Realising South Asia’s potential

Saturday, 7 September 2013 00:00 - - {{hitsCtrl.values.hits}}

Following is the speech delivered by Senior Minister for Human Resources D.E.W. Gunasekera at the inauguration of the sixth South Asia Economic Summit on 2 September at the Oak Room, Cinnamon Grand

Ahsan Iqbal Chowdhury, Federal Minister of Planning, Government of Pakistan, Ahmed Saleem, Secretary General of SAARC, Dr. Saman Kelegama, Executive Director of the IPS, distinguished invitees, ladies and gentlemen, it gives me great pleasure to join you as the Chief Guest at this inauguration of the sixth South Asia Economic Summit in Colombo, six years after the first Summit was held in this very city. I understand that the Summit has now become a premier regional forum where experts from South Asia and beyond gather together to address the challenges facing our countries. I am pleased to see many distinguished personalities who are involved in influencing positive socioeconomic changes in South Asia that help realise the full potential of this region. This year’s Summit has as its theme ‘Towards a Stronger, Dynamic and Inclusive South Asia’ and I think this topic is very timely. I firmly believe that South Asian economies hold much promise. But for this to be realised, growth must not only be strong but also inclusive. The inherent dynamism that is there in all our countries – in our people – must be unleashed. Five years since the onset of the global economic meltdown, countries around the world are still reeling from the crisis. Questions are emerging about a ‘new normal’ setting in – a prolonged period of subdued growth in the developed world. But emerging economies in Asia are proving to be centres of economic vitality amidst this gloomy outlook. Sri Lanka’s growth path To our friends joining us from across South Asia, on behalf of the Government of Sri Lanka, let me extend a very warm welcome to our country. Sri Lanka is on an ambitious growth path, following three decades of conflict, division, and war, and we are proud to be hosting many international and regional conferences of this nature and show you what this country is capable of doing in the absence of a war. Sri Lanka has made strong progress on the development front in recent years. We have excelled at achieving the Millennium Development Goals, ahead of many of our peers in the South Asian region and in the wider developing world. Between 2006 and 2010, the poverty rate nearly halved, pulling up around one million people out of poverty. Unemployment has fallen from 5.8% in 2009 to 4.0% in 2012. With a per capita GDP nearing 2,900 US dollars, Sri Lanka has now firmly entered middle-income country status. These achievements are going hand in hand with an ambitious infrastructure investment drive in line with the President Mahinda Rajapaksa’s vision, the ‘Mahinda Chinthana’. In the past year, Sri Lanka commissioned a new international airport at Mattala, a new port in Hambantota and the new Colombo South Port just last month. All these are going to help position Sri Lanka as a leading hub for commerce in the South Asian region. Growing pains Yet, this transition to middle income status brings with it ‘growing pains’. For instance, changes in aspirations of young people on the type of employment they seek. Manufacturing enterprises are facing difficulties finding workers for the ‘factory floor’ type work. The new urban youth have new aspirations. But the shifting of preferences away from ‘blue-collar’ work comes with new pressures on the education system to deliver the required skills and training that gear workers to a new knowledge-led economy. So I emphasise once again, that for a country like Sri Lanka, and indeed others in this region, focusing on policies that fully harness the human resource potential and policies that equip our young people with the skills they need to compete in the global economy on a level-playing field with others in the West, is essential. That is the path to economic justice. Focus on youth I am glad that the organisers have made a concerted effort to bring in more young people in to this Summit, both from Sri Lanka and our neighbouring SAARC countries. The youth of our countries is the biggest asset we have. As the Senior Minister overseeing the area of human resources, I know first-hand how important it is to ensure that our youth are able to actively and productively contribute to socio-economic development. Without this, our countries cannot achieve faster growth, in a way that meets the aspirations of the younger population. Without this, our countries cannot ensure that all people are able to contribute to growth as well as benefit fully from it. Without this, there is a risk of discontent and unrest. Creating jobs that are good, safe, productive, and brings prosperity to all citizens must be the focus of all of our countries. I am very glad to note that one entire plenary session has been devoted to the topic of ‘Harnessing Human Capital Potential in South Asia’. I also noted from the program that there are several parallel sessions dealing with the topics of “youth bulge” and “creating productive employment”. These are important issues to be discussed by experts like you and help governments in our region tackle the challenges better.

Holistic view Apart from this, I am glad that this Summit is taking a very holistic view on economic growth – where issues like climate change, food security, gender disparities, urbanisation – are all coming under the spotlight. These are all issues that are common to all of our countries, and we must learn from each other on how to best tackle them. Especially challenges like climate change must be tackled with collective action and need a collective response. I am also very glad that the topic of ‘mobilising finances to address disparities’ is being discussed at this Summit. Talking about the various human development challenges cannot be done without thinking about how to finance them. Taxation Taxation is an important part of this discussion. I started my public service career in the Inland Revenue Department and this topic is very close to my heart. Sri Lanka’s tax collection is low relative to its GDP and also compared to its peers. This is an important issue for us, especially at a time when concessional donor aid is declining, as we move in to middle-income status. Putting the public finances of a government is essential for both macroeconomic stability but also to expand the fiscal space that a government has to undertake investments to improve welfare, connectivity and competitiveness. As the Chair of the Committee on Public Enterprises (COPE) in Parliament, I have been pushing this agenda strongly – focusing on where the state machinery is losing valuable tax revenue due to various inefficiencies. The reports issued by this Committee are comprehensive and influential and are bringing in a new consciousness in people’s minds on how public enterprises are managed. Regional cooperation All of what I’ve said today are issues that are common to all our countries. South Asian nations must work closer together to address them. Sri Lanka is committed to strengthening SAARC and to expanding our economic and social linkages with all of the countries in the region.

We share strong roots in language, culture, and values. It is not just our economies that must be stronger – but also the ties that bind us. Unlike regions like ASEAN, our region has made very slow progress on regional cooperation. SAARC was established over 28 years ago, but progress on some substantive issues like trade and connectivity has been slow. Dr. Kelegama mentioned in his address that the South Asia Economic Summit is a Track 2 activity. I know that there are many bodies in the SAARC Track 2 at the civil society, private sector, and academic level that do some thinking on South Asian issues although they are not formally linked to SAARC. There is also a strong desire among SAARC professionals to come together. But the problem is that although these institutions and organisations have promoted a dialogue on closer economic cooperation and regional integration, and have been quite active, their overall impact on the SAARC process has not been very significant. Basically the dialogue between the Track 2 activities and Track 1 activities have been either informal, ad hoc or at a very personalised nature. In this context, I see the South Asia Economic Summits as a key Track 2 activity that could influence the SAARC process. It is a Summit that promotes a tripartite dialogue among business, academia and government officials, which we do not find much in other Track 2 activities. So, the South Asia Economic Summit is an excellent forum to discuss ideas and feed into the SAARC process and expedite closer economic cooperation and regional integration. Institute of Policy Studies In concluding I want to congratulate the Institute of Policy Studies of Sri Lanka for their leadership in organising this year’s South Asia Economic Summit with the regional co-partners. The IPS has always been at the forefront of Sri Lanka’s socio-economic policy landscape, with its independent research and credible insights. I know that many of my colleagues in the Government draw on IPS expertise at various points in policy formulation. In my own efforts at introducing the National Policy on Human Resources and Employment, IPS economists played a strong contributory role. Once again, I would like to welcome all of our friends from around the world who are gathered here for this Summit. I wish you all a pleasant stay in Sri Lanka. And I wish all of the participants a very productive Summit and a good three days of deliberations. Thank you.