Lanka records 7 pc growth

Nadira GUNATILLEKE

COLOMBO: During the past three years Sri Lanka maintained a seven per cent Economic Growth. Sri Lanka acquired it with accurate and farsighted policies, Export Development and International Trade Minister Prof. G.L. Peiris said.

“Today Sri Lanka’s per capita income is US $ 1,630 and Sri Lanka is ahead of Indonesia and the Philippines,” he said. Sri Lanka has the second highest per capita income in the SAARC region, the Minister said.

Prof. Peiris was addressing the weekly Cabinet press briefing held at the Government Information Department Auditorium yesterday.

He said only the Maldives is above Sri Lanka when it comes to the highest per capita income in the SAARC region. The Government is taking all possible steps to make sure that economic benefits reach the people in remote villages.

Denying the persistence criticism by the Opposition on the National Budget 2008, he said the main theme of this year’s budget is strengthening the local economy and increasing local production.

Local production cannot be increased and improved without imposing taxes/tariffs on imported items. If the country wait until local production is in full swing to impose taxes local production will never increase. Local production increases only if there is significant demand.

There will be no increase in production if there are no incentives. The Government has allocated Rs. 1,000 million to find new International markets and has also allocated Rs. 500 million for the Export Development Bank. The Government has reduced the price of furnace oil which will assist the ceramic and apparel industries in a significant way.

Prof. Peiris pointed out that implementing a mechanical formula based on the world market price is not suitable for Sri Lanka at all because it has severe negative impacts on the people. If the Government followed the mechanical formula on fertiliser, farmers would have had to face numerous difficulties.

The Government offered a 50 kg bag of fertiliser to farmers for Rs. 350 when it was only Rs. 950 in the world market and offered it to the farmers for the same price of Rs. 350 when it went up to Rs. 9,000 in the world market.

The Government did not apply the mechanical formula based on the world market price when a barrel of crude oil went up to 147 USD at one time.

Prof. Peiris stressed that the Government has allocated funds to develop small universities and the health sector and to upgrade the living standards of pensioners.

The Government always believed in taking the responsibility of ensuring welfare services such as free education and free healthcare service. The Government has no intention of privatizing public enterprises.

Minister Prof. Peiris said that Sri Lanka has not lost GSP Plus and the Government is having discussions with the relevant authorities in this regard. The Government did all it requires to obtain the GSP Plus but there were limits.

The GSP Plus was there only during the last three years but the country’s apparel industry has a very long history. When Sri Lanka lost Quotas, all said it was the end of Sri Lanka’s apparel industry.

But nothing happened. Discussions have already been held with all relevant parties on the future development of the apparel industry with or without GSP Plus. Sri Lankans should get rid of the pessimistic attitude.

The tea industry of Sri Lanka faced some hardships in the recent past but things are getting better and it is picking up again. Tax on imported papers has been imposed in order to increase and improve local paper production.

All expected that the price of imported milk powder will go up due to taxes but this has been proved wrong.

This is due to an increase in the local milk production, he said.