Thursday, October 08, 2009

Random Questions

1. How much does cricket contribute to SL's GDP? There are tidy sums of money from television and advertising rights to player fees to ICC grants that flow in. Support services include coaching and supply of equipment. Its a fairly small but rapidly growing industry. Does anyone care to hazard a guess as to its size or the number it employs?

2. What is driving the demand in the local FMCG sector? Companies are experiencing double-digit volume growth, what drives this? Some people guess that it is a switch from imported products (due to the high duties), some of it is probably due to increased supply to the East. Today I heard a novel explanation: soldiers pay. The government pays the army quite well now and increasing amounts are being sent home to their families in the villages and this is causing a change in consumption patterns. Does anyone have any other explanation and/or harder data?

3. Are the leasing companies the next on the list of financial institutions in trouble? The finance companies, heavily involved in the property trade, have already had their little crisis. With yards full of repossessed vehicles and a collapsing vehicle market are they now tottering?



Dulan said...

Hey JP

Those are some pretty thought provoking questions. Not sure of one or three, but I think the answer to number two should definitely be the higher duties.

Ok, so I don't have any real numbers to back it up, but recent trips to various supermarkets revealed a distinct lack of any imported aftershave... until a serendipitous trip to a random out of the way Keells Super. :)

Serendib_Isle said...

Interesting, to say the least.

I guess cricket takes away far more than what it gives in return to the country. Have no idea how much of cricket related investment/expenditure is reflected on the GDP; but all in all, we are a country that plays day & night matches during power cuts. We don’t even produce a single leather ball or a stump, everything is imported. Television rights are bought by overseas media moguls and they make ten times more than what we receive, and deserve. Majority of the country’s workforce is at standstill during a game... Productivity drops... The list is long, but you get the picture. I’m sure the overall effect must be negative on the GDP, but, then again, who’s counting?

We were looking for Mayonnaise the other day, and it was hard to find. Even at Keells, Food City and Arpico. Weight-watchers, or light mayo is not available at all and the regular mayo is also becoming extinct. Kids’ toothpaste which used to be around 300 rupees is now around 800, and slowly but surely the imports are disappearing – even from the A-grade supermarket shelves. Locally produced goods are catching up, albeit the lack of choice. I guess it is largely due to behavioural-change, almost every little town has a “supermarket” now, be it Cargills or Dinasiri. People opt for Newdale or Lucky yoghurt and forget the little “kiri-kade” around the corner. Consumerism is gobbling up the country, buying branded goods is a status symbol, even in Bintenna. It would be interesting to see the “real” numbers, local research companies are known to come-up with weird data and market findings. According to LMRB, the “Style” magazine enjoyed a top spot in readership even 3 years after it stopped publishing..!!

As for the financial companies in trouble, here’s a simple test: Pretend that you are buying a German Car, brand new from the dealer and check out who is willing to finance or lease your vehicle. Will be a good measure of their health to see who is willing to offer, and how much. ;)

Jack Point said...

Yes Dulan, I've noticed the lack of imported products in supermarkets, which is why I've stopped going to Cargills. Keells has the best selection of imported products, Arpico is way too pricey.

I was going with the import substitution theory myself and that certainly accounts for a part of the shift but could it account for a double digit growth in volumes?

If you are really interested in tracking down import stats and are willing to pay for it, there was a guy called Kaizer Amanullah who ran a company called Data One; they specialise in extracting customs statistics by HS code. If you can get hold of the codes for a few products you should be able to get the import statistics.

Jack Point said...

Thanks Serendib, yes I'd forgotten the the productivity factor. What we need is to get a good young economist looking for a research topic and set them on the trail.

I don't think the import component is in itself too much of an issue, the contribution would be greater if the goods were produced locally but trading is also positive, it keeps the tradesmen and their staff in employment.

I was thinking on the social aspect as well; that cricket has now opened a new path to wealth that was previously closed, rural boys who were not academically inclined can now make a lot of money if they are good cricketers.