PM Wickremesinghe’s leadership towards economic development

International Enterprise Singapore signed the memorandum of understanding with Sri Lanka on Monday (18July) 

Singapore and Sri Lanka started work on a Free Trade Agreement (FTA) and agreed to deepen collaboration on multiple fronts, from urban planning to the training of public officials.

A number of agreements were signed by officials from both Governments of Singapore and Sri Lanka as part of an official visit to Singapore by Prime Minister Ranil Wickremesinghe.

The headline agreement to start work on a free-trade deal was signed at the Istana by S. Iswaran, Minister for Trade and Industry (Industry), and Minister of Development Strategies and International Trade Malik Samarawickrama.

Prime Minister Lee Hsien Loong said in his toast during lunch: “When we complete the FTA, it will be a boost for companies and investors from both sides. I am optimistic that with strong political backing, our negotiations will be concluded quickly.”

Prime Minister Wickremesinghe added: “There is tremendous scope for us to work together in a win-win situation, because the next centre of growth is going to be the Indian Ocean region.”

Singapore has already been running workshops for Sri Lankan urban planners on topics such as master planning and urban greening.

Trade agency IE Singapore signed an agreement that will see it collaborating with Sri Lanka on catalysing growth and connectivity in the country’s planned Megapolis, which aims to merge capital Colombo with major cities in its Western Province to form a single economic zone.

International Enterprise (IE) Singapore signed a memorandum of understanding (MOU) with Sri Lanka on Monday (18) to collaborate in the development of the country’s Western Region Megapolis.

This is the first MOU between Sri Lanka and a Singapore Government agency, paving the way for stronger bilateral investment and economic partnerships, said IE Singapore.

Tan Soon Kim, Assistant Chief Executive Officer of IE Singapore, and Nihal Rupasinghe, Secretary to the Ministry of Megapolis and Western Development (MoMWD) of Sri Lanka, signed the MOU at the Istana. The signing was witnessed by Prime Minister Lee Hsien Loong and Sri Lanka’s Prime Minister Ranil Wickremesinghe.

Sri Lanka’s Western Region is home to 5.8 million people or 29% of the population. The region is the main driver of Sri Lanka’s economy, contributing 40% of its total gross domestic product in 2014. The Sri Lankan Government aims to triple the region’s per capita income to $ 12,000 (S$ 16,200) by 2020, targeting an average annual growth rate of 7-8% over the next four years.

The Western Region Megapolis is a flagship development which currently comprises 142 projects estimated at $ 40 billion over the next 15 years.

Said Tan: “Given its accelerated growth, the Western Region Megapolis is a good first stop for Singapore companies to consider when doing business in Sri Lanka. The MOU signed between IE Singapore and MoMWD creates a platform for Singapore and Sri Lankan companies to partner each other in the urban solutions and connectivity sectors.”

Singapore companies can look forward to opportunities in urban solutions and connectivity, said IE Singapore. These include:

nMaster planning, urban design and investments in industrial and tourism development zones;

nPort-related development, and logistics services and infrastructure to build its Aero-Maritime Trade Hub;

nTechnology collaboration for Smart City infrastructure;

nDevelopment of the central business district of Colombo, such as the restoration of heritage buildings and transport infrastructure.

Singapore is also working with Sri Lanka on skills development and training. The Civil Service College will train two batches of Sri Lankan officials in public administration and governance, while the Institute of Technical Education will train senior officials in the field of technical and vocational education, with the first workshop commencing next month.

Both countries also agreed yesterday to increase “cultural cooperation”, which could see Singapore’s museums hosting exhibitions and artifacts from Sri Lanka.

Last year, Singapore’s exports to Sri Lanka totalled $1.9 billion, while imports from Sri Lanka to Singapore reached $146 million.

The main imports from Sri Lanka include petroleum oils, precious and semi-precious stones, and tea. Last year, Singapore imported $4.9 million worth of live crabs from Sri Lanka, up from $4.3 million in 2014.

Sri Lanka is moving at rapid pace paving way for economic development with the leadership of Prime Minister Ranil Wickremesinghe’s programmes and strategies including industry targeting, commercial and industrial development and competition benchmarking roads, airports, marine ports, railroad facilities and public transportation, lighting up the way are energy programmes and projects – including renewable energy generation and distribution facilities, and energy efficiency programmes, road development, highways, ports, increase in the arrival of tourists, the beginning of the acceptance by Western countries and stability of Government which attracts foreign investments are all triggered to enhance the standards of living. Sri Lanka is on the track of economics for development.

