Financial Times

Infrastructure key to development of other sectors
By Nimesha Herath
Without proper infrastructure, no country can develop.
That sums up a presentation on the role of infrastructure made by Johanna Boestel, Programme Economist at the Colombo office of the Asian Development Bank at one of the sessions of last week's Economic Summit organized by the Ceylon Chamber of Commerce (CCC).

During a discussion on the importance of sector contributions towards economic growth and development, a panel of experts representing IT, Financial Services, Tourism and Hospitality spoke on the significance of their sectors on the country. However the importance of infrastructure came out very strongly and raised questions like would any of the above sectors develop if Sri Lanka had bad roads, poor transportation, unskilled workforce, bad communications and so on? Boestel said good infrastructure results in underemployed labour having the capacity to migrate to better jobs, better access to health and education systems and being able to reap benefits of liberalized markets. "Infrastructure is the weakest part in the investment climate in Sri Lanka. Businesses lose two percent of sales as a result of this almost every day," she said.

The ADB economist said the government plans to reduce the petroleum subsidy to three billion rupees in 2006 which will free up resources to either build a 50 km national highway that is carpeted or to build an 85 km road without being carpeted.

"Information Technology is one of the developing sectors which have a high impact on peace, equity and in stimulating growth," said Manju Haththotuwa, CEO of the ICT Agency opening up this discussion at the summit. He said ICT needs to grow as a sector and also as an enabler for socio- economic development.

In developing IT, Sri Lanka still faces challenges such as lack of awareness, low level of (IT) literacy, lack of infrastructure, inefficient and inaccessible government services which they need to overcome in order to spread IT in the country.

Nanasala, the village IT centre concept, has extended a helping hand to many individuals to generate money through e-commerce to finance their daily requirements and in developing villages. Hiran Cooray, Managing Director, Jetwing Hotels Ltd explained the vital role played by tourism and hospitality in bringing benefits such as employment, circulation of money, infrastructure development, education and social benefits to the growth of the country.

"In an economic sense, international tourism can bring in much needed foreign exchange to the country and it's important to look at Sri Lanka's tourism from a global prospective."

The financial sector and economic growth are closely inter-linked in any economy. "Both the Sri Lankan economy and the financial sector are still in the developing stages, and there is vast potential for synergies in these sectors," noted Anil Amarasuriya, Chief Executive Officer, Sampath Bank.

He said its contribution to the Gross National Product (GNP) has been growing during the last few decades despite the civil war and in 2004 it was 10 % of the GNP.

Amarasuriya said that though domestic aavings is a prime prerequisite for economic development, Sri Lankans have found it difficult to increase their savings under the current economic situation.

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