Sri Lanka represented at Korea economic forum:

Govt’s policy helped minimize external shocks - ICC chairman

Ramani KANGARAARACHCHI

Asian countries must work together to turn the challenges of the global economic crisis into an opportunity by expanding intra regional cooperation, trade and the influence of financial markets should make the continent the economic power house of the 21st century, said International Chamber of Commerce Sri Lanka (ICC)Chairman Tissa Jayaweera.

He was making a presentation at the first Asia Economic Community Forum at the Songdo Convensi, Incheon, Korea.

The Forum from November 11-13 will deal with issues and pending questions in political, economic, social and cultural areas under the theme “Creating One Asia Together,” Jayaweera said.

Many economists are surprised that Sri Lanka was not affected too adversely by the global financial shock. Is it good luck or did Sri Lanka act right?

The Government policy of giving pride of place to the domestic economy and prudent policies pursued by the Central Bank have helped minimize external shocks on the domestic market. Stable interest rates and exchange rates to protect and strengthen the domestic economy, disciplined lending by banks, curtailment of foreign borrowings by banks, increasing the risk weight for housing loans, opening Treasury Bills and Bond markets to foreign investors and investing our external reserves with highly rated international banks were some of the measures that helped Sri Lanka to mitigate domestic turmoil, he said.

The prudential measures have yielded 1.8 percent growth in GDP on a year-on-year basis in 1H 2009. Agriculture grew at 3.7 percent, Industry at 2.4 percent and Services at 1.1 percent. GDP growth forecast for 2009 is 3.5 percent with a significant decline in the current account deficit and improvement in balance of payments and forex reserves. Western countries continue to be the main destination for exports while Asian countries dominate imports.

Reforms and restoration of peace are contributing to a stronger business environment, he said.

Sri Lanka is the region’s leading reformer of business regulation according to Doing Business 2009 South Asia Review. Consulting giant T Kearney Global which identifies leading outsourcing locations globally has ranked Sri Lanka at 16 in 2009 compared to 29 in 2008. Global Investment Promotion Benchmarking 2009 published by the World Bank Advisory Service has ranked the Board of Investment (BOI) Sri Lanka as the best in South Asia for investment promotion.