Economics for development

Economic growth signifies the increase in per capita income or increase in GNP. In present times, the term economic growth refers to sustained increase in a country’s output of goods and services, or more precisely product per capita. Output is generally measured in terms of GNP. 

The term economic development is far more comprehensive. It implies progressive changes in the socio-economic structure of a country. Hence, compared to the objective of development, economic growth is at rapid pace. By a larger mobilisation of resources and raising their productivity, output level can be raised. 

The process of development is far more extensive. Apart from a rise in output, it involves changes in composition of output, shift in the allocation of productive resources, and elimination or reduction of poverty, inequalities and unemployment.

Economic development concepts

As a concept, economic development can be seen as a complex multi-dimensional concept involving improvements in human well-being. Producing more life sustaining necessities such as food shelter and health care and broadening their distribution, raising standards of living and individual self-esteem, expanding economic and social choice and reducing fear. 

The UN has developed a widely-accepted set of indices to measure development against a mix of composite indicators: UN’s Human Development Index (HDI) measures a country’s average achievements in three basic dimensions of human development: life expectancy, educational attainment and adjusted real income ($PPP per person).

Economic  development

Economic development is a branch of economics that deals with the study of macroeconomic causes of long term economic growth, and microeconomics; the incentive issues of individual households and firms, especially in developing countries.

PM Lee and PM Wickremesinghe toasting each other at the Istana with Foreign Minister Vivian Balakrishnan looking on. PM Lee said that when the Singapore-Sri Lanka Free Trade Agreement is completed, it will be a boost for companies and investors from both sides

Social aspects of economic development

The Government has set a long term goal of growing the economy to deliver greater prosperity, security, and opportunities to all Sri Lankans. Prime Minister Ranil Wickremesinghe’s team contributes to this goal by delivering high-quality business services; supporting the development of business capability; assisting innovative and productive firms to thrive; helping to create a growth-friendly environment with low regulatory and business costs; and promoting investment in infrastructure. The way we must support the Government’s goal is summarised in our six long-term outcomes:

nEnterprising and innovative businesses, improving the drivers for success and productivity improvement in firms.

nInternational linkages ; improving the linkages that allow Sri Lankan firms to benefit from trade and the flows of investment, skills, and technology.

nDynamic and trusted markets; improving the competitiveness, integrity, and effectiveness of markets.

nEase of doing business; improving the way public agencies and the regulatory environment interact with business.

nEfficient, reliable, and responsive infrastructure services; improving the quality and reliability of key infrastructure services that support growth.

Sustainable development

Sustainable development is maintaining a delicate balance between the human need to improve lifestyles and feeling of well-being on one hand, and on the other, preserving natural resources and ecosystems, on which we and future generations depend. Sustainable development is a pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come. 

The term was used by the Brundtland Commission which coined what has become the most often-quoted definition of sustainable development as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.”

A representation of sustainability showing how both economy and society are constrained by environmental limits. Scheme of sustainable development: at the confluence of three constituent parts.

The concept has included notions of weak sustainability, strong sustainability and deep ecology. Sustainable development does not focus solely on environmental issues.

In 1987, the United Nations released the Brundtland Report, which defines sustainable development as ‘development which meets the needs of the present without compromising the ability of future generations to meet their own needs.’ Solar towers utilise the natural resource of the sun, and are a renewable energy source. 

Green development is generally differentiated from sustainable development in that Green development prioritises what its proponents consider to be environmental sustainability over economic and cultural considerations. Proponents of Sustainable Development argue that it provides a context in which to improve overall sustainability where cutting edge Green development is unattainable.

The United Nations Division for Sustainable Development lists the following areas as coming within the scope of sustainable development: Sustainable development is an eclectic concept, as a wide array of views fall under its umbrella.

A country’s economic development is related to its human development, which encompasses, among other things, health and education. A closely related idea is the difference between extensive and intensive economic growth. Extensive growth refers to the increase of overall wealth, while intensive growth refers to the increase of per capita wealth. Unlike extensive growth, intensive growth is mainly driven by productivity growth and technological progress.

