Governance and growth gained: MR

Thursday, 29 May 2014 00:00 - - {{hitsCtrl.values.hits}}

Compares latest Finance Ministry Annual Report with 2003
Recaps development over past 8 years
Says average man now part of policy making

An upbeat President Mahinda Rajapaksa recapped the last eight years of economic growth in Sri Lanka yesterday, insisting consistent policies, transparency and inclusivity had been achieved during this period setting the stage for stronger growth. Attending the launch of the Finance Ministry Annual Report, Rajapaksa was in a jovial mood, recalling his days in the Opposition when it was common to criticise the Finance Minister for all ills of the country. He dismissed the disparagement of his political opponents and laid out many examples of growth. “This is what politicians do. I know this because I did the same thing when I was in the Opposition. When I was part of the Government of course we couldn’t yell at the Finance Minister so then we would corner the Ministry Secretary. These are things I did. Now things have changed. Today when the Finance Ministry Secretary is criticised, he sends me a letter,” he said, to laughter from the audience. Rajapaksa went on to recall the economic struggles during the time of the war and noted that many factories were privatised, which led to the fall of industries such as handloom production. In his view, the launch of the ‘Mahinda Chinthana’ framework gave the country a chance to develop along consistent policies that did not constrain the private and public sectors. “We simply laid out the road. Election promises were no longer relegated to the garbage heap the day after results were announced. Earlier we had more elitist policymakers, but now the three-wheeler driver, the truck driver and the self-employed all have a stake in policymaking. Even when I was the Labour Minister I don’t think self-employed people could come to the Ministry and get relief. That is not the case now.” Participation has been augmented by inclusivity, with basic needs and infrastructure being provided to the people. The President pointed out that 96% of the population had electricity due to the “courageous policies” of the Government. “Of course this has a downside. Now if we increase power prices by even 50 cents, 96% of the population is unhappy with us. Earlier if we did that only 40% would be unhappy.” Stressing that the Government would not stop there, he outlined examples of countries investing outside of Sri Lanka. “Now this country has become too small for some companies and they need to invest elsewhere. We understand that and we will support them. As a country develops, we must move beyond our conventional boundaries.” Firing a salvo at critics of governance, Rajapaksa displayed a Finance Ministry Annual Report in 2003 titled ‘Final Budget Position Report’ to the audience. Flipping through the pages, he compared it with the thick tome of the latest Annual Report as evidence of increased transparency by the Government. “Look at what was and what is. I can barely pick up the 2013 Annual Report. This shows that we are a Government with nothing to hide. I have not gone to international universities, but I know how to develop this country,” he added. Continuing his references to the United National Party (UNP), Rajapaksa pledged to implement education reforms for international schools, which would include the teaching of history and vernacular languages, while dismissing concerns over private universities. Wrapping up, he called on ministry secretaries to refrain from publishing gazettes that “inconvenience” the public and to be more understanding of their needs.

Unstoppable Sri Lanka

Finance Ministry Secretary Dr. P.B. Jayasundera yesterday focused on a horde of economic growth statistics and evaluations by financial organisations to paint an “unstoppable Sri Lanka”. Presenting the Finance Ministry Annual Report for 2013, the usually soft-spoken official was energetic in presenting reports and recommendations about Sri Lanka’s impressive growth rates and evidence of inclusive development. He took on critics who in recent months have questioned the veracity of data released by the Government by putting forward many examples and corroborative statistics from the International Monetary Fund (IMF), Asian Development Bank, World Bank and rating agencies. Early release of the Annual Report was also hailed by him as an example of the Government’s regard for legal commitments and transparency before Parliament. He also noted that the increase of radio and TV stations over the past few years was evidence of the creation of a platform to foster informed discussions about the economic situation in the country. “Today Sri Lanka is open to all rating agencies and countries interested in doing business with us. Even yesterday we met officials from France and discussed the economic situation in the country. In terms of human resources Sri Lanka is among the top five in Asia, these are statements made by others not me,” he said. Dr. Jayasundera then turned to many ranking tables where Sri Lanka was in the top half for economic competitiveness, infrastructure, transparency and economic freedom. In terms of IT rankings he pointed out that Sri Lanka was among the top 21 countries of the world. Touching on GDP, per capita income, inflation, exports and reserves he tracked how they had all improved substantially over the last few years. “Reserves that were about $ 1 billion have now reached above $ 8 billion. The other day I asked the Governor to increase it even more and I think that goal has already been achieved. Next to China Sri Lanka has the highest growth rate. We are overshooting our per capita target of $ 4,000 by 2016; it will likely be reached next year. The general consensus is ‘Sri Lanka is a success story,’ but this is a story that is rarely told. It should be.” By 2016 Sri Lanka’s debt as a percentage of GDP will be reduced to 65% and the Government has already focused on a historically-low deficit for this year, he emphasised. So buoyant is the Government that it is now looking at East Asian countries such as Japan and South Korea to map the next stage of growth.

Evading middle income trap greatest challenge

Avoiding the middle income trap will be the greatest challenge gripping Sri Lanka for the next few years, noted Central Bank Governor Ajith Nivard Cabraal yesterday. Reviewing economic growth over the past year at the Finance Ministry Annual Report launch, Cabraal was keen to point out policies by the Finance Ministry and the Central Bank has guided the country to grater gains. Acknowledgement of this in good times was also necessary, he noted, without only delegating blame to the Government during bad times. “Ease of Doing Business, per capital income increase, GDP growth and much more are all areas where we have improved. This must at times be acknowledged as well. Policies are always difficult to implement because there are groups which will be disadvantaged by it. For example, high interest rates are loved by pensioners and savers but investors are cagey about them. So we have to adjust our resources to match our growth vision,” he said. The different issues when prioritising the needs of an economy were likened by Cabraal to a father with five children and the tough choices he has to make when providing for his family. He stressed that policymakers will continue to make decisions that would put Sri Lanka’s economy on a sustainable footing so that it would reach and maintain 8% or above growth in the years to come.