Promising and prosperous times ahead:

Macro economy sound - ADB chief

by Gamini Warushamana

The President of the Asian Development Bank (ADB), Haruhiko Kuroda said that the Sri Lankan economy will grow at 6% this year and 7% next year, a strong rebound from the 3.5% last year. Kuroda was addressing the media on Friday, after having discussions with the government and visiting the ADB funded projects including the North and the East.

With the end of the conflict and the ensuing peace, I am confident that Sri Lankans can look forward to more promising and prosperous times ahead, he said.

President of the Asian Development Bank (ADB), Haruhiko Kuroda Pic: Saman Sri Wedage

Macro economic stability is the basis of development. At this moment macro economic position of Sri Lanka is sound but the fiscal deficit around 10.5% of the GDP has to be reduced. Strengthening the financial system and greater participation of the private sector in the economy are also important.

Unless the fiscal position is sound the country cannot expect medium and long term sustainable growth.

“I visited some ADB funded projects, and I am impressed with the government’s efforts to develop the infrastructure and improve the lives of people.. A case in point is the Dry Zone Urban Water and Sanitation Project in Mannar, which, when completed will enable around 30,000 more residents to gain access to clean water and sanitation” he said. Kuroda also visited the construction sites of the Mannar and Kilinochchi general hospitals, Colombo port development project and the Southern Highway project that the ADB are funded.

The top priority of the post war development in Sri Lanka is to make sure that rapid reconstruction continues in the conflict affected areas and the benefits of development reach everyone in the country.

It is also needed to enable these people to return to normal lives as soon as possible. Post-conflict development should also focus on more inclusive and equitable growth. For peace to be sustainable challenges need to be addressed he said.

ADB will provide financial assistance to the government for reconstruction and resettlement in the North East. In the next three years over 50% of ADB funds will be allocated for the North and the East.

There are several components of the ADB funding; improve connectivity, reconstruction of key utilities, provide other infrastructure such as office buildings, hospitals and schools and construction of court complexes.

Earlier this year, ADB approved a $150 million emergency assistance loan for Sri Lanka for the reconstruction of urgently-needed infrastructure and to restore essential services for people in the war-affected regions. As of 30 April 2010, ADB has approved loans totalling $212 million to the country for this year.

Despite thousands of Internally Displaced People (IDPs) still remaining in the camps, Kuroda said that the progress of the resettlement of the IDPs is satisfactory. We will help the government to complete the task, he said.

Referring to the Colombo Port development project, he said that Colombo will regain its hub status. It will increase trade and other economic activities and contribute to the growth of the country’s economy he said.