Prime Minister’s vision and reflections

PM Ranil Wickremesinghe on his visit to Japan last year recalled that the last speech made by the First Prime Minister of independent Sri Lanka, D.S. Senanayake was on the Japanese Peace Treaty. Speaking on 29 February 1952, he said: “We can congratulate ourselves on being a party to this Peace Treaty. This is the first opportunity that Japan is getting to establish herself. We should not harbour anger and try to keep the Japanese people down.”

As a part of this strategy, D.S. sent J.R. Jayewardene, the Minister of Finance to lead our delegation to the San Francisco Peace Conference. When I entered politics, I remember J.R. Jayewardene telling us of the conditions of the war ravaged Japan when he stayed at the Imperial Hotel on his way to San Francisco. On this occasion he also had the opportunity to meet with Prime Minister Yoshida. This is why he took a strong stand on the Peace Treaty when others in Asia were undecided or hesitant. 

Commending J.R. Jayewardene in Parliament for this speech, D.S. Senanayake described him as “our representative with a backbone, who made it clear that we were not going to yield to the game played by the Soviet Union”.

During this phase, Japan-Sri Lanka relations were both emerging from World War II as we re-established our independence. Twenty-five years later, in 1977, J.R. Jayewardene himself became the Prime Minister of Sri Lanka and the following year he became the first Executive President of the country. By then Japan had become Asia’s economic miracle. During his tenure of office, relations between our countries became closer and stronger.

“I was his first Deputy Minister of Foreign Affairs in 1977. One of the first foreign envoys sent to meet us was your Vice Minister representing the Prime Minister at the time, Mr. Fukuda. At that time, Mr. Jayewardene, being highly taken with the Fukuda Doctrine, sought the support of the Japanese Government to establish a market economy and to implement a massive development programme in Sri Lanka. Friendship between the two countries led to this much needed support. And we must remember with gratitude the gift of a hospital with 1,001 beds by the Japanese Government to the new capital Sri Jayewardenapura.

“One of the members of the Japanese Government who was involved at the initial stage in developing of economic relations between the two countries was the Minister of International Trade and Industries – Mr. Shinatro Abe, the father of the present Prime Minister. I must also mention the support given by the Prime Minister Nakasone and Foreign Minister Abe when Sri Lanka faced with communal unrest, terrorism and the ethnic conflict from 1983 onwards. I myself had the opportunity of coming here as the representative of President Premadasa to seek the assistance of your Government when we were the unfortunate, indirect victims of the invasion of Kuwait by Iraq and the resultant economic crisis. Prime Minister Kaifu was generous in his response.

“When I became the Minister of Industries, Science and Technology, I sought the advice of Mr Saburo Okita. Then, when I became the Prime Minister in 2001, I was given the mandate by our people to engage in Peace Talks with the Tamil Tigers. And I must mention again, with appreciation, the help given by Prime Minister Koizumi in hosting the donor conference for Sri Lanka in Tokyo and for being a Co-Chairman of the Peace Process. Today, the world order has seen far reaching transformations – politically, economically and technologically, especially since the time of President J.R. Jayewardene and Prime Minister Nakasone. Therefore it is imperative that these changes are reflected in the future direction of the relationship between our two countries – in particular, the new Japanese ODA Charter 2015. My visit to Japan is primarily to discuss the Declaration of the Comprehensive Partnership between our two countries. I believe this will be a framework for collaboration in the following spheres: The political, the economic, the technological, the cultural, and security.”

Successful leadership

The Comprehensive Partnership will delineate our cooperation in these important areas. Today, democratic norms including that of good governance, transparency, the rule of law and the rule of justice are being entrenched in the country. On 1 October 2015, the United Nations Human Rights Council’s Resolution on Promoting Reconciliation, Accountability and Human Rights in Sri Lanka commended the new Government for the initiatives already taken. This Government consists of the United National Party and the Sri Lanka Freedom Party – the two largest political parties in Sri Lanka. Traditionally rivals, they entered into a Grand Coalition similar to what prevails in Germany … beginning a new era in political collaboration.

