'Unstoppable Sri Lanka 2020':

Public Investment Strategy for 2014-2016

By Jithendra Antonio

Sri Lanka's Ministry of Finance and Planning last week released the government's Public Investment Strategy for 2014-2016 titled 'Unstoppable Sri Lanka 2020'.

The strategy formulated by the government outlines that Sri Lanka intends to become a US $ 100 billion economy by 2016 and a US $ 185 billion economy by 2020. The government aims to increase the Per Capita Income from US $ 4,470 by 2016 and to US $ 8,500 by 2020.

The plan also outlines that an Inflation target of 4% is expected by 2016 while it will be further reduced to 3% by 2020.

The country aims to reach an export target of US $ 18 billion by 2016 and a US $ 20 billion target by 2020 while earnings from the tourism industry is expected to be US $ 2.65 billion by 2016 and US $ 5 billion by 2020. The Government also aims to increase country's trade turnover to be US $ 44.1 billion by 2016 and to US $ 50 billion by 2020.

Sri Lanka also targets over US $ 10 billion from remittances by 2016 and US $ 16 billion by 2020.

The country's Services sector will be further enhanced to reach a target of US $ 2.6 billion by 2016 and to earn nearly US $ 4.6 billion by 2020.

The government aims to reduce unemployment to 3.2% by 2016 and 3% by 2020 and to increase the literacy and computer literacy rate to 99% and 75% by 2016 and to increase both rates to 100% by 2020. It is expected to increase women's involvement in the labour force of the country to 40% by 2016 and to 50% by 2020 while reducing poverty headcount to 2.3% by 2016 and to 2% by 2020.

While economic stability during 2010-2013 has given encouraging signals to the country to embrace a fresh approach, Public Investment Strategy for 2014-2016 has, therefore, been articulated to sustain the growth path while meeting new challenges.

Several sectoral investment strategic directions will be executed during 2014-2016 in the areas of social protection, regional development, agriculture, irrigation, animal husbandry, water supply, climate, forestry and wildlife, education, skills development, health, sports, power and energy, industries, tourism, plantation, roads and highways, ports and aviation, transport, urban development and housing.

Plans also outline the coastal zone, offshore and deep sea areas which are vital in the fields of fisheries and tourism, and the State is now exploring new avenues with the exploration of oil and gas, marine minerals and archaeological sites as emerging deep sea economic activities.

The coastal zone which is 25% of the total area of the country, houses one third of the population and two thirds of all industrial facilities. It is also the home to over 80% of tourism infrastructure.

The Government's target is to increase revenue from Ports to over US $ 1 billion by 2020 and to handle over 200 million tonnes of cargo while increasing the port related investments that would propel Sri Lanka to become a shipping economy. Several steps will be taken such as adding another 2.4 million TEUs to the handling capacity by completing the Eastern Terminal of the Colombo Port and setting up industrial zones specialised in heavy industries around two regional ports such as Galle, Trincomalee, Kankesanthurai and Oluvil.

The Hambantota Port is expected to be further developed as an industrial port to handle bulk cargo. The maritime route where Sri Lanka is positioned is used by over 36,000 ships annually and country's six ports handle over 4.3 million TEUs (Twenty Foot Equivalent Units) per annum out of which 75% is transshipment cargo. Colombo Port alone hands 15% of South Asia's trans-shipments.

Sri Lanka has identified 15 exploration sites for offshore oil exploration including nine blocks in Mannar Basin (one already awarded to Cairn Lanka), five blocks in Cauvery Basin and one block in the Southern Coast.

Accordingly 13 blocks will be offered in Mannar and Cauvery basins to international oil and gas exploration companies. A further six demarcated ultra-deep water blocks all around Sri Lanka will be offered on a joint study basis to determine the hydrocarbon potential though it will not carry any production sharing commitment.

Potential gas discoveries made by Cairn Lanka had been negotiated with other stakeholders including CEB and CPC on the modalities of production, and gas pricing mechanisms seeking possibilities of adding Sri Lanka owned gas in the power generation mix.

With the Public Investment Strategy for 2014-2016 the government aims to ensure a wholesome and inclusive society where every person enjoys the economic and social benefits that will accrue with growth.