Wednesday, 29 January 2014 00:00
The World Bank believes Sri Lanka has to put together streamlined programs for economic development to build on the massive infrastructure put down around the island.
Phillippe Le Houerou, World Bank Vice President for the South Asian Region, who is in town, commended Sri Lanka for its economic and other achievements when he met President Mahinda Rajapaksa. During the discussion, Sri Lanka’s development process and the present and future cooperation between the World Bank and Sri Lanka were predictably highlighted.
Houerou said that after his arrival he had visited the north, the east and several other parts of the country and spoken to Government officials and people of all walks of life. He had described the progress as “highly impressive” and found the post-war progress so far, at least in the infrastructure department, highly acceptable. Houerou specially commended the high quality of roads that have been recently constructed.
Focusing his attention to Sri Lanka’s private sector he said that he had met with many bright people with valuable ideas and concepts. He also appreciated services provided by the Government hospital in Trincomalee which he had visited.
During the discussion President Rajapaksa had insisted that the biggest challenge in his view is attracting foreign investment, which has been slow despite the massive progress on the infrastructure front. Experts have time and again called on the government to halt corruption by strengthening law and order, simplify laws and encourage more private sector involvement. Yet this has been slow in coming for the majority of entrepreneurs.
The infrastructure development moreover comes at a cost, with increasing debt being heaped on the economy. Despite the impressive development and poverty reduction numbers shown by the Government, average people still bemoan the increasing cost of living.
Better management, cutting down on corruption as well as improving governance, reconciliation and human rights remain major challenges for the Government – goals that will not disappear with election wins. The Government with customary éclat is ploughing funds to the Western and Southern Provinces but it is questionable whether this has a greater benefit of the economy.
The port, airport, convention centre and investment zones centering on Hambantota will ensure the Rajapaksa family election wins but it still has to be promoted to the international investment community before it can make a greater contribution to the local economy. Despite these monoliths the Southern Province remains one of the most impoverished areas in the country.
Government spending on basics of healthcare and education remain abysmally low while defence expenditure increases yearly. Recently in Parliament it was revealed that there are as many as 60,000 deserters, showing a deep need to reduce the size of the Army by decommissioning those who no longer want to be part of the forces. It would also result in the armed forces concentrating on security rather than creating a lopsided playing field for the private sector. Programs such as improving 1,000 schools and IT education have fallen by the wayside while more financial accountability in development projects such as ‘Maga Neguma’ and ‘Divi Neguma’ need to be addressed.
Putting the economy on a growth trajectory sans Government involved and loans remains a huge challenge. While exports recovered towards the end of the year they need to be improved consistently for sustainable and inclusive growth. All of these and more need streamlined programs.