“Our political goals include a new Constitution, the consolidation of human rights and the strengthening of democratic institutions. But what is most important to us is to incorporate a political settlement to the outstanding issues relating to national unity, ethnicity and religion. We have already started informal discussions with the Tamil National Alliance and other parties on a political solution. The language and ethnicity issues, which dominated the country over five decades, and religious discord that were stirred up during the last decade, must be resolved if a strong Sri Lankan identity – based on equality – is to be established. Only this will bring about an inclusive settlement acceptable to all communities. 

“We also look forward to Japan contributing to national reconciliation and peace building in Sri Lanka. Once again we are seeking Japanese assistance to summon a meeting of donors to assist in the reconstruction and in revitalising the socio economy of the conflict-affected areas. With women being a majority in our population, the Women’s Rights law will incorporate the UN principles on the Elimination of all forms of Discrimination against Women.

“Currently, all elected women representatives in the country are less than 5% of the total number of political representatives. Therefore another law will provide reservations for 25% women representatives in Municipalities and Provincial Councils. The Parliament will give effect to recommendations of the Task Force on Sexual and Gender based Violence. We are also in the process of establishing a national centre for women headed households – with its headquarters in the North of the country. The Government gives priority to protecting the environment since we are all in agreement to safeguard the rich bio-diversity in Sri Lanka. Tackling climate change will receive priority under this policy. The Parliament will also establish, by law, a Sustainable Development Council to enact the Sustainable Development Goals.”

“The 19th Amendment to the Constitution limited the powers of the Executive Presidency. We are now discussing measures to strengthen Parliament. This will include the introduction of oversight committees, similar to the National Diet, the US Congress and the EU Parliament. There will also be a Parliamentary Budget Office. The Mandate of the J.R. Jayewardene Centre will be expanded to include research and training for Parliamentarians thereby forming a backup office to Parliament and core political training on the enactment of legislation, parliamentary conventions and procedures, ethics and good practice for new legislators.”

Reconciliation and accountability

“The Tamil National Alliance, now the third largest party holds the leadership of the Opposition, while the JVP, the People’s Liberation Front, has the office of Chief Opposition Whip. Therefore the main parties hold Office in either the Government or in Parliament, resulting in the Parliament becoming the national forum. We will also televise Parliamentary proceedings. We will, thereby, attempt to build on the Buddha’s advice to the Lichchavi Republican Assemblies in the Ganges, “to meet in harmony, to discuss in harmony and depart in harmony.”

“Let me now say a few words on the recent developments in regard to a national machinery for reconciliation and accountability. In this, we will be guided by the same words of the Buddha that J.R. Jayewardene quoted in San Francisco: ‘Hatred ceases only by love’. Therefore, we are discussing with South Africa, the architecture of a new structure for a truth machinery. This will include, first, a Truth Commission to record the instances of violence and violations. Second, we will establish an innovative new mechanism – a Compassionate Council – headed by the leading clergy of all the religions – Buddhist, Christian, Hindu and Muslim. They will give us advice on the measures to be taken on individual cases. Finally, we will be devising a new judicial structure to inquire into the violation of human rights.

“The Government is planning to carry out the next generation of economic reforms to make Sri Lanka a highly competitive economy – we are aiming to be the most competitive in South Asia – on par with South East Asia. The Ministry of Development Strategy and International Trade will coordinate all investments and economic relations. The barriers to Direct Foreign Investments including the bottleneck and delays to doing business will be removed. There will also be reforms in the Financial and Monetary sectors and a more stringent control of the Budgets.

“We have created a new Ministry for Telecommunication and Digital Infrastructure. Sri Lanka will also strengthen its social sector programme especially Universal access to Education and Health by increasing the budgetary allocations to both these sectors. Finally, a new set of laws will be put in place to combat corruption and financial crimes. Since time immemorial Sri Lanka has been at the heart of Indian Ocean trade, and more precisely in the Bay of Bengal. We will continue this tradition by entering into an Indo-Lanka Economic and Technology Collaboration partnership, Free Trade Agreements with Pakistan, Bangladesh and the ASEAN nations bordering the Bay of Bengal – Myanmar, Thailand, Malaysia, Singapore and Indonesia.

