Development programs bear fruit - Dr. Amunugama

by L.S. Ananda WEDAARACHCHI

With the implementation of rapid development programs in Sri Lanka growth has accelerated, regional disparities have declined and unemployment and poverty levels have dropped to historic low levels, said Public Administration and Home Affairs Minister and Deputy Finance and Planning Minister, Dr. Sarath Amunugama.

He expects the Sri Lankan economy to grow by about 6.5 per cent in the next year.

Addressing the IMF annual sessions held in Istanbul, Turkey, the Minister said that the economic crisis was unfolding in advanced countries and most of the emerging markets and developing countries began to feel its spillover effects. "The period since late 2007 has been extremely challenging and we collectively and individually as the country's authorities, had to focus on measures and strategies for crisis prevention," he said.

"Today, we are witnessing a gradual slowing down of the pace of decline in global economic activity. This is no doubt a favourable development. However, we are most concerned about the recovery being slow and protracted, he said.

Dr. Amunugama said that countries such as Sri Lanka were encouraged by the initiatives taken by the International Monetary Fund (IMF) with regard to developing countries. These countries were suddenly affected by the worst ever external conditions, at a time the majority of them were showing improved performances and making strides towards macro-economic stability. At the onset of the current crisis, many of these economies were increasingly open and integrated to the global economy, he said.

The IMF and World Bank responded swiftly and effectively to this situation by making more money available to the countries that were in dire need of liquid funds. Changes effected to the Exogenous Shocks facility by the IMF in late 2008, to make it more flexible, benefitted a number of countries affected by the crisis. We take positive note of the new financing architecture that was put in place in July 2009 and consider it as a progressive step by the IMF. The US$ 250 billion allocation of Special Drawing Rights is another important milestone," the Minister said.

The Minister said he is hopeful that the proposed tripling of World Bank assistance to developing countries would also materialise soon.