Achieve goals, eliminate barriers:

Better structure for economic development

The Deputy Minister of Economic Development, Ranjith Siyambalapitiya said the new powerful ministry that has combined the nerve centres of the economy and connected to the Ministry of Finance through one Secretary has been designed to achieve the Government’s target of over 8 percent average economic growth in the next six years.

Revealing the organisation structure of the Ministry of Economic Development, in an exclusive interview with Sunday Observer Siyambalapitiya said that this new ministry will facilitate to achieve goals and eliminate barriers in decision-making and implementation. According to the organisation structure four key sub sectors; textile and leather,tourism, fruits and vegetables, spices and minor export crops and construction are being coordinated by the Ministry through three Director Generals directly responsible to the Minister.

An Advisory council representing professionals, administrators, community leaders, business leaders and trade union leaders will be appointed under the minister. Responsibilities have been given to the three Deputy Ministers on geographical basis dividing the country into three zones. Deputy Minister Ranjith Siyambalapitiya has been appointed to the Central, Uva and Southern provinces. Deputy Minister Lakshman Yapa has been appointed to the North Western, Sabaragamuwa and North Central provinces and Deputy Minister Mutthu Sivalingam to the North and the East provinces.

Government welfare programs and rural development programs such as Samurdhi, Gama Neguma, Gemi Diriya, Uthuru Wasanthaya, Nagenahira Udanaya also come under the Ministry of Economic Development.

Siyambalapitiya said that these programs will be rescheduled in the future. These programs over lap and duplicate. For instance the Government started the Samurdhi in 1995 providing livelihood assistance for 1.9 million people.

After 15 years there still are 1.6 million Samurdhi recipients.

They have been included in other poverty alleviation programs such as Gama Neguma, Gemi Diriya and Upcountry Development Authority and government spends large amounts of money on these programs. If targets are achieved poverty should be reduced and it should be reflected by reducing the number of Samurdhi recipients. During the last few weeks we drew plans to combine these programs. In the future these programs will be well focused, he said. Responding to criticisms levelled against the Ministry, he said that this is a practical and proved governance practice. This is the method practised by Lee Kwan Yew in Singapore and Dr. Mahathir Mohamad in Malaysia.

This is also a result of reducing the number of Cabinet ministers. We have already seen the advantages of this structure.

For instance now we have all institutions related to tourism in one ministry and it is easy to facilitate the growth of the tourism industry.

Responding to the Government’s surprising decision to cut import tax on vehicles and electronic items during a difficult external trade situation with a rapidly growing trade deficit, Siyambalapitiya said that the decision is based on several factors. After the end of the war the country is ready for a new development era and therefore the country needs vehicles. For long years we have strictly restricted vehicle imports with high taxes.

Today we are planning to boost the tourism industry and already there is a steady growth in tourist arrivals. This year vehicle imports dropped by 90 percent compared to 2009. This also reduced government tax revenue significantly. We want to increase government revenue.

Last year country faced an external reserve crisis and now that issue is solved. On the other hand there is a demand from various sectors for duty free car permits. TheGovernment cannot issue permits for all these segments because it will create many issues.

Referring to the high trade deficit, he said that every economic decision has negative externalities. At the moment there is a high trade deficit.

This will change. The economy is growing. We expect a boost in exports, export prices as well as increase of foreign remittance and foreign investments. The trade balance will improve gradually, he said. -GW