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| Sunday, 4 May 2003 |
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IMF predicts healthy growth rate by Elmo Leonard The International Monetary Fund (IMF) would like to see the LTTE's participation at the Tokyo donor conference in June; the aid meeting is for the development of the whole country, IMF Senior Representative in Sri Lanka, Jeremy Carter told the media in Colombo. The IMF will be present in Tokyo to bolster Sri Lanka's peace bid, he said. Carter believed that the $ 567 million committed to Sri Lanka in Washington last month would be used prudently to fund the country's balance of payment. Sri Lanka could achieve the projected 5.3 per cent economic growth during the year, Carter said. Even in the event of bad times, both external and internal, Sri Lanka's growth rate could grow beyond 2.5 per cent. The Sri Lankan Government had presented to the IMF a letter of intent in the context of its request for financial support. Carter said that the Government was committed to a huge task, but he believed the country could shake off the shackles of poor growth and forge ahead. Sri Lanka had to make its private sector more efficient, while improving the performance of the public sector. Many aspects of the economy should be improved, Carter said. He said the Pramuka Bank case was a wake-up call for the government. The IMF does not advocate that banks anywhere in the world, as in the case of the Bank of Ceylon and the People's Bank, be run by governments of a country, Carter said. The People's Bank owned a fourth of the assets of the country, and the IMF was not happy about it. This bank needed reforms, he said. The Bank of Ceylon had made some progress in this regard, but that was not adequate. Sri Lanka's deposit and lending rates are too high, higher than in India. The Government's attempt to bring down the rates of interest and control inflation was laudable. Having a favourable exchange rate is also desirable. The country's economy could take off if the reconstruction of the North-East goes ahead. Another plus factor for Sri Lanka's economy is the low price of oil, now stabilised at $ 31 per barrel. The demand for power is growing rapidly at the rate of about eight per cent per annum. In the future, more hydro power, coal and natural gas would have to be used, Carter added. He said that the high price of rice was due to successive governments subsidising the farmer. Subsidising the farmer means subsidising inefficiency. Instead, the government should help make the agricultural sector more efficient. The consumer has to bear the cost of subsidising the farmer. It is an unending cycle spelling downward growth, the IMF representative said. |
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