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War ruined hopes for economic development - PM

Prime Minister Ranil Wickremesinghe yesterday told a business forum in Japan that the devastation caused by twenty years of war in Sri Lanka had left the country far behind its South-East Asian neighbours.

Addressing the Japan-Sri Lanka Business Cooperation Committee in Tokyo the Premier observed that the country had a long way to go to regain the economic opportunity it had several decades ago. "Then we were on par economically with Malaysia, Singapore and other South East Asian countries. But in the 1960s and 70s Sri Lanka took a different path. With the government nationalising most industries and exerting nearly full control of all economic activity the potential for capital formation was crippled.

This progress towards peace could not have been achieved without the support of the international community. This was demonstrated at the recent Oslo Conference. Norway and Japan, in particular, have stood at Sri Lanka's side on this journey.

Today I would like to discuss with you some of the challenges that we are facing in transforming our economy. And share with you some of our vision for the future.

The Premier said: "Then there was the devastation caused by the twenty years of war. The results is that we have been left far behind our neighbours in South East Asia.

Therefore the main economic challenge facing Sri Lanka is to regain that lost economic opportunity and to join what we believe is our appropriate place in the world economic community.

To this end, our Government is currently implementing an economic reform program with the title 'Regaining Sri Lanka'.

'Regaining Sri Lanka' has four main objectives; * Modernisation, * Using our strategic geographical location to make Sri Lanka an Air Sea Hub and Financial Centre, * A platform for competitive value addition, * Human Resource development - imparting modern technological skills to school leavers and the work force.

He said: At the heart of Regaining Sri Lanka is the recognition that in today's world every manufacturer, every farmer and every government agency must focus constantly on finding ways to improve productivity. It is introducing major changes in the way the economy works and, in particular, in the relationship between the public and private sector. This is something at which Japanese enterprises have excelled and from which we can learn much.

One of the most persistent complaints by private business in Sri Lanka is that the education received by graduates does not come close to meeting their needs.

The result is that we face alarmingly high rates of unemployment amongst graduates - just the sort of conditions that bred the southern terrorism of the Marxist JVP in Sri Lanka in the 1970s and 1980s.

The failure of our educational system goes beyond a persistent mismatch between the training received by student and the economic needs of the country. Far too many qualified students are unable to get access to higher education.

At the heart of the problem is the failure of the public sector to adequately balance available supplies of resources and demands. State planning of higher education has resulted in our inability to respond to the labour market demands.

It seems clear that what is required is to bring the same sort of focused management that maximizes productivity growth in companies like Sony to manage the resources devoted to our public sector. This can be done by a public - private sector partnership.

That is amply demonstrated by experience in many countries.

However, this is one of those cases where it is easier said than done.

But, this transition from state control to a genuine public private partnership raises two immediate issues that I would like to address in the time that I have remaining.

The first, concerns the need to manage the changes in government that will be necessary - something that is always very difficult to do efficiently.

A very different set of technical skills will be required. In effect the public sector must learn to understand and respond to market signals.

No longer will the state sector mandate what will be available, regardless of the needs of the economy and wishes of the people. It will have to compete and use available resources more productivity; otherwise it will lose its position in these markets.

The Premier also said, Sri Lanka has benefited from the generosity and support of the international community, none more so than Japan.

And today, as we grapple with the difficult tasks of building a lasting peace and transforming our economy, we must rely on the support of the international community more than ever before. We cannot achieve these goals without your assistance.

It is, our firm intention to regain Sri Lanka's lost economic opportunities and reach the stage where we will be able to shoulder these burdens ourselves. To do this, we must use productively all of our resources, our human and natural resources, as well as our financial resources, including those made available by our friends and partners.

If we fail to do this, and do not strive to maximise productivity in every area of the economy, we will be diminishing Sri Lanka's economic prospects and with that, the prospects for attaining a lasting peace.

I am confident that we can build on this strong foundation and achieve the twin goals of peace and prosperity.

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