“We are preparing ourselves for an Asia Pacific based on the Trans Pacific Partnership. Sri Lanka will also negotiate with the EU for GSP+ concessions and with China for a Free Trade Agreement. Today the global economy is still recovering from the 2008 financial crisis. I believe that two major economic developments will determine the fate of medium term global growth. First – the normalisation of the US monetary policy. The second is China’s slow transformation to an economy relying on consumption, which will lead to slower and sustainable growth in China. In this background, the Managing Director of IMF, Christine Lagarde has described the medium term growth prospects as ‘the new mediocre’. I am advocating that we, in South Asia, respond to this predicted low growth scenario – by creating a high growth South Asia region.

“The economies of UK and US are performing well while the EU and Japan are on the way to full recovery. India is expected to sustain its growth. The new national Government in Sri Lanka is providing stability for economic restructuring which is expected to lead to a high rate of growth. However Japanese participation in South Asian Economic Development will add momentum to enable higher growth rates in South Asia. This requires multiple options to be pursued – including Japanese connectivity to India through Sri Lanka. “Let me reiterate, we will look to Japan to take the lead in the economic transformation of Sri Lanka and South East Asia. To create a South Asian High Growth Area enabling the region to fulfil its economic potential and bring higher living standards to its people. This will also have a positive impact on the medium term global economic growth. It is in this context that we are discussing a new collaboration partnership with Japan. Sri Lanka is willing to make the start on this new journey, which will also offer many new opportunities for Japanese investors. The proposed collaboration, as I stated before, also aims to utilise Japanese science and technology, to overcome the economic challenges to development. This requires multiple approaches to utilise Japan’s experience, namely,

1.Collaboration between existing institutions

2.Building centres of excellence in science and technology innovation

3.Strengthening of science and technology education and the establishment of an institute of technology with a Japanese ethos.

4.Assistance to strengthen human security and to counter climate change.

“Finally, I would like to invite direct Japanese private investments in all sectors and we will put in place the appropriate environment for this. We also hope to improve bilateral trading and enhance inter-personal relations by attracting Japanese tourists. The proposed collaborations will be parallel to the existing infrastructure development programmes and the financial assistance programmes aiming to create synergies and a strategic platform for Japan’s activities in Sri Lanka and the South Asian region.

I further propose that this economic collaboration be buttressed by political collaboration, which will further strengthen the ties between our two countries. I believe that we have a common interest in maritime security and oceanic issues especially in regard to the Indian Ocean: The reduction of tension in Asia, the maintenance of free, open and stable seas – based on the Rule of Law, Improved maritime connectivity, and Reforms to the UN Security Council. In conclusion, I wish to take this opportunity to record the gratitude and appreciation of the Government, the peoples of Sri Lanka and of myself to the Government and the peoples of Japan – for the cooperation and assistance extended to Sri Lanka, in a myriad of ways, over the past decades. Further, being afforded the opportunity to address the members of the National Diet of Japan is deeply valued and appreciated by my delegation and by myself. I will be failing in my duty if I do not mention the role played by Mr. Koji Omi who ensured that this visit was a success.

“May I also add that over the last several decades the Government and the peoples of Japan have been exceptionally and remarkably generous in extending assistance and cooperation towards the advancement of the developing and less developed nations in the world (including Sri Lanka). By being so benevolent, the happiness, comfort and the well-being of the peoples of Japan will surely never decrease.”

Sri Lanka Economic Forum

Prime Minister Ranil Wickremesinghe expressed that Sri Lanka will be developed into a global city that will go between Dubai and Singapore where international trade and movement is concerned Speaking at the Sri Lanka Economic Forum 2016 in Colombo, Prime Minister Ranil Wickremesinghe said the time had come to make plans to fulfil this objective. “Our objective is to make Sri Lanka the most competitive nation in the Indian Ocean and to develop the island as a mega city for the region that will go between Singapore and Dubai thus make it competitive and the time has come for us to think how we are going to do it. Sri Lanka is the first nation in South Asia to embrace open economy, first in Asia to go for free education and one of the first nations in the region to enjoy universal franchise. We can’t continue as a low income country and should decide how we could go ahead.” He indicated that Sri Lanka would have to take stock of the global economic situation and its own shortcomings and opportunities and would convert the economy into a manufacturing based one. Further he said the country will have to look at agriculture and modernise the sector. “Sri Lanka did focus on agriculture in the past when it launched the Mahaweli Development but unfortunately it was not possible to go forward from there.” It is time to revive these.