The wondrous ‘Wonder of Asia’

By Cheranka Mendis

Answering the much answered question of why Sri Lanka is being tagged as the ‘Wonder of Asia,’ Central Bank Governor Ajith Nivard Cabraal yesterday listed out a number of reasons, starting with the eradication of a war that many thought impossible, to controlling economic fundamentals and rebuilding the country.

Vehemently defending the catchphrase ‘Emerging Wonder of Asia’ repeated on many occasions and at many events, Cabral stated that according to the new ‘Mahinda Chinthana – Way Forward’ plan of 2010, Sri Lanka had been recognised as a possible wonder of Asia due to the marvellous transformation that had taken place within the country.

End of terrorism

“We are going through a wondrous phase now. Within the last five years, the country has gone through a period of change, which is wondrous when you come to think of it,” Cabraal said.

Point one goes to the completion of the debilitating terrorism in the country which has haunted the country and its development for years on end, inflicting intense pain on its people, he noted. “We managed to complete this which many thought was not possible; isn’t it truly a wondrous thing?”

Resettlement of IDPs

Next is the resettlement of the 335,000 IDPs, which the country managed to almost complete within a period of two years. Cabraal stated that the UN estimated 10 years for the process which is in its final stages now, two years after, with just 10,000 more to be resettled.

“That too due to the demining process that is still underway,” he assured.

The number of mines in the north is mindboggling, the Governor said. With an estimate of 500,000 mines buried in the area, groups calculated approximately 10 years for the task of demining to be completed, with just 50 being dug up per day. As at now 336,865 have been demined, which comes to some 500 mines removed per day. “It is a wondrous task we have completed,” he gushed.

Thanks to the demining process, there is a surge of development in the north now, Cabral said.

Infrastructure

“Regarding infrastructure, there are five mega ports being done up simultaneously. With land being reclaimed, a port which is three times the existing one is being constructed. This is intense work. Sri Lanka is also building another at Hambantota of which phase two work has already started, another at Kankasanthurai and Oluvil (for fisheries) and one at Galle for tourism purposes,” he reminded.

With airports also inline, the one that is expected to come up in south will have the ability to land the world’s largest aircraft in the country. Another 14 domestic airports are also in the pipeline.

Road network is also in focus with highways as well other by roads being repaired and reconstructed. “The new highway enables us to travel from Kottawa to Galle in 45 minutes tops. Did people of our vintage think this would be possible?” he questioned.

“For 20 years Sri Lanka has been talking about a coal power plant. The work only started five years ago and two weeks ago this was opened and now 300 megawatts are being added to the national grid,” he further stated. Colombo city development too has now taken shape and portrays a new wave of development within the country, he mentioned.

Macroeconomic fundamentals

“Look at the macroeconomic fundamentals. We were struggling at every stage before. Now we have a growth of 8% and in 2011 we hope to achieve 8.5%,” asserted Cabraal.

Inflation too was a serious problem which stood at an average 12% over 30 years to be moderated to mid single digit level. Debt to GDP which was 104% in 2003 is today at 82% and is hoped to come down to 65% in the next four years.

“A week ago we issued an international sovereign bond of US$ 1 billion, which generally takes 24 hours to complete. However the demand was such that it was oversubscribed by US$ 7.5 billion and was closed within 12 hours. There is extraordinary interest from the international investors.”

Out of the subscription, 47% came from USA, 30% from Europe and 23% from Asia. “The appetite for Sri Lankan paper has been a phenomenal endorsement of the confidence of the international market.”

The best performing stock market is also showing steady growth, he noted.

Sri Lanka has been almost shockproof during the crisis period which saw the collapse of 165 banks in USA in 2010 itself while Sri Lanka managed to hold fort. At the end the country even managed to record an unemployment level of 4.5% – which Cabral stated other countries would “give an arm and a leg for”.

Poverty levels have been brought down from 22% in 2005 to 8.9% in 2010 – an extraordinary move. “People have been touched by good policies and poverty levels have reduced.” Reserves, which were down to US$ 1.5 billion at the height of global downturn, are now at US$ 8 billion.

Smooth road ahead

Within the next few years Sri Lanka can move into an autopilot mode to take forward the next part of development, the Governor said. “We are still being dragged by gravity, when we pass this stage we can take the smooth road ahead with little intervention from the Government.”

If the target of bringing down poverty to 3% by 2016 is achieved, the overall political climate will become more benign and the country could truly reap the fruits of development across all borders, he assured.

Electricity will brighten up lives for all citizens of the country within the next two-and-a-half years with no power cuts whatsoever. With that, along with the new road network in place by 2015, the climb ahead will be a smooth one.

Hub concept

“Today we develop the hub concept. It takes a lot of people, a lot of ideas to implement these,” Cabral claimed. “With the technological development taking place, IT parks must be constructed in Sri Lanka – we must ensure that this happens. We need to strive for it and make sure it happens.”

“This is why we dare to call ourselves wondrous. I am humble enough to admit that there is lot more to do. But we today have the opportunity of being partners in the leapfrogging process of development. We are fortunate to be able to be part and parcel of this growth. Extra vigilance is needed to take it forward. There must be massive improvements in work ethics – a ‘can do’ attitude must be adopted,” Cabral said.

“To be the wonder of Asia isn’t an easy aspiration. It’s tough but this is what we want to achieve,” he concluded.