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| Sunday, 5 February 2006 |
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Translating economic policies into a workable plan - a challenge by Elmo Leonard
The challenge now facing the Government of the new President is to translate the economic policies outlined in the Mahinda Chinthana into a workable plan and implement such concepts successfully, president, the National Chamber of Commerce of Sri Lanka (NCCSL) Ms Nirmali Samaratunga said. Notwithstanding uncertainties in the country, the Mahinda Chinthana, focuses on economic growth through poverty alleviation, by taking development to the regions, strengthening infrastructure, building the SME and agricultural sector to strengthen the country's resource base, Samaratunga said at the 47th NCCSL AGM held last week. The government's new economic policy, is expected to integrate the positive attributes of the free market economy with domestic aspirations while also encouraging foreign investment. All this was laudable. And, all that had to be implemented, if the targeted 8 percent economic growth rate in the six-year-period, ahead, is to be realised. The national growth rate and the per capita income statistics do not reflect the sharp disparity between the western province and the rest of the country, and the worsening urban-rural divide, Samaratunga said. It is a critical fact that investment is a prerequisite for growth, Samaratunga said. But, for foreign direct investment, Sri Lanka must compete with other nations in the region, such as Bangladesh, Pakistan and Vietnam. Thus, issues such as, labour reforms, educational reforms, liberalisation of the land market, a continued electricity supply at a reasonable price, was of prime importance to investors. Infrastructure facilities, such as power and roadways have been long identified as being seriously overdue for a major overhaul. The recent funds committed by the World Bank and ADB for the rapid rehabilitation of the existing road network, must be utilised. Samaratunga, welcomed the news that the Colombo Southern Expressway and Katunayake Expressway and Outer Circular Road will be fast tracked. According to official reports the country needs to reduce dependence of thermal power generation and have an alternative source of power by 2008, and the chamber hoped, the matter would be addressed, Samaratunga said. The economic outlook for 2006 seemed bright, projected at 6 percent, bearing that the 2005 growth rate is expected to be 5.5 percent. But, Samaratunga cautioned, that the rising international energy prices would result on negative impacts on growth and inflation. "All this is based on the fundamental premise of the ceasefire continuation between the LTTE and the Government." As a trade chamber, NCCSL was closely involved in monitoring and creating awareness on global developments on trade and investment, the fruits of which could be reaped by its members. The chamber was now focusing on intra-regional trade, which is now facilitated to a great extent through the several trade agreements with India and Pakistan as well as SAFTA, and implementing the BIMSTEC FTA. The country needs to maximise on the competitive advantages received through such facilitation, Samaratunga said. The chamber was also focusing greater attention on the EU market being the single biggest economic market in the world with 500 million people, accounting for 27 percent of the world GDP. The chamber had been working ceaselessly to build linkages in this area to facilitate greater participation of Sri Lankan companies in these markets. The EU GSP plus scheme presents tremendous opportunities for Sri Lanka to link up with this market and the bilateral trade and would create long term benefits specially for the apparel sector while opening markets for the many other new products in the 7000 list, coming under it. The chamber welcomed the recent initiative by the EU Commission office to study the existing trade barriers and identify strategies to overcome it, Samaratunga said. The chamber planned to continue the several initiatives commenced in '05. Its program for '06 will target the agriculture and export sector and will include specific activities to develop the value added products in these sectors, specifically relating to organic products and IT services, being, Business Process Outsourcing and software development. The chamber's representation on the NCED Export Cluster will also assist
in that regard, Samaratunga said. |
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