No bombs, only boom

Aided by billions of investments largely by the Government and growing engagement by private sector, the once war-torn North and East is expected to produce exponential growth from 2011 onwards, a top Government official said on Friday.

Central Bank Governor Nivard Cabraal said a range of high investments via the public investment programme as well as by the private sector along with the overall resilience of the people of the North and East will grow by 13% per annum in the next five years.

He said that the initial signs of the turnaround were evident in 2009 when North and East’s growth rates amounted to 14% from a lower base but from 2011 onwards a high 13% growth per annum is envisioned.

In parallel contribution to country’s GDP growth from these two provinces is expected to increase substantially as well. In 2009 North’s contribution was 3.3% up from 2.8% in 2006 whilst that of the East was 5.8% up from 4.9%.

Cabraal said 2010 data was being firmed up and would be released later in the year.

“There is a clear drive towards holistic development in the North and the East to ensure that people sustain their economic achievements and translate them into a way of life. We expect that the range of investments made in these Provinces will result in a growth rate of around 13% per annum in these provinces, from 2011 onwards for the next 5 years,” the Governor said presenting the Central Bank’s 60th anniversary oration titled “Promoting Financial Inclusiveness in the North & the East – The Experience of the Past Two Years.”

“The two provinces have demonstrated a major appetite for economic activity,” the Governor said pointing to the unprecedented increase in the number of bank branches (see box story) opened as a reflection of the rebound in the economic activities in the North and East.

He said that in the Eastern Province alone, which was liberated earlier than the North, Rs. 116 billion had been invested — in economic infrastructure (Rs. 94 billion), Resettlement (Rs. 12.2 billion), social infrastructure (Rs. 5.6 billion) and productive sector support (Rs. 4 billion).

For 2011, Rs. 26.6 billion had been earmarked under the public investment and social development programme with bulk of it (Rs. 12.3 billion) going for national, provincial and rural roads in the East.

Commenting on the Northern emphasis, Central Bank Chief said Rs. 251.5 billion has been planned for 2011 and 2013 with Rs. 150 billion assigned for improving social economic infrastructure, Rs. 39 billion for human settlement development and Rs. 25 billion and Rs. 24 billion each for strengthening of social infrastructure cum fostering social services and revitalisation of productive sectors. The allocation for 2011 under the medium-term programme is Rs. 51 billion with bulk (Rs. 20 billion) going for national, provincial and rural roads in the North.

Earlier on his address the Governor said that the Government spent about Rs. 605 billion or US$ 5.5 billion (around 4% of its GDP per annum) between 2006 and 2009 on the fight against terrorism. Highlighting various national socio-economic achievements, Cabraal said “these benefits would clearly indicate that the modest investment on defence paid off.”

He also said that out of the 342,916 IDPs in 30 relief villages in May 2009, the number had rapidly declined with the resettlement of the IDPs and as of May 2011, there were only 18,012 IDPs in the relief villages.

This he said was a “huge investment was made by the Government to achieve this outcome.”

The Governor also said that the Government provided a satisfactory enabling environment to facilitate economic activities in North and East as well. He also listed various initiatives as part of the Government’s and Central Bank’s financial inclusiveness strategy.

“The private sector, both formal and informal, have responded very well and continue to respond,” he added.

“The success over the past 2 years has been extraordinary and we clearly surprised the world, but that is because, we prepared for the post-war period, before the war ended, we worked to the plan and we displayed deep commitment,” Governor Cabraal said.

“However, in my view, this is only the beginning. There are huge benefits the entire country, including the North and the East can look forward to, with the contribution expected from the North and the East,” he added.

 

Brisk Banking; Nearly

60 units opened in North; Over Rs. 7 b lent in NE

NEARLY 60 new banking units have been set up in the Northern Province post-war increasing the number of points for financial services to nearly 600 in the former conflict-torn areas including the Eastern Province.

Central Bank Governor Nivard Cabraal said on Friday that since the end of the war in May 2009, 37 new fully-fledged bank branches had been opened in the Northern Province in addition to 22 extension offices. This growing presence of banking had brought the total of bank branches in the North and East to 228 in addition to 111 service points or extension offices and 187 ATMs.

He also said that since the end of the war, over Rs. 7 billion had been lent on a fast track basis by all financial institutions in the North and East under various support schemes.

In the North, slightly over 38,000 loans worth Rs. 4.09 billion had been disbursed whilst the figures for the East were 26,000 loans worth Rs. 2.1 billion. Under micro scale support for Self-Help Groups (SHGs) there had been nearly 15,000 loans worth Rs. 670 million disbursed. The number of SHGs currently is 10,390 with 52,000 people registered with participating financial institutions.

“The expected natural growth of bank branch networks is a clear indicator of the expected economic growth in these regions,” the Central Bank Chief emphasised. He said that the North and East have immensely benefited by the 2:1 rule in branch opening that requests commercial banks to open two branches outside the Western Province for every branch they open in the commercially developed Western Province.