Sri Lanka on path to become the 'Wonder of Asia'
By Shirajiv SIRIMANE
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Many projects to benefit the people have been launched by
the Government
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The 30-year battle
pushed back Sri Lanka's economy and development by many decades.
However, the ending of this brutal conflict has opened a window of
opportunities for the country to surge ahead and become the 'Wonder
of Asia'.
The conflict that started with the killing of Alfred
Duraiappah initiated by Velupillai Prabhakaran ended at Nandikadal
when President Mahinda Rajapaksa completed his humanitarian
operations on May 18, 2009.
Many lives have been lost, tens of thousands of
people disabled while millions of people have suffered due to the
bloody LTTE war. The damage caused to the economy, especially to
industries and enterprises, will run in to several billions of
rupees. Some of the factories which were in operation then such as
the KKS cement factory and Pulmudai Mineral Sand Company are yet to
be reopened.
The battle put brakes on economic development and
created an unhealthy playing field for local entrepreneurs. Tourism
was one of the industries that took a severe beating as bombs
exploding everywhere and adverse travel advisories issued by foreign
countries prompted foreign tourists from seeking their holidays
elsewhere. This resulted in retrenching of staff and hotel wings
partly being shut down; one of the biggest and saddest plights the
hotel industry faced was the lowering of rates and under-cutting.
Foreign direct investments too took a similar
beating and even local entrepreneurs had second thoughts about
investing in the country.
The Government, on one hand having to battle
terrorism and on the other having to present a welfare budget, found
it hard to make ends meet.
Soon after the battle ended, the silver lining on
the horizon brightened with the Colombo Stock Exchange (CSE) showing
positive signs. Its negative indicators changed direction and
started an upward trend, soon reaching record after record.
The CSE surpassed its highest ever turnover recorded
for a given year, when it reached Rs. 115.2 billion in October 2009.
The previous record was Rs. 114.6 billion recorded in 2005. The
average daily turnover was Rs. 538.5 million, surpassing the
previous high of Rs. 481.5 million for 2005. Both price indices of
the CSE recorded exceptional growth this year.
The All Share Price Index (ASPI) reached 3,139.7 on
October 13, 2009, the highest point reached by the index. Reuters
ranked the CSE as the best performing stock market in the world for
the year on October 5, 2009.
The market capitalisation of the CSE crossed the one
trillion level and reached Rs. 1,008.5 billion on October 13, 2009,
the highest in CSE history.
Sri Lanka also achieved another landmark when it was
elevated to a middle income country, from the status of a US$ 881
per capita income nation in 2000 to the level of a US$ 1,617 per
capita income nation in 2007.
In 2008, the per capita income rose to US$
2,014.With the end of the war, Sri Lanka became one of the few
countries which were able to record positive GDP growth rates in
2009 despite the global recession.
Per capita income
The Government now predicts the per capita income to
increase to US$ 3,000 by 2011 and US$ 4,000 by 2014.
The conflict also held back development plans the
Government had made for the North and East.
Jaffna in the pre-conflict period was
self-sufficient in every way with the industrial sector booming and
residents maintaining a high per capita income. It was estimated
that there were 750 industries in Jaffna prior to the conflict;
sadly this number was reduced to about 35 over the year.
However, with the end of the war, the economy in the
North and East is now slowly but surely recovering and heading back
towards the lost glory of the past and self-sufficiency once again.
The fisheries industry is geared for better times
with the lifting of sanction on fishing while the opening of the A9
highway has opened a new market for the Northern entrepreneur.
The Indian government too is taking a lead role in
the North and East development. Indian Foreign Secretary Nirupama
Rao said New Delhi would continue to give financial aid to Sri Lanka
for the rehabilitation and reconstruction of Northern areas.
"Indian Prime Minister Dr. Manmohan Singh announced
an assistance package of Rupees 500 crores for the rehabilitation
and resettlement of the North last year," said Rao, delivering the
inaugural address at a two-day seminar on Sri Lanka held in New
Delhi.
"We have in addition extended the lines of credit
worth 416 million dollars for the restoration of railway
infrastructure and other infrastructure projects in Northern Sri
Lanka.
"Another 382 million dollars are in the pipeline,"
she added.
"The end of the military conflict in Sri Lanka has
presented the country with many challenges, and we should not
underestimate any of these challenges," she said.
Development efforts
Meanwhile, economist Rohantha Athukorala commended
the efforts of the Government in the reconstruction and development
efforts of the North in the past three months where the focus has
been on key infrastructure development such as roads, electricity
and water systems.
He said that now is the time for the private sector
to move towards next generation technology like the BPO sector in
areas such as Jaffna so that Sri Lanka can leapfrog its economy like
South Korea did, to cross the 10,000 dollar mark in the near future.
"Another area to focus on that was pointed out was
the software industry which can easily be a six billion dollar
industry for Sri Lanka," he said.
He said the next challenge is to involve the
community in the development process in the areas of Mulaitivu,
Kilinochchi and Mannar.
He said the Private-Public-People (PPP) model needs
to be driven in to make an economic change to the market dynamics
which are seen in Western markets.
The Government was able to accelerate the ongoing
development projects such as building five ports, an additional
airport at Mattala, two highways to Matara and Colombo airport and
the power and irrigation projects such as Kotmale, Norochcholai,
Sampur, Kerawalapitiya, Uma Oya and Moragahatenna.
A peaceful country with a stable government would
also bring in more foreign direct investments, ushering in more
wealth to the country where the dream of the islanders 'Wonder of
Asia' could be a reality.
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