Govt. to grow out of import trap

Thursday, 26 January 2012 01:14 - - {{hitsCtrl.values.hits}}

Declaring war on poverty, the Government is aiming to increase incomes in 2.5 million households this year and benefit the economy through import replacement, top officials said yesterday.

Papers to the rescue?

Economic Development Minister Basil Rajapaksa yesterday at a media briefing relied on newspaper articles to emphasise the rapid growth in agriculture, tourism as well as reduction in poverty, especially in the North, following the end of the conflict nearly three years ago. Here he showcases an article in a Sinhala newspaper at the briefing whilst Ministry Secretary Dr. P.B Jayasundera reads some of his notes

– Pic by Chaminda Hettetiya

Economic Development Minister Basil Rajapaksa and Treasury Secretary Dr. P.B Jayasundera in a joint press conference outlined the second stage of the ‘Divi Neguma’ programme to media and explained that it would be instrumental in the country’s strategy to save foreign exchange.

Admitting that Sri Lanka may face a challenging time in its balance of payments in 2012 Dr. Jayasundera stressed that if the ‘Divi Neguma’ programme is successful in improving agriculture the country would save a bundle in imports.

“This is a many-pronged strategy. In targeting households, we will encourage them to grow vegetables and farm livestock so that food security is promoted. In the second stage, which will commence this year, the Government will encourage self-employment opportunities as well that will tie into the greater economy. Companies will be encouraged to seek opportunities within the country, for example Sri Lanka spends US$ 2 billion on imports of milk powder, sugar, dhal, onions and chilli that can be grown within the country,” Dr. Jayasundera said.

In his view, the Government will then use the saved foreign exchange to meet the balance of payment requirements and other macroeconomic necessities. The ‘Divi Neguma’ programme, which used up Rs. 3.5 billion in mostly subsidised costs last year, will also be used to develop village level infrastructure.

Select villages will be given market places, roads, small-scale irrigation schemes and other necessities to become hubs for the region. Local farmers and entrepreneurs will be encouraged to increase productivity and the aim is to increase household incomes by at least Rs. 3,000 to Rs. 5,000. Education and healthcare will also be upgraded in these areas.

‘Divi Neguma,’ now in its second stage, will focus mostly on fisheries and livestock production in 2012 to fight malnutrition. As Sri Lanka aims to increase investment to 26.6 per cent of GDP by 2016 to double per capita income the Government infrastructure share will be six per cent, Dr. Jayasundera stated, adding that the remainder would have to be done by the private sector.

Minister Rajapaksa also claimed that Vavuniya has a lower level of poverty that Colombo and Gampaha due to the Government’s development programmes.

By Uditha Jayasinghe