Economic Review:

Sri Lanka's dream miracle is not too far

by Sunil KARUNANAYAKE

The Central Bank annual report in its comment on Sri Lanka's outlook stated "the end to the prolonged internal conflict and restoration of peace provided a greater optimism for economic prosperity and a strong basis for long term sustainable development supported by appropriate policies.

The opportunities created by the restoration of peace will be complemented by the ongoing global economic recovery".

With external reserves at a reasonable level, low interest rates and inflation, we, the Sri Lankans have a right to believe that becoming the "Miracle of Asia" is not impossible.

Our stock market that performed tremendously will ultimately follow the path of most capital markets in the world in addition to certain irregularities that became a headache to the regulators. Given the increased participation of new listings and the vast number of registered finance companies (RFCs) has brought in to the stock market possibilities of recovery in certainty.

Vast developments in the East and Jaffna bubbling with activity and most important how the people have quickly forgotten the past conflicts gives us lot of courage.

Stable government, appropriate macroeconomic fundamentals and increasing investments in the leisure sector and record tourist arrivals are showing maturity sans narrow political boundaries.

All these augurs well for the country, and Sri Lanka is undoubtedly a safe location without conflicts.

The Colombo Port has outperformed most of the South Asian ports and has gained the eminent hub status.

However, the deepening trade balance is becoming quite a concern according to the latest external sector performance statistics released by the Central Bank.

The January-November trade balance is reported at 8.8 billion US dollars in comparison to the 4.1 billion US dollars for the corresponding period of the previous year.

This no doubt is a matter of worry for the authorities. One positive factor is the likely revival of markets of Egypt, Syria, Tunisia and Libya who depend very much on Ceylon Tea that could push the exports earnings.

The weakening export prices is another key feature of the present crisis that has mostly affected the developed world.

The Central Bank also states that significant increase is recorded in the import of investment goods.

The much needed Colombo South Harbour project is now in progress that will further boost our port capacity to play a dominant role in the region.

The much neglected infrastructure in the provinces is getting a facelift while Colombo has gone through a complete transformation with health and hygiene being given priority.

However, the exit and entry points to the city yet remains congested. The Colombo-Matara expressway has become a boon to the travellers with travel time becoming much shorter.

The Kandy-Colombo highway too is expected to be completed soon. Sri Lanka did host the 2011 World Cup in three venues with two out of Colombo and the spectator response has been tremendous. These mega sports events no doubt give rise to positive feeling to keep people happy or enhance the gross national happiness, the key indicator of governance in Bhutan. Like South Africa, Sri Lanka too must promote tourism along with the sports.

Hambantota with sea and airport will add momentum to the economy. Tourism is showing unprecedented growth.

The legislators have an enormous responsibility to discharge their duties.

The public consensus is that most of them are not clear of their duties and responsibilities and it will be good for the government to conduct an intensive residential training program on parliamentary procedures and discipline, accountability, good governance and public accountability.

"Informed debate is the bedrock of a vibrant democracy. It promotes good governance, prudent decision making and above all the education of the electorate.

Contrary to common belief, our Parliament is endowed with a number of young Turks on both sides of the divide, who are intellectually alert willing to learn and prepared to acquire new knowledge" (The Professional manager) Post Graduate Institute of Management (PIM) the country's premier management training institution recently took the bold step of offering a well designed course of training in economic governance.

A few senior political leaders from both sides of the divide were individually consulted and for wide consultation a meeting was held at the PIM in June last year.

This is a remarkable step towards providing an opportunity to legislators to get a clear understanding of their duties and responsibilities to serve the constituents better.

It would be a good idea to consider levying a tax on all commercial posters (Politicians and tuition masters dominating) printed that could be recovered effectively from the printer and remitted to the revenue authorities.

Given the heavy taxation such as ESC, NBT and VAT that are borne by the industries there exists a justification to tax the politicians who enjoy the privilege of tax free emoluments and duty free car permits that make heavy dents in the government revenue.

In fact one of the IMF requests to the government is to put forward a plan for higher revenue. Henry Ghesquiere (formerly of IMF) in "Singapore's success" adds " Singapore followed an integrated approach to development outcomes, policies, institutions social and cultural values, and the political dynamics of implementation all reinforced each other. Each country must fashion the specifics of its policies and institutions tailored to its own local geographical and historic conditions. Leadership is imperative for effective governance. Singapore succeeded because the leadership was assiduous, highly intelligent in a practical way, determined to achieve shared prosperity, and committed to act with integrity.

Leading with vision and fortitude is possible.

Its benefits can be invaluable. That is Singapore's ultimate lesson! " Miracles are hard, achievable but rewarding, while the public continues to make continuous sacrifices, legislators too should set an example.

With strong committed leadership, let us be hopeful that Sri Lanka's dream miracle is not far away.