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Sunday, 9 October 2005    
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UNP'S 10% growth target a pipe dream

by Surekha Galagoda

The UNP manifesto presented last week by opposition leader Ranil Wickremesinghe for the forthcoming Presidential election targets a growth rate of 10% an year after assuming office.

Given the political and economic background of the country the ever optimistic private sector chambers also describe it as a dream and a too optimistic target.

Chairman, Ceylon Chamber of Commerce (CCC) Deva Rodrigo said the target was too optimistic to achieve in one year. Even a growth of 8% will be a great achievement.

China achieved a high growth during a short period of time by attracting a huge amount of Foreign Direct Investment (FDI) to the country. For FDI to flow into the country other factors such as political and economic stability should be in place. The government in power should assure that policies would not change overnight. The conditions are not very stable now to woo investors.

At present the FDI is only 1% of GDP and it should be increased to at least 5% while savings should be increased to 35-40% of GDP. He said that the last time the UNF was in power they were able to improve the growth rate to 7% from negative figures.

The Government has to create the conditions to attract FDI which includes a stable political and economic environment as well as developing infrastructure.

Productivity should be rewarded while employment must be given in a meaningful manner and people should be willing to work extra hours to develop the country and there is much to be done to achieve this target, he said.

President, National Chamber of Commerce of Sri Lanka (NCCSL) Nirmali Samaratunga said it was an ambitious target. She said that the peace process has to move forward if investment has to flow in. But we need more information on strategies they hope to adopt to achieve this target as it is not clear in this document. Maybe they want to curtail public expenditure and also privatise non viable entities.. President, Federation of Chambers of Commerce and Industry Sri Lanka (FCCISL) Nawaz Rajabdeen said that it is a dream without peace and development in the country.

To develop the country it is necessary to uplift the living conditions of the rural poor and address issues relating to agriculture and industry. Before every election all politicians make promises but after they are elected to power these are easily forgotten.

To achieve a reasonable growth of 6-7% in the first year the rural sector should be developed as we cannot achieve a good growth without peace, infrastructure and an efficient transport system. Rajabdeen said that we cannot misguide people with false hopes. We have to address the burning issues on a priority basis if we are to achieve growth.

He said that the country will be able to achieve a 7% growth in the first year while we might be able to achieve a reasonable growth rate within five years provided we have a strong leadership and a strong Government.

Chairman, Ceylon National Chamber of Industries Nimal Perera said that this growth rate cannot be achieved in one or two years.It will take at least 4-5 years as a lot of work has to be done.

The country should attract a lot of FDI and to achieve this the ground situation should be very conducive. Peace and infrastructure are the key issues. The power problem has to be sorted out as the high cost of power is making industries in Sri Lanka uncompetitive globally.

Also to achieve this growth production has to be increased while the SMEs have to be developed. Senior Lecturer in Economics, Colombo University Dr Sirimal Abeyratna said that to achieve this target there should be policy and political stability so that the country can attract FDI.

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