Prosperity on course, President tells private sector “plug in”

Wednesday, 9 April 2014 00:52 -     - {{hitsCtrl.values.hits}}

  • Encouraged by early success President says Govt., country gaining in confidence to target goals for 2030 or 2050
  • Cites industry estimate of 1 m tourists by 2016 whereas 1.3 m was surpassed last year
  • Says duty of all to “protect” socio-economic gains so far and “take forward” the country
  • Urges banks to support private sector to win new markets
Emphasising that the Government has delivered by both policy and enabling environment, President Mahinda Rajapaksa yesterday called for a bigger private sector role to usher in greater socio-economic prosperity in the long term. Speaking at the launch of the Central Bank’s 2013 Annual Report, the President said it was the duty of all, including the private sector, to “protect” the rapid socio-economic progress of the past eight years, especially since the end of the war, and to enable a favourable environment, improved infrastructure and overall future prospects, and “take forward” the country. He said the Government has achieved several high targets set under the Mahinda Chinthanaya and the country has gained strength to envision a much longer horizon for the future. “We can look at 2030 or even 2050 because we are so focused and have delivered immensely thus far,” the President added. Citing an example of his own confidence and the country’s true prospects, Rajapaksa recalled that soon after the war ended, the tourism industry came with a forecast of 1 million tourists by 2016. “I didn’t agree and insisted the true potential is greater. I said target 2.5 million tourists by 2016. We were right as in 2013 we achieved 1.3 million tourists. We are knowledgeable about our targets,” the President said. He also said that in the past Sri Lanka struggled to achieve 3 or 4% growth whereas today 6 or 7% growth can be achieved comfortably. “But 7% growth is perceived as not enough and this reflects the high expectations people have or got accustomed to under our Government,” the President said. The CB Annual Report revealed that the Sri Lankan economy in 2013 rebounded recording 7.3% growth. With the steady rise in economic growth during the year, GDP per capita income rose to $ 3,280 in 2013. The target for 2014 is 7.5% and over 8% in 2015. The President also emphasised that with the fear of separatist terrorism no more, the next challenge was equitable development. “This has happened,” he said and referred to key infrastructure development such as highways and expressways and how they have benefitted people. “As we progress, the gap between the haves and have not’s must be reduced by taking development to rural areas,” Rajapaksa said adding that the Government was committed towards this goal. “We also expect the private sector to do their part via increased investments and economic ventures. I am also encouraged by the Lankan private sector who have become stronger and have invested or ventured abroad. We have endeavoured to create new export markets such as the proposed FTA with China. The banking sector must help private sector win new markets,” the President said.

 CB estimates over 8% GDP growth from 2015; Cabraal lists key challenges

The Central Bank yesterday revealed its forecast of over 8% economic growth for Sri Lanka from 2015 onwards. According to the medium term macroeconomic framework, real GDP growth is projected to be 8.2% next year, 8.3% in 2016 and 8.4% in 2017. This is the first time above 8% growth is envisaged consistently in the medium term. Last year GDP growth grew by 7.3%, whilst in 2014 forecast is 7.8%. Central Bank Governor Nivard Cabraal in presenting the 8th consecutive Annual Report yesterday highlighted some of the salient achievements in 2013. “These developments and trends have now established a new economic platform in Sri Lanka,” Cabraal said. He said to benefit by these new trends, a new mind-set and a new set of initiatives are now necessary in going forward. “A medium term macroeconomic framework is envisaged to take the economy beyond $ 4,000 per capita levels and the 5+1 hub strategy has been designed to meet these challenging medium terms targets, while avoiding the middle income trap,” he said. However a key highlight of Cabraal’s presentation was a very objective listing of some important issues which Sri Lanka should address if the country were to sustain rapid growth. They were enhancing the productivity and profitability of the strategically important agriculture sector; introducing improved insurance and credit guarantee schemes for the agriculture sector; promoting high value added manufacturing via innovation and research and development; further diversifying export products and markets; addressing the pressure on public utilities and infrastructure facilities as a result of increasing commercial activity; promoting the country’s brand identity as a stand-alone strategy as well as a viable outsourcing destination; positioning the tourism industry to meet the new and ambitious targets; ensuring the continued strength and dynamism of the financial sector; promoting new savings and pension products; continuing the efforts to reduce the cost of doing business and strengthening the contingency buffers to meet future global challenges. “Developing and implementing policies to address these issues will improve overall productivity and resilience of the economy, and ensure sustained macro-economic stability,” emphasised Central Bank Chief Cabraal.

 Dr. PB upbeat on per capita income goal

Treasury Secretary Dr. P.B. Jayasundera yesterday sounded highly optimistic of Sri Lanka bettering per capital income goals faster than planned and the country can aspire for more. With GDP per capita income rising to $ 3,280 in 2013, Dr. Jayasundera said that if Sri Lanka manages to grow by a minimum 6% in 2014 and 2015, the per capita income figure will rise to $ 3,800 and $ 4,400 within the next two years. “Our target was over $ 4,000 by 2016 and if we grow higher the figure could touch $ 5,000 in three years,” the Treasury Secretary said at the Central Bank 2013 Annual Report launch. As opposed to 7.3% GDP growth in 2013, the Central Bank has forecast 7.5% growth this year and 8.2% in 2015 and 8.3% by 2016. Dr. Jayasundera also hailed President and Finance Minister Rajapaksa and Central Bank Governor Nivard Cabraal, saying Sri Lanka was successful in achieving a budget deficit targeted at 5.9% of GDP (marginally higher than the 5.8% forecast) and single digit inflation (4.7%) - two most important considerations for a Finance Minister and Central Bank Governor respectively in a year when other economies have either failed or struggled. The Treasury Secretary also described the CB’s 2013 Annual Report as an eye opener to critics as it documents the impressive progress of the country and the consistent growth trajectory during the past eight years.