Government’s Efforts to invigorate growth brings dividends to all

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Government’s Efforts to invigorate growth brings dividends to all


Monday, 11 October 2010
The post conflict multi pronged speedy development process undertaken by the government has brought fruitful results with upward trends in the GDP growth. The economic, social and Demographic indicators have shown a steady growth. The economic indicators such as GDP, per capita income have improved well while the unemployment has also come down from around 25% to 15 percent by now.
With regard to social and demographical indicators I wish to quote the recent address by President Mahinda Rajapaksa at the UN Summit on Millennium Development Goal quote Social development goals, such as free healthcare, access to education were embedded from independence, in the country's overall policy framework. In addition, through my own vision spelt out in the "Mahinda Chinthana - A vision for future", we embarked upon a 10 year pro-poor, and pro-development oriented framework, to further consolidate and accelerate socio-economic progress, equally importantly. As a result, Sri Lanka has already attained or is on track to attain the MDGs, despite formidable odds. In terms of universal primary enrollment and completion, we had recorded a level of almost one hundred per cent (100%) by year 2007 child birth, and to increase the current rate of ninety eight per cent (98%) of such births, immediately to one hundred per cent (100%). In the health sector, our endeavour is to ensure every expectant mother a safe and attended The infant and under-five mortality rates, have decreased from a rate of 32 per thousand births in 1990 to 11.3 per thousand in 2009 UnquoteIn June this year the government drastically reduced the import tariffs on Vehicles. This has doubled the state revenue from the imports. As a result of the drastic tariff reduction, car imports to Sri Lanka have risen sharply during the last three months. According to latest figure some 450 to 500 vehicles are being cleared daily. In order to facilitate the fast clearance of these vehicles the Customs department has attached more officers to the vehicle unit in the Custom Long Room and even the working hours have been extended up to 8.00 pm from the normal 4.00 pmPreviously since 2008 there was a high import tariffs on vehicles which resulted in a halt to car imports. In October 2009, only 370 vehicles have been cleared from the Customs representing a sharp drop of 54 percent compared with 2008.The government took a bold decision and brought down the tariffs drastically in June this year, a move to invigorate growth in the island in its post-conflict revival.Apart from the Lowered tariffs the government has also proposed tax reforms to simplify the tax process that would do away the complications that prevails in the system as proposed in the budget 2010. A committee of independent persons consisting of economists and eminent personalities from the corporate sector is expected to hand over its report next month to President who is also the minister of Finance. The post conflict era has brought immediate economic revivals in the fields of tourism, agriculture and fishery industries. A tourism master plan encompassing the development of coastal resort areas inclusive of north and the east has already brought desired local and foreign investment. Tourism is a vital area in the policy framework – Mahinda Chinthana of President Mahinda Rajapaksha. It has been identified as capable of effectively driving the country’s socio economic development. The program’s vision for the tourism sector is to make Sri Lanka the foremost leisure destination in the South Asian Region A dramatic rise in visitors has enabled vast development of Sri Lanka's infrastructure. New hotels and better road networks are currently being built island-wide to cope up with the increasing popularity. Several hotel giants are undertaking expansion, refurbishment and major re-development plans in order to meet increased demand for hotel rooms. The Government has already identified over 10,000 acres of state and private lands in major coastal areas and construction and improvement works have already begun under the leadership of Economic Development Minister Basil Rajapaksa. All this will help accommodate the exponential increase in tourist arrivals. The island is now well on its way to meeting its target of 2.5 million inbound visitors by 2016.The development activities in this sector with the idea of increasing the availability of number of rooms from 15000 at present to 55000 by the year2016 are well within its reach covering all areas of the country ensuring the dividends of country’s development to all masses equally.On the other hand the strong macro economic fundamentals have strengthened the country’s foreign reserve. The Government spokesman Media and Information Minister Keheliya Rambukwella when asked about the government stance on the losing of GSP plus facility recently told the writer that since the government has strengthened the Macro economic fundamentals it could face the eventualities positively. “Presently we have a foreign exchange reserve of 6.2 Billion U.S.$ and we are optimistic of increasing it to around 7.5 Billion U.S.dollars at the end of the third quarter”. He had expressed the confidence.The rate of inflation has recorded a downward trend showing a salutatory macro economic outcome. Country’s 43 billion US Dollar economy has registered a strong rebound with Sri Lanka recorded an economic growth rate of 8.5 percent in the second quarter of 2010, the highest ever recorded quarterly GDP growth since 2002. All three major sectors of the economy Agriculture, Industry, and Services registered significant growth rates of 5.1 percent, 9.2 percent and 8.8 percent respectively, in the same period.The other areas that see the flourishing future are the rapid recovery in the financial and capital market performance, the consolidation in the service and infrastructure expansion such as telecommunication, highway and expressway networks.Apart from the above positive trends and consequent to favourable weather, extra land available for cultivation during the Maha season with around extra one hundred thousand acres of land coming under paddy cultivation in the north and east after the defeat of terrorism and the recovery in livestock and fishery sector with restrictions removed, the growth in plantation agriculture and industries, the economy is projected to be buoyant than estimated in the year 2010. Due to success in the systematic implementation of the public policy frameworks as envisaged in the Mahinda Chinthana Sri Lanka could anticipate 8 percent growth in the current year to carry forwards its massive reconstruction and rehabilitation effort in the post conflict era.M. Ali HassenAsst Director of InformationDept of Government Information