Commendable economic performance

The per capita GDP has risen above US $2000. This is double the figure that was four years ago. This is a commendable achievement.

The International Monetary Fund (IMF) has upgraded Sri Lanka to a middle-income status. No one could blame the IMF for being partial to the regime in power. It would not have done so without solid proof to justify its action.

The unfortunate situation is that while the international financial institutions and researchers applaud Sri Lanka for its recent economic performance local politicians and so-called experts predict doom. Such is their ignorance or anti-regime bias.

It’s not only the rise in the GDP that is commendable. What is more commendable is that economic benefits have been distributed more equitably with the periphery getting a better share. This does not mean that everything is alright. It means that the economy is moving in the right direction, which is what matters most.

It has also been acknowledged world over that the Colombo Stock Exchange (CSE) is the best performing one in Asia and the second best in the world after the Russian Stock Exchange. This has attracted more foreign investors to the CSE.

The all share price index was increased by 37.2 percent and Milanka Index has also increased by 37.6 percent in the last quarter of 2009 compared to the same quarter of 2008.

Also the volume of foreign investment in Sri Lanka during the past four years has been the highest ever since the economy was opened up in 1977. Such inflow of capital shows the confidence in the country’s economic health by foreign investors.

Even in the case of inflation, which usually is on an ascending curve, the Year 2009 marked the lowest known rate of inflation.

By end October 2009, the total level of foreign reserves were sufficient to finance 8.1 months of imports and the gross official reserves were sufficient to finance 5.8 months of imports.

As we reported last Saturday several senior economists have commended the economic policies of the Government and the Central Bank’s prudent fiscal management. Incidentally it was also the reason for the IMF to grant a Standby facility over and above the amount applied for.

Prof W.D. Lakshman has said that a growth rate of 8 percent per annum is quite feasible in the context of the prevailing economic environment. Even an ordinary layman could understand that the country’s economy would take off to a greater height once the massive development projects such as the Hambantota Port, Mattala Airport, the Upper Kotmale and Norochcholai power plants, the Moragahakanda Reservoir are completed in the next few years.

Sri Lanka has also reached a premier position in Asia in introducing e-Governance. Already the population is receiving the benefits of e-Governance in certain spheres. For example, now it is a matter of few minutes to obtain a copy of a birth, death or marriage certificate in the Western province as an electronic procedure has been instituted. Public Administration Ministry also has introduced e-HRM project which would minimize the long delays in public service transfers etc.

This would make the process transparent and leave no room for corruption. Similarly the Commissioner of Inland Revenue has made arrangements for taxpayers to deal with the department via the Internet. Once e-Governance spreads throughout the public administrative apparatus, corruption would be minimized or eradicated totally.

All these achievements have taken place amidst a global economic downturn. Even advanced countries such as the United States and the United Kingdom have fared worse due to the crisis situation. Though there has been a marginal increase in unemployment since 2009, Sri Lanka could contain it and guarantee job security to most of the work force. None of the State banks were affected and those private banks that were affected for various reasons have been bailed out successfully due to State intervention. Even the depositors of financial houses that went bankrupt were saved by Government intervention.

On the whole, the economic performance of the Government has been commendable. The best proof of it has been the accolades received from international financial institutions and the confidence shown in the economy by foreign investors.