Financial Times - Central Bank governor urges investors to grab ‘low prices’ opportunity

The Central Bank governor last week urged industrialists to desist from the ‘but’ syndrome and clinch opportunities to grow the economy, while requesting them to take advantage of the good points of the bad situation prevailing in the country at present.

“Economic management is all about the attitude – it is how we perceive it and as a country we can do much better without the negativity – especially getting rid of the ‘but’ syndrome,” Nivard Cabraal told the country's corporate heavyweights at the 15th AGM of the Industrial Association of Sri Lanka.

He said the bad situation in the country was what made some prices (land, etc) low at present.

“The country has a huge discount due to the prevailing situation such as reduced land prices and the current scenario will not last long, because it will be resolved soon,” he added. “Once those concerns are resolved, it will change the entire scenario.

Take advantage of the situation because you have a huge opportunity to make money,” he added. Cabraal said that smart businessmen will invest now, because they are aware that they will not receive the same discounts when the situation ultimately resolves.

“Somebody has to break away from the shackles and make a change,” he said, adding that the country's debt to gross domestic product (GDP) ratio for the first half of the year has reduced to 94 percent from 104 percent in 2005’s corresponding period.

“This is still not a good number but it is important to concentrate more on increasing the GDP rather than focussing on debt,” he pointed out.

“If we only concentrate on debt and do not focus sufficiently on the expansion of the economy, we are missing something, because when the economy grows the ratio will come down,” he explained.

Speaking about the recent International Monetary Fund’s (IMF) country report on Sri Lanka, he said that the donor agency was quite happy about the progress made and reasonably impressed with the changes at the Inland Revenue Department.

IPS Director Dr. Saman Kelegama, told The Sunday Times FT on the sidelines of the event, that the high public debt and inflation is a concern. “But if good work is done to bring down these two, economic growth is possible,” he said.

He also said that the Sri Lankan industrialists and the private sector have more or less factored in the highs and lows of the war situation and that they are very resilient.

“However the policy formulation to facilitate their growth should not be an ad hoc affair,” he said, adding that it should be done based on credible studies and not on reacting to different situations or ad hoc lobbying by interested parties.

He said that Sri Lanka should give priority to economic management over political coalition management issues.

The Industrial Association re-elected Dr. Anura Ekanayake as its chairman.