The Sri Lankan Government is directly intervening into economic development process in the country which is on the threshold of an economic renaissance with the aim of trickling down benefits of the growth to the rural hinterland.
Prof. G.L. Peiris
Outlining the government role in transforming the economy, Minister of External Affairs Prof. G.L. Peiris told attendees at the Certified Professional Managers (CPM) Annual conference 2010 in Colombo on Monday that the rural masses will be greatly benefited by mega road, port, airport and power projects which are now under construction.
He noted that Sri Lanka today has a promising economic future and the country is on the threshold of an economic renaissance. The IMF approval of the 5th tranche of a $2.5 billion loan was a clear indication of the confidence of international monetary agencies. He added that the overall economic conditions are improving and the economy is likely to show strong growth this year on the back of improved fundamentals and political stability. “Sri Lanka is today, without any exaggeration, one of the world's best destinations for investment," Prof. Peiris said.
He said today it could be seen in the Eastern Province the magnitude of development that could be brought by power sharing with the centre. He said such great change could be brought about to the area after nearly a quarter of a century of misrule, with no election. He called the result of the process a “renaissance of economic activities with state intervention.” Governor of the Central Bank Ajith Nivard Cabraal pointed out that the over-subscription of the global sale of $1 billion in bonds to help repay debt and rebuild the country after the end of three decades of civil war reflected “high global investor confidence based on the recent progress and the future prospects in the Sri Lankan economy since the end of the conflict.” He revealed that the commercial banks lending portfolio will increase from Rs.1.8 billion at present to over Rs. 4 billion in the next five years. These banks will take up the role of regional development banks, he said.
Prosperity for few will not be the aim of the government. It has embarked upon an ambitious programme to double the country’s per capita income from the current level of $2,000 to $4,000 in the next five years to achieve the target of prosperity for all. The $42 billion Sri Lankan economy may grow as much as 8 % in 2010, the Central Bank chief said, having previously forecast a 7 % expansion.
Chairman Bank of Ceylon Gamini Wickremasinghe emphasized the need to work towards both the enhancing of financial intermediation as well as the importance to diversify so as to provide many financial products. He noted that the banks should set up special wings for term lending and private equity, as many regional and international funds have expressed interest in Sri Lanka.
Highlighting the importance of fair trade and involving farmers and producers directly in doing his business, Managing Director Cargills (Ceylon) Limited Ranjit Page revealed that the firms’ network of 10,000 growers of fresh produce has been boosted with the addition of 1,600 farmers from Kilinochchi, Mulaitivu and Jaffna areas in the North.
He added that his company maintains close relations with farmers, whom they had verbal forward contracts to buy their produce. All the dealings with farmers were based on mutual trust, he said.