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| Sunday, 4 July 2004 |
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UPFA to achieve sustainable economic development by Gamini Warushamana The UPFA Government aims at achieving a regionally balanced economic development with a GDP growth rate of 6-8 percent over the medium term. According to the policy statement Economic Policy Framework of the governmnet of Sri Lanka released last week the government considers that an economic policy framework which permits the public and private sector to play a proactive role is best suited to achieve the above growth rate in a sustainable manner while developing a strong national economy. A gradual increase in both public and private sector investment is necessary to support the growth stimulus. Public sector will aim at mobilizing revenue not only from higher tax but also from raising profits and dividends of state enterprises to meet its development expenditure without preempting available funds to private sector led economic activities. According to the statement the government will provide policy support to sectors which can create new capacity in the economy. The main thrust will be placed on domestic resource based economic activities with increased emphasis on agriculture, livestock, fisheries, SME's and tourism. An islandwide infrastructure development programme will be started in the near future to provide greater access to markets. The social safety net will focus on the vulnerable segments of our population and community managed social security programmes will be encouraged to provide welfare to the needy. It further states that the government will be vigilant against any private sector monopolies but will foster competition." Public enterprises will not be privatised while the private sector will be encouraged to compete with public enterprises," it added. The public procurement system will be rationalised to improve the efficiency and transparency of Government transactions. The Government does not think that privatisation is the sole answer for poor public sector performance. Therefore the Governmnet will make the public enterprises generate bankable profit flows greater than the cash value that could be generated through privatisation. Therfore the state will not privatise strategic state enterprises but will encourage competition by inviting the private sector to promote healthy private public competition. Immediate priority will be placed on the re-engineering of the CEB with the restructuring of its balance sheet, the operation of independent business units within the CEB and implementing a long term power generation plan to meet the country's growing demand. Public service will be made efficient, transparent, accountable and people friendly. About 27,000 graduate trainees to be recruited shortly will be made change agents in the state sector to instill a new work ethic and culture while public service salary revisions will be effected following the recommendations of the interim commission on administration. All existing research and development agencies in agriculture, fisheries, pharmeceuticals, minerals, power generation transport technologies, software and industrial production of local raw material will be strengthened. Increased investments on scientific research will be complemented with linkages to tertiary educational institutions and skills training of researchers. The key economic objective of the government is to assist the agricultural sector to attain self sufficiency in food production and food security. In the export sector incentives will be designed not only to encourage high ecological based prodcution standards but also enable optimum value addition to domestic raw material and resources. The government will provide maximum assistance to consolidate the lead role of the textile and apparel industry. SME entrepreneurs will be promoted by the government through the establishment of a multi-prong support mechanism while a dedicate agency consisting of experts from private and public sectors will be created to assist and co-ordinate the restructuring of industries that could be turned into financially viable enterprises. The state will increase the operational bus fleet of the regional bus companies and improve route diversity, off peak hour and peak hour schedule frequency and foster a healthy public private bus service that confirms to time tables and a mix of adequate profitable and mandatory non profitable route allocations to each bus owner. The expansion of the express network through the early completion of Colombo-Matara and Colombo Katunayake highways while Colombo outer circular road and other access roads will be a priority. The implementation of the country's already behind schedule power generation plan includes indentified hydro power projects as well as the proposed coal power projects will be made the highest national priority. Duty on all agricultural commodities will be maintained at the high duty range of 25-35 percent or appropriate specific charges. The macro economic policy vision is to position Sri Lanka as a modern economy free from corruption and political interferences with equal opportunities to every citizen and to emerge as an environment friendly development centre in the region. The overall medium term revenue strategy of the government will include the introduction of an efficient and modern tax administration, mobilisation of maximum yield from the present tax structure and improving the financial performance of public enterprises to enhance non tax revenue flows. The government is committed to phase a reduction of the budget deficit within a medium term budget framework to ensure a orderly correction of structural weaknesses. |
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