Sri Lanka closing in on peace, sound economy
By Quintus Perera
Neither lasting peace nor a sound macro-economic environment is in Sri Lanka though they are both getting closer, remarked John Cooney, Country Director, Asian Development Bank (ADB) speaking as chief guest at the National Chamber of Exporters (NCE) 11th Awards Ceremony held last week at Colombo Hilton.
Imperial Tea Exports (Pvt) Ltd, for the third consecutive year, won the gold for the most prestigious award for Best Sri Lankan Brand Exporter along with six other awards including Agriculture Sector-Traditional and Agriculture Sector-Value Added Tea.
Cooney congratulated the NCE for supporting and encouraging the export sector. He said that the reduction of poverty in the country was ADB's overarching objective which was pervasive and unnecessary. Since 1968 it was the country's most constant development partner, earlier focused on agriculture but eventually expanded and today its ongoing public sector programmes is in the range of $ 1.4 billion covering a wide range from expressways to wildlife conservation.
Rural electrification, road improvement, education, agriculture and plantations, finance, private sector development and an increasing focus on post- conflict rehabilitation in the north and east too are now included in its development programmes.
He said that the ADB assists the government to move away from the persisting state sector focus to the much more open and outward looking approach akin to globalization. In the continued support for the government's reform agenda, the ADB commitment to Sri Lanka for the next four years would be a massive $1 billion of which a significant amount would be channelled for reconstruction of the north and east, but not at the expense of supporting the rest of the country.
Cooney said that he was amazed that while the country was so rich in resources the paradox was amidst all this potential, almost a third of the population lived below a very meagre poverty line, saying "poverty here is a man-made phenomenon, the result of decades of unfortunate policies on everything from land to inter-community relationships."
He said that they were very encouraged by the clear focus of the government, through Regaining Sri Lanka, the peace process and its other initiatives. Cooney said that the ADB's attack on poverty rested on three pillars of economic growth, widely and equitably shared, human capacity development and good governance. His forecast was that if all these are fulfilled poverty could be reduced.
He said that all these were relevant to exporters and the private sector as economic growth must be private sector driven. The days the state dictated how individual enterprises should be managed are gone, he said.
He said that human capacity development was critical to the development of the private sector and he was of the view that Sri Lanka's education system has failed in this sphere. The broadest definition of good governance and its narrower definition, the absence of corruption too was essential.
He said sadly, there is still some way for Sri Lanka to go before good governance. He said that though Sri Lanka had liberalized its economy almost 25 years ago, there was still much more to be done for the export sector to keep pace with the global changes. In the domestic arena major reforms were required.
Globalization is here to stay with its technological advances and competition where knowledge is the most important resource and Sri Lanka is closely integrated into the global economy.
Exporters have to look at competitiveness as a major thrust for exports and value addition would be the key factor. Both financial and physical infrastructure and good governance are important for investment. While the donors and international funding agencies pledged resources for development, it was accompanied by an insistence on improvements in implementation. He said that the exporter should not only be concerned about themselves but also with the overall macro strategy.
Apart from the government-focused operations, ADB's private sector operations department provides equity and debt financing including credit and political risk guarantees to the private sector.
Felix Yahampath, President, National Chamber of Exporters said that the Export Awards Ceremony has now been the most sought after event in the business calendar of the country and said that more emphasis was made in focusing on SMEs as they continued to be the backbone of the economy.
He said that power and energy that constituted around 40% of the production costs have caused serious inroads into the efficiency and productivity of the export sector.
He said speedy redress was vital. He said that generally, with the available stringent policy requirements for exports now in force, a similar 'quality control' was needed for imports. Kingsley Bernard, Chairman Awards Committee also spoke. Altogether 84 awards under difference categories were presented.
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