19th Amendment:

National Audit, Procurement Commissions soon

by Rohana Jayalal

The passage of the 19th Amendment in Parliament will help develop the country while improving its image at the international level, State Minister of Finance Mahinda Samarasinghe told guests at the release of the United Nations Economic and Social Survey of Asia and the Pacific (ESCAP) report in Colombo last week.

Minister Samarasinghe said, “The Government should market this because the inclusion of the 19A in the Statute books will bring many benefits locally and internationally. The Amendments have created independent commissions which underline good governance and fair-play. This is something an investor will look for, before investing in a country and Sri Lanka should aggressively market this message to the international community.”

The Minister said that when grants and loans were given to Sri Lanka, the international community no longer considers only the economic indicators, but considers social indicators such as the prominence given to human rights, transparency and good governance as well.

Among the independent commissions to be set up, two are interlinked with the economy. One is the Procurements Commission and the other the National Audit Commission. When the two commissions are set up there would be greater transparency. The absence of such commissions resulted in a lack of transparency and a lack of accountability, he said.

Investors are discouraged and investments drop when there is no transparency and accountability. Growth per se is not only about development. It reflects the social aspect as well. Growth enhances social development, which means that disparities must be reduced. Unless reforms are vigorously pursued, downside risks to the growth trajectory could increase, Samarasinghe said.

While the private sector has an important role to play in making growth more inclusive, greater efforts are needed by the public sector to lay the appropriate framework and create an enabling environment, especially as addressing income inequalities is important to increase inclusiveness.

Minister Samarasinghe said that the economic growth in Asia and the Pacific continues to fare well in the global context, but is expected to increase only slightly to 5.9% this year from 5.8% in 2014. The slowdown in the rate of expansion of economic growth is happening at a time when lower oil prices could potentially have lifted growth in oil importing countries if the enabling environment was right. “Growth is expected to remain at the high rate of 7.5 percent in 2015 and 7.6 percent in 2016 on continued strength in private consumption,” said Economic Affairs Officer, ESCAP, Siuvojit Banerjee.

“Sri Lanka’s growth performance has strengthened since the civil war ended in 2009, in part due to reconstruction work on road networks, hospitals and schools while the economy expanded by 7.4 percent in 2014, up from an average of 6.8 percent over 2012-13,” he said.

“Private consumption drove the economy, supported by rapid growth in tourism and remittance receipts, the decades-low inflation rate, a rebounding agricultural output after the drought in late 2013 and monetary easing and investment will be supported by ongoing reconstruction and a increase in infrastructure spending,” Banerjee said. “Exports should benefit from the economic recovery in the United States, which remains Sri Lanka’s largest export market while State-led development will continue in the light of the increase in public sector salaries and State pensions,” he said.