Economic growth measures targeting the North are expected to help double the GDP contribution from there by end 2010.“We can expect the GDP contribution from the Northern Province to double by end of next year when economic activities pick up speed.
At the moment the GDP contribution from the North is about 2.9% but this will definitely increase next year,” the Director of Regional Development at the Central Bank, W M Karunaratne, told the Sunday Times FT.
At the moment, the two war-torn districts of Kilinochchi and Mullaitivu, out of the five Northern districts, do not even have banks operating. But the Central Bank says steps have been taken to broad base access to finance, to push economic growth. “There are around 40 bank branches in the North but these are mainly in Jaffna, Vavuniya and Mannar.
But the Central Bank has already given permission for 29 new bank branches and 25 mobile banking units to be set up in all five districts of the Northern Province,” said Mr Karunaratne. “Kilinochchi and Mullaitivu previously had branches of the Bank of Ceylon, People’s Bank and the National Savings Bank. These branches will re-start immediately with resettlement. Private banks will also go there later,” he said.
The Central Bank also announced a special Development Credit Scheme specifically targeting the Northern Province, called ‘Awakening North’ earlier this week. The scheme will initially disburse Rs 3 billion to micro, small and medium enterprises in the North, through designated government and private banks that already have branches in the North.
Officials say economic activities are already picking up in some parts of the North and funds are also coming in, as inward remittances.
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