The Sri Lankan government is gearing up for widespread economic growth by setting out an ambitious agenda for infrastructure development and investment in all sectors including transport, energy, agriculture and education.
Deputy Minister Sarath Amunugama at the conference. |
This week, Secretary of Defence Gotabaya Rajapaksa said the government is committed to dynamic development to accelerate economic growth by improving the road networks and rebuilding and extending the railway lines. Speaking at the 2010 Sri Lanka Economic Summit in Colombo hosted by the Ceylon Chamber of Commerce, he said ferry services between India and Sri Lanka which is set to commence shortly will lead to enhanced connectivity which is vital for future growth.
Mr. Rajapaksa said there is wide-scale development in ports in which the Hambantota Harbour will start with refuelling and bunkering services. He added that there are many other opportunities for investors to develop lucrative ports in the country. There is also a second international airport being constructed in Mattala which will create an air and sea transshipment hub in Hambantota. Harbour facilities in Colombo are also being expanded. The government is also developing air transport by taking steps to improve the network of airfields around the country.
Mr. Rajapaksa said the end of the protracted civil conflict has made highly fertile land in the North and East of the country available for the first time in decades. He highlighted that the soil in these areas are completely free of chemical fertilizers and pesticides which could facilitate the creation of eco-friendly farms which can produce organic produce for the international market.
CCC Chairman Anura Ekanayake and Organising Committee head Prof. Lakshman Watawala |
He also said restrictions on fishing which were imposed during the war have now been removed, allowing people to tap into the large fish population. Mr. Rajapaksa further pointed out that freeing the coastline has large scale benefits for the tourism industry. Small islands around the Jaffna peninsula and the northern coastline can be developed into high end resorts. He added that tourism can also be developed around historical, cultural and religious sites in the country.
Mr. Rajapaksa also said Sri Lanka’s natural environment makes it ideal for setting up film location services. Currently, Indian actor Salman Khan is in Sri Lanka shooting a movie, a month after the Indian International Film Academy (IIFA) awards were hosted in Colombo. Sri Lanka will also be co-hosting the ICC cricket world cup in 2011 and will be the host nation for the T20 cricket world cup in 2012.
The government is also highlighting the potential in the education sector for more tertiary education facilities and foreign universities to set up campuses in Sri Lanka. Mr. Rajapaksa said there are also opportunities for technical and vocational training institutes to be created in the country.
He also spoke on the opportunities in the construction sector. The government is in the process of clearing out unauthorized structures in Colombo and relocating the occupants. Mr. Rajapaksa said there is an urgent need for economical housing units to be set up in a short period of time for these occupants. Valuable land is not being used for proper projects when unauthorized structures exist. He said conceptual plans are being drawn up for a development along Beira Lake.
Treasury Secretary P.B. Jayasundera also addressed the Summit this week, highlighting the government’s target of 8% GDP growth this year. He said it requires investment to increase to around 35% to 40% of GDP from the current levels of 20% to 25% of GDP. The government is able to accommodate 6% to 7% but the balance must come from the private sector, he said.
Dr. Jayasundera stated that all sectors are open for private investment. For every 1% of GDP investment the government makes, it expects to private sector to make five times that. The priority areas in infrastructure development are the port and aviation sectors as well as tourism. He added that the government is exploring and exploiting all opportunities for private sector investment.
President of Mobile Services at Bharti Airtel Ltd. Atul Bindal who spoke on foreign direct investment opportunities in Asia and the Pacific said the company had compelling reasons to come to Sri Lanka which included a developed infrastructure, skilled work force and high standard of living. With political and economic stability in the country, Mr. Bindal said inflation is under control, the stock market has reached new heights and the rupee has been stable against the US dollar. Net foreign assets are growing and GDP growth of almost 7% for the first quarter of 2010 is impressive. He added that the North and East are now open for market expansion.
Mr. Bindal explained that in order for the telecommunications sector to thrive, there is a need for a regulatory framework with guide posts based on consultative dialogue. He said the minutes of usage in Sri Lanka are about half of that of countries lik Vietnam, which shows there is still a huge potential here.
Competition is necessary and ensures that competitors become more efficient, Mr. Bindal said. When prices decrease, affordability increases remarkably. He added that the company has promulgated the draft National Telecommunications Policy of the government of Sri Lanka but said the government should take into account that the sector is dynamic and evolving and should be able to address issues and make changes at short notice.
CEO of JJ International Consultants (JJIC) in Malaysia J. Jegathesan said the war against poverty is the greatest challenge for Sri Lanka. Mr. Jegathesan, who is attached to the Malaysian Industrial Development Authority (MIDA) and is also a senior economic advisor to the governments of Japan and Zambia, said the race riots in Malaysia in 1969 were caused by widespread unemployment and the uneven distribution of wealth. Malaysia chose to eradicate poverty by creating jobs, distributed wealth through rapid growth and removed identity of race.
Malaysia’s New Economic Policy (NEP) for 1970 to 1990 was achieved through dynamic expansion of the economy and employing an export orientation strategy. Mr. Jegathesan said no race or group should feel deprived. “Poverty is everybody’s business,” he said. Mr. Jegathesan added that economic miracles are possible but the key for any development to succeed is competitive advantage.
Double digit GDP growth as soon as 2013: Dr. Amunugama
While 8% Gross Domestic Product (GDP) growth is expected for Sri Lanka next year, double digit growth will only be achieved mid way through the President's second term, according to the country's Deputy Finance Minister Dr. Sarath Amunugama.
He also noted that throughout the 3-decades, long conflict in the North and East, the government had continued to invest in these and other regions, especially in areas such as agriculture, and, as a result, the country would be self sufficient in terms of food, and especially staples, by next year.
Dr. Amunugama also "pledged" that soon the country would never again experience power cuts, saying that it was already in negotiations with India to exchange power.
Likewise, Sri Lanka was also negotiating with India over nuclear power sharing.
Also indicating that the earth work for the Colombo to Katunayake expressway was completed, he suggested that this infrastructure project too would soon be completed. He also noted that Sri Lanka has "excellent" relationships with China as well as emerging markets such as India, Brazil, Russia and other ins Asia and suggested that reforms to promote further investment in the country were also be forthcoming.
Dr. Amunugama made these comments in Colombo this week as the chief guest of the inaugural session of the three-day 24th Confederation of Asian Pacific Chambers of Commerce and Industry (CACCI) Conference and Sri Lanka Economic Summit, an event which attracted 186 foreign delegates to the country as well as gathering the largest number of local business leaders together. |
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