North records highest growth rate of 27.1%:

Development drive focuses on provinces

By Shirajiv SIRIMANE

One of the key elements that led to the youth insurrections in 1971 and 1988/89 and the birth of the LTTE was the minimum focus paid by authorities to development in the provinces. Thus, a common slogan used to woo youth to take up arms was Kolambata Kiri Apita Kekiri which meant that all resources were based around the Western Province. Central Bank data too supported this theory as the per capita income and GDP of the Western Province was far higher than those of the other provinces.

President Mahinda Rajapaksa, hailing from the South, too experienced this trend and hence, one of his priorities was to develop the rural provinces and increase the money flow to these forgotten areas. One of the top and most successful initiatives taken in this regard was the Gamata Karmantha drive which provided attractive incentives to entrepreneurs who chose to start up businesses in rural areas.

This was a successful initiative and several leading companies have taken advantage of this and started factories providing numerous benefits for rural youth. Though Hambantota did not experience terrorism problems, like in the North and the East, the area was highly neglected and ignored by successive governments. Today, however it is being developed at a rapid pace.

Similarly, the North and the East too are being developed with billions of rupees being pumped in, to provide the much needed infrastructure and to bring its standards in line with those of other districts.

One of the priorities in Hambantota and the North and East development is to provide a good road network. Currently, the highway is being extended to Hambantota and Arugam Bay while the Northern highway too is falling into place. The rail track too is being redeveloped. The final phase of construction of the 10-km long railway track, stretching from Thandikulam to Omanthai, is nearing completion.

 The track is being laid with the active support of the 5th Field Engineer Regiment Corps of the Sri Lanka Army. The Army engineers supported the Government’s ongoing reconstruction of the Northern-bound railway line and responded positively to the challenge. Construction work on the Nochchimotte bridge, the second largest bridge along the Northern railway line, between Thandikulam to Kankesanthurai, has been completed. The bridge between Thandikulam and Omanthai railway stations was destroyed by the LTTE during the war against terrorism.

Tourists at Arugam Bay

The Yal Devi at Thandikulam

The construction of the Talaimannar-Medawachchiya railway line is in rapid progress and is due to be opened by late 2013, Mannar District Secretary Sarath Ravindra said.

Railway track

The Transport Ministry has also inked an agreement with IRCON International Limited, an Indian government company, for the reconstruction of the railway track from Omanthai to Pallai. The Government will launch two new rail-bus services, between Gal Oya and Trincomalee and Gal Oya and Batticaloa, in the Eastern Province under the Negenahira Navodaya program in a bid to provide free movement of goods to these areas.

Several projects funded by the Asian Development Bank, through the North East Coastal Community Project are making headway improving the living standards of the population of the Eastern Province especially in the Trincomalee district. 

The Cod Bay Fisheries Harbour project in China Bay is one such project under which mangroves are being re-established to enhance prawn, crab and lobster stock. The project is envisaged to enhance existing berthing capacity for ocean-going vessels, venturing into fringe waters bordering Sri Lankan nautical limits. The project is expected to be completed next month.

The Economic Development Ministry had invested Rs. 1,768.6 million in development projects in the Ampara district last year. The Government has spent Rs. 54,837 million during the past five years to develop the agriculture sector and fisheries industry and to provide infrastructure facilities in the Batticaloa district.

The Government has also taken steps towards a massive agricultural development drive in the Mannar district. The Ministry of Economic Development has spent Rs. 33,025 million on its provincial development projects implemented with foreign assistance.

There are eight large scale foreign-funded projects implemented by the Ministry of Economic Development in the North, the East and other provinces. 

The new Mannar bridge and causeway, connecting the Mannar island with the mainland, was constructed at a cost of Rs. 2,460 million.

In the Kilinochchi district, 8,000 acres of land in the Iranamadu area has been earmarked for the Air Force base, including for the building of an international airport, in the third stage of its development. Phase one of the project covers site clearance and building, administrative, recreational, residential and administrative complexes, which are being carried out at an estimated cost of Rs. 70 million. The base will be commissioned before the end of this year.

Tenders are being called to develop Kuchchaveli, in the Trincomalee district, as a tourism base. Three investors have already expressed interest on marine development in the Kuchchaveli area.

Tourism development

A stretch of land, eight kilometres long with an extent of 600 acres, has been identified for tourism development in Kuchchaveli. A Tourism Development Action Plan for the Eastern Province has been implemented by the Tourism Ministry, aiming to boost tourism in the province. This Action Plan has been signed by a three-member committee of the Sri Lanka Tourism . The Tourism Ministry will take steps to organise 24 projects in the Action Plan into operation.

These initiatives have helped breach the regional disparity gap.

Continuing the trend observed in the recent past, the share of the Western Province in the GDP declined further in 2011, reducing disparities between the provinces.

