Amunugama outlines Govt. development focus at ADB AGM
Tuesday, 6 May 2014 00:25
Following is the address by Dr. Sarath Amunugama, Senior Minister of International Monetary Cooperation and Deputy Finance Minister, at the 47th Annual General Meeting of the Asian Development Bank in Astana, Kazakhstan
Mr. Chairman, Mr. Takehiko Nakao, President of the Asian Development Bank, honourable members of the Board of Governors, distinguished delegates, ladies and gentlemen, it is a great honour to be here on behalf of the Government of Sri Lanka and to address the 47th Annual meeting of the Board of Governors of the Asian Development Bank (ADB).
I am also very pleased to express my sincere appreciation to the Government of Kazakhstan for hosting this important meeting in this city of Astana. I think this event will provide a valuable platform for strengthening relations between nations of the member countries of the ADB. I also extend my gratitude to the people of Kazakhstan for their warm welcome and great hospitality.
Mr. Chairman, on behalf of the Government of Sri Lanka, let me also extend my warmest wishes to Mr. Takehiko Nakao, the President of the Asian Development Bank. We are waiting to welcome you to Sri Lanka in June this year.
Ladies and gentlemen, Sri Lanka greatly appreciates the ADB’s assistance to its members through its main devices such as loans, grants, policy dialogue, technical assistance and equity investments. It is noted that the ADB has ensured sustainable and inclusive growth across the Asia and Pacific region. ADB’s annual lending volume is typically about $ 6 billion, with technical assistance usually totalling about $ 180 million a year.
The stimulation and dedication of the ADB to reduce poverty by improving living standards of 1.7 billion poor people in the region who are unable to access basic needs is commendable.
I am confident that the ADB can overcome the challenge of limitation in the level of lending, with its good rating and technical expertise to raise resources in domestic and international markets through appropriate instruments. I perceive that the ADB should further expand its infrastructure financing and investment in the member countries through channelising global savings.
Mr. Chairman, the Asian Development Bank (ADB) is one of the major multilateral development partners of Sri Lanka with over 46 years of productive partnership. Since its establishment in 1966, the bank has approved a total of 166 loans, with cumulative lending of $ 5.8 billion to Sri Lanka. In addition, ADB has provided $ 481 million grant to Sri Lanka.
The active ADB portfolio to Sri Lanka spread across six sectors with 20 loans and seven grants and currently stands at $ 1,784 million. The total disbursement in 2013 under these loans was $ 289 million.
In the year 2013, the ADB declared effectiveness of loans amounting to $ 552 million to implement five projects in Sri Lanka. In addition, the Government has successfully conducted negotiations with the ADB in 2013 to mobilise $ 163 million for the implementation of two projects. Initiatives have now been taken to utilise the ADB assistance to support the on-going sectoral development program of the Government differing from the previously adapted project-based financing. This new modality of financing is proposed for the long-term investment program in relation to development of roads, power, education and water supply sectors.
Future ADB financing to Sri Lanka is being strategised along with new development initiatives to develop 1,000 rural townships, ensuring connectivity through national, provincial and rural feeder roads and to develop medium scale irrigation cascade systems and tapping river water to improve access to irrigation and drinking water in several marginalised districts.
Ladies and gentlemen, let me take few minutes to explain to you the recent developments in Sri Lanka. Throughout the past decade, the Government of Sri Lanka attached a great importance to the economic development of the country even though Sri Lanka had been experiencing severe setbacks due to a 26-year internal conflict.
Presently, peace and stability in the country has opened more opportunities for the economy and greatly improved people’s lives. In fact the Government’s emphasis on economic sustainability has grown stronger. The Government’s commitment to unleash the great potential of the economy has lifted the aspirations and collective energies of all Sri Lankans.
I wish to inform you that effective economic policies have resulted in sustained growth in Sri Lanka at an unprecedented pace. The economy of Sri Lanka continues to progress steadily recording an average growth rate of 7.5% during the four years 2010, 2011, 2012 and 2013 amidst global instabilities.
The growth of the economy of Sri Lanka rebounded to 7.3% last year from a 6.4% in 2012 reflecting domestic demand strengthening and a pickup in exports and tourism. Sri Lanka has been maintaining single digit inflation for nearly five years and the country’s per capita income has risen sharply from $ 1,241 in 2005 to $ 3,282 in 2013 and is projected to increase well beyond $ 4,000 by 2016.
With the end of the internal conflict and also the transformation of the economy to a middle income status, the Government of Sri Lanka has initiated a number of massive investments in infrastructure development in the country with local resources as well as foreign funding arrangements. Accordingly, mobilisation of foreign funding from development partners has been increased considerably.
The continuous progress has been underpinned by stable and prudent macroeconomic policies followed by the Sri Lankan Government. Within the medium-term fiscal framework, the Government’s debt management strategy is designed to reduce government debt gradually to a lower level in line with lower fiscal deficit and higher economic growth in the range of 7-8%. The debt-to-GDP ratio is targeted to reduce below 65% by 2016 and to 60% by 2020 of which foreign debt will be around 30% of GDP.
The Government has been pursuing large-scale reconstruction and development projects in its efforts to spur growth in lagging areas, develop small and medium enterprises and increase agricultural productivity. The Government’s fiscal consolidation efforts and strong GDP growth in recent years have helped bring down the Government’s fiscal deficit.
The Government has also taken measures to unleash the dynamism of the private sector to facilitate the country’s transition to higher income status.
Ladies and gentlemen, in 2013, the Government of Sri Lanka and the ADB jointly developed the medium-term Country Partnership Strategy 2014-2016 for ADB partnership in Sri Lanka. It is closely aligned with the Government’s strategy, Mahinda Chinthana 2010-2016, and ADB’s long-term strategic framework, Strategy 2020. It reflects the country’s transformation and addresses the priority agendas of middle-income countries, such as skills development, transport services optimization, and sustainable energy. Accordingly a total of $ 926 million has been earmarked for the period 2014-2016.
Mr. Chairman, in closing my address, I am pleased to mention that the Asian Development Bank is a long-standing development partner of Sri Lanka. I wish to express my sincere appreciation for the support extended by the President of the ADB and his team to uphold economic development in the region. I look forward to further strengthening economic cooperation with ADB in future.
Thank you very much for your attention.