Financial Times

Sri Lankan growth seen at five percent this year

The maiden issue of the Sri Lanka Economic Quarterly, produced by the Asian Development Bank's (ADB) Sri Lanka Resident Mission, predicts a 5% growth rate for the country in 2003. This performance builds on the progress the government has made in achieving short-run macroeconomic stability in 2002, an ADB statement said.

"The government's deficit target of 7.5% of GDP in 2003 is ambitious but feasible. Success in achieving this target hinges on the government's ability to control its recurrent expenditures," it said.

Inflation has been on a downward trend during the last few months, but the average price increase was still in double-digits for the year. Inflation should continue to fall to 8.5% for 2003, if supported by appropriate monetary policy. Controlling inflation is a critical element of macroeconomic management, given the potential for political instability linked to continued increases in the cost of living, the statement added.

Following the expected global recovery, particularly in the second half of 2003, Sri Lanka's exports should expand by 6.5%. However, imports are projected to grow by 9%, in part from increased demand for intermediate goods, but also from capital goods to support higher investment rates. As a result, the current account deficit for 2003 should reach 4% of GDP.

Several risk factors cloud this otherwise positive scenario. The projections assume continued progress in the peace process and political stability at home. Key external threats include the possible war in Iraq, with its adverse impact on oil prices and global trade, and slower than expected recovery in Sri Lanka's main export markets.

ADB said the quarterly provides an update on the macroeconomic environment and ADB's projections of key indicators, based on the government's most recently released data.

Each issue of the quarterly will also provide analysis of key policy directions from the government's development agenda and a special topic drawn from an area of economic importance to the country. The ADB will publish the quarterly in January, April, July, and October, following the Central Bank's publication of the quarterly GDP figures. The quarterly will be available on ADB's website at http://www.adb.org/SLRM/publications.

A hotel that grows its own food

By Quintus Perera
Taj Airport Garden Hotel, part of the Taj Hotel chain, is meeting some part of its vegetable and fruit requirements by producing it in the hotel's huge land reserves. Already crops like pineapple and papaya are being harvested along with a wide variety of vegetables.

Officials said that while coconuts are in excess and also sold outside, the hotel's entire requirements of mushroom, spinach, capsicum, spinach and pineapples come from its own gardens which also supplies 25 percent of other vegetable needs.

Food output is also growing under the new cultivation of two acres of hotel land in the hope that the hotel would be self sufficient in its vegetables and fruits.

The hotel's initiative to grow its own food is as part of its concern, shared with other hotels in the chain, to protect the environment and conduct its business in an eco-friendly manner.

The group is particularly concerned about air, water, and noise pollution, soil erosion and the depletion of ozone layer that contributes to global warming.

Nirmo Thambapillai, the hotel's General Manager, said that maintaining an ecological balance and getting rid of environmental pollution is important for society and that they tried their best to maintain the environment in as natural a state as possible. Some of the measures adopted by the chain include installation of filters and wet scrubbers on all exhausts including kitchens, boilers and diesel generators to prevent air pollution.

Filters are fitted at fresh air inlets, to filter dust. Kitchen waste water is passed through a grease and oil trap, which is cleaned regularly to contain water pollution.

The staff at Taj hotels are trained to sort out all non-biodegradable waste, which is sold for recycling. Biodegradable waste is given over to animal farms. Extensive plantations are maintained to keep the hotel as “green” as possible. In different areas extensive subletting monitors are used to conserve energy.

Thambapillai said the Airport Garden Hotel is one of the hotels that has full occupancy throughout the year, due to its location close to the airport. Many tourists, either coming to Sri Lanka or going back, have made it a point to make a stop-over at the hotel, some for a few days and others just a day or two. Some of the rooms are occupied by expatriates working in the Katunayake Free Trade Zone, and also by aircraft crews.

Thambapillai, who joined the Taj around two years ago, has more than 30 years hotel trade experience having served a number of hotel groups. He is a specialist in food and beverage. A Ceylon Hotel School graduate, he started his career at the Mount Lavinia Hotel, moved to the Oberoi, Ramada Renaissance and also worked at John Keells hotels. He has also worked abroad.

Sri Lanka ideally positioned as a regional hub

Sri Lanka is ideally positioned to be a sea freight and air hub and could develop as a vital link for European markets, says Jacques Creeten, FedEx Indian Subcontinent Director.

He was speaking to The Sunday Times FT last week after FedEx held its Sales Rally in Sri Lanka with around 150 delegates.

Federal Express Corporation (FedEx Express) is the largest express transportation in the world, is in 211 countries and 365 airports and served by a fleet of 663 aircraft and 45,000 ground vehicles.

It deals with 90 percent of the world's economic activity. FedEx operates in Sri Lanka through Mountain Hawk Express.

When asked about the prospects of Sri Lanka becoming a regional base for FedEx, Creeten said that having productivity centres was more to do with geographical locations - e.g. selecting Bombay in India provided excellent down the line connectivity of the entire region as well as the attraction of exports from Asia to India and from India to Europe and the USA.

In future, the Sri Lankan market would play a significant role in the trade and more specifically to the US and European markets.

He said the Sales Rally discussed regional strategies specially of South Asia and Middle-East where employees and managers together with their commercial partners such as Mountain Hawk in Sri Lanka participated.

Long-term strategies, developments within markets and what tactics to be adopted to continue building leadership position in the region, including the introduction of latest technology, geographical expansion and how trade was developing in the different areas were also discussed.

Though earlier FedEx direct flights were operated through Sri Lanka, now there are no direct flights to Sri Lanka and no definite date could be given as to when flights would resume.

He said Sri Lanka, a high quality producer for the US and Europe, played a big role in garment industry and the peace process was a significant contributor to the economy showing a serious progress towards a bright future.

Creeten said that the major cargo they operated from Sri Lanka was garments and - to be precise - fashion oriented garments which were seasonal with a time of three months between the manufacturing and actual selling to the customer.

The second major item was gems as the significance is customer based high-value goods, customers are certain of security and reliability.
(QP)

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