However, Provincial Gross Domestic Product (PGDP) for the Western Province grew at a healthy rate of 15.6 percent, largely underpinned by the expansion in manufacturing and trade.

The Northern Province recorded the highest nominal growth rate and increased its contribution to the national economy, driven by an expansion in agriculture, fishing, construction, transportation and financial services. The North Western and Southern Provinces had the next highest growth rates and also increased their share of the GDP.

These two provinces benefited from greater contributions from trade, manufacturing, financial services and transport while the Southern Province benefited largely from the high growth momentum in the construction sector. The nominal growth rates in the Eastern and North Central Provinces moderated and recorded a decline in their shares of the GDP, due to a setback in the agriculture sector as a consequence of adverse weather conditions that prevailed in the first quarter of 2011.

The nominal growth of the Central Province GDP also decelerated and its share to the national GDP declined, with the drop in hydro power generation in the second half of 2011.

All provinces recorded double digit nominal growth rates in their PGDP in 2011. The Northern Province recorded the highest growth rate of 27.1 percent, in nominal terms, in 2011. The PGDPs of the North Western and Southern Provinces grew by 21.9 percent and 21.4 percent respectively. However, the growth rates of the Eastern, North Central, Central and Sabaragamuwa Provinces decelerated in 2011 compared to 2010.

The main reason for the high growth in the Northern province was the improved performance in the agriculture sector. The paddy production of the Northern Province increased by 90 percent to 210 million kilograms in 2011 compared to 2010. Significant increases in both inland and marine fish production in the Northern Province also contributed to this high growth in 2011. The marine and inland fish production of the Northern Province increased by 38 percent and 165 percent to 46,370 and 2,150 metric tons respectively in 2011.

The high growth witnessed in the Northern Province was also supported by the expansion of banking services, with 34 new branches established in 2011.

Infrastructure development

The increased economic activities due to major infrastructure development projects including the Southern Expressway, Mattala airport and Hambantota port, as well as better performance in the tourism sector contributed largely to the high growth of 21.4 percent in the Southern Province’s GDP.

Noticeable growth in the manufacturing and financial sectors helped the North Western Province to record 21.9 percent growth in its GDP in 2011. Meanwhile, the Eastern, North Central, Central and Sabaragamuwa Provinces showed a marginal deceleration in their growth rates in 2011.

Adverse weather conditions that prevailed during the first quarter of 2011, affected the performance in the agriculture sector in both the Eastern and North Central Provinces. Paddy production in the Eastern and North Central Provinces decreased by 39 percent and three percent to 650 and 1,144 million kilograms respectively in 2011. In addition, vegetable production in both Eastern and North Central Provinces dropped by 33 percent and seven percent respectively while highland crop production of the Eastern and North Central Provinces decreased by 12 percent and 33 percent respectively in 2011.

Setbacks observed in hydropower generation in the second half of 2011 affected the performance of the Central Province. Hydropower generated from the major power stations in the Central Province dropped by 21 percent to 3,350 GWh in 2011, reducing the value addition in the manufacturing sector of the province.

[Share of provincial GDP in overall GDP]

Reflecting high growth performances in other provinces, the share of the Western Province to the overall GDP declined to 44.4 percent in 2011 from 44.8 percent in 2010.

The Southern Province accounted for the second highest contribution of 11.1 percent in 2011, compared to 10.7 percent in 2010. The third highest contribution to the country’s GDP came from the North Western Province, which was 10 percent in 2011 compared to 9.5 percent in the previous year.

The contribution of the Northern Province to GDP increased to 3.7 percent in 2011 from 3.4 percent in 2010. However, the shares of the Central, Eastern, North Central and Sabaragamuwa Provinces declined to 9.8 percent, 5.7 percent, 4.6 percent and 6.2 percent, respectively, in 2011. The contribution of the Uva Province remained unchanged during the year.

[Provincial Per Capita Income]

The per capita of all provinces increased in 2011. The per capita income of the Western Province at Rs. 490,724 was 1.6 times the national per capita income in 2011. The per capita income in all other provinces remained below the national average of Rs. 313,511.

[Contributions to PGDP]

There were considerable variations in the structure of the PGDP across the provinces. The agriculture sector accounted for around three percent of the GDP in the Western Province in 2011, whereas it accounted for 15 - 30 percent of the GDP in the other provinces.

The contribution of the agriculture sector to the PGDP decreased in all provinces in 2011, except in the Western and Northern Provinces. The industry sector’s contribution to PGDP increased in 2011 in all provinces, except for the Central and North Western Provinces.

As in 2010, the largest contribution to PGDP from the industry sector was observed in the Southern Province.

The services sector was the most dominant sector, accounting for between 49.6 percent and 64.1 percent of the PGDP in different provinces. The contribution from the services sector declined in the Western and Northern Provinces, but increased in all other provinces during 2011.