A "substantial" increase in the level of Foreign Direct Investment (FDI) that Sri Lanka attracts is a must for the country to meet its target of doubling per capita income in the next five years, according to top economist and President of the Sri Lanka conomic Association (SLEA), Prof. S. Indraratne. He further added that recent FDI draws, amounting to US$ 690 million in 2009 and US$ 200 million in the first half of 2010, proved inadequate so far to reach this lofty goal.
He also suggested that the government's target of 8% to 10% growth would not be enough double per capita income in the stipulated five year timeframe set forth, indicating that this would more likely take ten years at a real rate of 8%. He also revealed that, to double per capita income in five years, a real rate of at least 14% would be essential. Further, the country had to be more efficient with its investment to ensure that every unit of investment would result in appropriate gains, requiring at least a 10% increase in efficiency.Prof. Indraratne's remarks were made at the recently concluded SLEA Annual Sessions, which also featured an address by former Central Bank of Sri Lanka (CBSL) Governor A.S. Jayewardene, who spoke publicly for the first time since leaving the CBSL.
Commenting on the recent string of public investments by the government, Mr. Jayewardene noted a similar situation in 1979 which had later, by necessity, given way to a more moderate approach to public spending. He also noted that the exemption of the "boated public service" income from taxation was something which the country could "ill afford"; adding that the precedent this created by requiring all levels of the public service to pay income tax could help negate some of the impunity by which taxes were evaded in this country.
He also went on in depth to highlight the huge excesses inherent in parliamentary privilege system, from salaries and emoluments to allowances to duty free motor vehicle permits to subsidised meals, etc.