Asian countries including Sri Lanka, India , Bangladesh, and Nepal have been directed to maintain high growth and job creation and take further strides in reducing poverty, Asian policy makers declared at the 3-day conference on “Advancing Asia: Investing of the Future in New Delhi”, India recently. Sri Lanka should focus on improving the balance of [...]

The Sunday Times Sri Lanka

IMF New Delhi conference prods on Asia including Sri Lanka towards high growth


Dignitaries at the IMF Delhi meeting.

Asian countries including Sri Lanka, India , Bangladesh, and Nepal have been directed to maintain high growth and job creation and take further strides in reducing poverty, Asian policy makers declared at the 3-day conference on “Advancing Asia: Investing of the Future in New Delhi”, India recently. Sri Lanka should focus on improving the balance of trade by taking advantage of bilateral trade pacts with countries in the Asian region especially with India shedding its negative attitude taking a cue from the IMF New Delhi Conference, eminent Economist Dr. Saman Kelegama told Business Times on the sidelines of the conference at the Taj Palace hotel.

The IMF support programme is helping rebuild confidence in Sri Lanka’s economy as it recovers from conflict and paves the way for donor assistance in its reconstruction and reconciliation efforts, he added. The IMF assistance this year will enhance dwindling foreign reserves and help tackling the current balance of payment (BOP) and trade deficit problem.

IMF team due

 A team of IMF economists (Article IV end negotiating team) will visit Sri Lanka shortly for a financial review on 2016 fiscal accounts in determining the status of unpaid claims, contingent liabilities and other information related to appropriation and spending in that year.

The government should take immediate action to revive the economy, which has been pounded by low productivity and high debt; he said adding that the country should focus on core macroeconomic issues on priority basis rather than plastering it with short term solutions. A Sri Lankan delegation led by Finance Minister Ravi Karunanayake and comprising Central Bank Governor Arjuna Mahendran, three other senior bank officials, Institute of Policy Studies Executive Director Dr. Saman Kelegama and Ceylon Chamber of Commerce Immediate Past Chairman Suresh Shah were among the participants.

Sri Lankan top officials who attended the conference expressed the belief that the country will be able to sustain growth within the next two years with immediate IMF support facility which is likely to be approved by the IMF Executive Board soon. The March 11-13 conference, held in New Delhi, India, and jointly sponsored by the IMF and the Ministry of Finance of India, brought together over 400 delegates from 30 countries spanning Asia and the Pacific, and included senior officials, policy makers, prominent academics, opinion leaders, financial sector executives, and civil society representatives to discuss the future of the region.

Historic opportunity for growth
“The region’s dynamism presents an historic opportunity to invest now for the future—and to advance Asia,” said IMF Managing Director Christine Lagarde in opening remarks. “Doing so will not only put Asia on the path to sustained growth, but also strengthen its role in the global economy,” she noted. “Asia is a ray of hope for global economic recovery,” added Indian Prime Minister Narendra Modi. “The 21st century is, and will be, the Asian Century.” Participants at the 3-day conference reviewed the main economic and social challenges facing the region, and looked at ways that economic policy can boost potential output and advance employment growth and social progress more widely.

During the opening session of the conference, the IMF and the Government of India also announced the opening of the South Asia Regional Training and Technical Assistance Centre (SARTTAC) in New Delhi next year. The new centre will offer a fully integrated training and technical assistance centre serving Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka. In announcing the SARTTAC, Prime Minister Modi said: “The Fund has built up an immense stock of economic expertise. All its members should take advantage of this. All of us need to pursue policies that provide a stable macro economy, enhance growth and further inclusion”.

Inequalities need to be tackled
He added, “The Fund can be of great assistance in this. Apart from advice, the IMF can help in building capacity for policy making”.Several measures to tackle inequality in the region were also discussed, including a scheme in the Maldives to concentrate populations across some 180 islands into central areas in order to provide basic services such as health and education. Azeema Adam, Governor of the Central Bank of Maldives, said that her country is suffering from lack of financing for investment in basic infrastructure.

A critical issue against achieving inclusive growth in the region is the lack of access to education, especially basic primary education. “The solution to overcoming poverty is giving everyone the chance to finish at least a basic education,” said Milwida Guevara, CEO of Synergeia Foundation in the Philippines. Fazle Hasan Abed, Founder and Chairperson of BRAC Bank, Bangladesh, noted that access to financial services is an essential element of poverty reduction.

Melinda Gates stresses access to health for women
In her keynote remarks, Melinda Gates, co-Chair of the Bill and Melinda Gates Foundation, stressed the importance of increased access to basic health and financial services, especially for women and girls. Harnessing the potential of women and girls—the region’s greatest natural resource—is the most effective means of securing sustainable, inclusive growth, she said. Participating in the concluding session Central Bank Governor Mr. Mahendran noted that Sri Lanka‘s Micro Finance Institutions (MFIs) are to be regulated with the enactment of new legislations in parliament shortly.

The new law will provide provisions to allow foreign capital to enter in to the micro-finance sector, he said adding that it will pave the way for foreign financing to enter micro-lending. Strengthening the regulatory framework governing the microfinance sector and client protection is also crucial for improving financial inclusion in Sri Lanka. Much scope remains to improve financial inclusion, particularly related to cost and quality of financial services provided, and the sustainability of financial institutions, he added.

Mr. Mahendran said that a larger share of households in Sri Lanka accesses multiple financial institutions for their credit and savings needs. The use of insurance services, ATM facilities, e-payments, and mobile banking, is increasing rapidly, he said. At the concluding sessions of the IMF event, the fund’s chief, Ms Lagarde said countries should continue with unconventional monetary policies if they were accompanied by structural reforms and low inflation. She urged Asian nations to employ growth-friendly monetary and fiscal policies to counter challenges posed by a fragile global economy.

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