Northern and Eastern economies pick up

Shirajiv SIRIMANE

The Eastern economy grew by 2 to 3 percent faster than the national average both in 2006 and in 2007 despite the conflict, which is encouraging. The Northern economy too grew by over 3 points faster than the national average in 2007.

After the liberation of the East from the LTTE more companies will invest in this area and thereby benefit the people to a greater extent. It will also help sustain peace in the country. The Trade chambers and the corporate sector in the South who aggressively pursued trade with the North must be commended for their efforts.

"However the challenge is for the private sector to enter the peninsula and accelerate economic growth so that livelihood development will take place and sustainable peace could be achieved," said Director Economic Affairs of the Government Peace Secretariat, Rohantha Athukorala. The North-East economies also grew rapidly with 12% in the North and 13.3% in the East during the post cease-fire period (2005-2007) and with permanent peace on the horizon this is expected to repeat in the next few years.

This is contrary to the general belief that NE economies grew only during the ceasefire period.

This double-digit growth could be attributed to the post-tsunami and other reconstruction projects and the resilient agricultural growth together with the strong private sector backed trade.

The Eastern province registered an increased growth rate of 13.3% compared to the period 2002-2004. It would have had an impact on the increased disposable income in the households in the Eastern Province which explains the increasing demand for goods and services which the private sector enjoyed during these time period. With the development priorities and the commitment of the people the Northern Eastern economies would grow stronger in the near future.

Athukorala said that Sri Lanka had lost over 200 billion dollars due to the war on the tourism front, FDI's and the loss of focus on the development drive in the strategic sectors during the conflict period.

Sri Lanka's economy grew by 4.3 percent in the fourth quarter from 6.3 percent in the third quarter, while for all of 2008, the economy expanded by 6 percent, down from 6.8 percent in the previous year. Fourth-quarter growth was hit by the global financial crisis.

The Nagenahira Navodaya development drive that has invested Rs. 75 billion in various sectors in the East so far and a further Rs. 121 billion by 2010 will further promote growth.