partnerships where relevant. Role of the Government will be the provision of public goods while creating a fair enabling environment.
As the RMP elaborates, it is not an attempt to “command” the rubber industry’s future path or impose a rigid intervention plan albeit certain specific directions are chosen with intense collaborative consultation. Freedom of the private sector to adopt their distinct market-oriented business strategies will remain intact. In the market, they will compete fiercely. However, the RMP enables them to collaborate in pre-competitive areas for common good. This is known as “co-petition” which Sri Lanka badly needs.
The RMP avoids conflicts between market rules and social-ecological priorities. Instead, it integrates the two objectives mutually supporting each aspect as these two are indissoluble and strengthened by the nation’s culture.
The outcomes mentioned above would ensure public support for the rubber industry catalysing further support which will be translated to policy and resource allocation measures ensuing a self-reinforcing virtuous cycle leading to long-term accelerated growth until the vision is realized.
Grand vision
A wonderful gift of nature, the tree Hevea Brasiliensis came to Sri Lanka in 1876 as an alien species and has changed its landscape, international relations and socio-economic status irreversibly. The British brought the tree and produced raw rubber for export to feed industries in Europe. Today, the Sri Lankan small farmers produce rubber for local industrialists to make products and collectively they have made an indelible mark in the global market.
Current industry stakeholders have a grand vision to see this great industry continue to be of social, economic and ecological relevance even after one-and-a-half centuries, through 2025. That is the unarticulated spiritual goal of the RMP which is an outcome of a unified dream of public leaders and industry players at all levels. It adequately demonstrates that the dream is beautiful, clear and realizable. This realization will become effective if “informed stakeholder collaboration” is continued in its operationalization.
Since the Rubber Asia has become the key rubber industry information provider to the decision and policy makers in the Asian region, I thought of sharing Sri Lankan experiences in developing its rubber master plan and insights gained with our colleagues through this article. I hope there are lessons to be learnt that would improve their own decision and policy processes.
A single positive step forward taken by the Asian rubber industry will ultimately improve the livelihoods of millions of our own vulnerable people. That should be a concerted collective effort and the Rubber Asia is now positioned to catalyse such initiatives.
Lakna Paranawithana is an outstanding professional with wide international experience as a senior management specialist handling rubber industry projects in both Asia and Africa, and advising the Governments on rubber development policy and strategic planning. As an International Consultant, he has served a host of organisations such as United States Agency for International Development, International Fund for Agricultural Development, International Institute of Tropical Agriculture, French Development Agency and Asian Development Bank. Currently he serves as Advisor to Minister of Plantation Industries, Sri Lanka, and Senior Advisor, Sri Lanka Society of Rubber Industry, the apex body of Sri Lankan rubber industry cluster.
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