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| Tuesday, 6 April 2004 |
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Maintaining economic growth Another General Election has ended. The people have given their verdict. From a business point of view, the most positive factor was that the poll caused the minimum disruption to economic activity. First, the election itself was held on a Friday, the last day of the working week. Three more holidays followed. Significantly, there was no post-polls violence. A curfew was deemed unnecessary for the first time in recent history. This meant minimum economic damage, as most business establishments, especially in the retail sector, could open the very next day. These are signs of political maturity which will be seen in a positive light by local and foreign investors. People have proved that elections are no longer occasions for virtually shutting the country down for a week or so. Now that efforts are under way to form the next government, we must take stock of the challenges that lie ahead. The biggest challenge is bringing peace, which is vital for economic prosperity. All the parties in the fray pledged to continue the peace process and the people have endorsed this view. Therefore, no time must be wasted in re-commencing the stalled peace process. Another major challenge is maintaining the momentum of economic growth. Again, the people have given their blessings for unimpeded economic growth. The new government must find ways and means to spur foreign investment and local small and medium industries. The latter are essential to stimulate the economy especially in rural areas. Employment generation is another priority. Creating jobs for the nearly 700,000 unemployed youth as well as for those who will enter the job market in the near future must be considered as an urgent necessity. Privatisation is a thorny issue that any government must face in a globalised world. But it is no panacea for all ills. Indeed, some of the privatisations have resulted in little benefit to the country. Keeping the most vital institutions under state control may thus be essential. Improving trade is seen as another challenge. The development of exports must be given priority status. Exporters will welcome the removal of some recently-imposed taxes on exports. Instead of taxes, exporters must be granted all possible concessions and incentives. Sri Lanka's garment industry deserves special attention in this regard, with the abolition of the Multi-Fibre Agreement by 2005. We must take urgent steps to further improve the quality of our products and find new markets. Of course, this applies to our other traditional and non-traditional exports as well. Infrastructure development must also be high on the agenda of the new government. The expressway projects must be accelerated. Telecommunications facilities must be rapidly expanded to the provinces. But the most urgent issue at hand is the soaring demand for power. We have still not extricated ourselves from the over-dependence on hydropower. We are paying a high price for this folly, with power cuts on the horizon-unless rain intervenes. But this cannot go on for all time. It is time that plans for alternative power plants are translated into action. This will help the authorities to cope with the exponential demand for power. No foreign investor or local industrialist will want to begin new projects without the assurance of a reliable supply of power. Be it power or any other form of infrastructure, the North-East must be included in the country's development plans. This region has been neglected for decades as a result of the war. But now it is time to integrate it to the rest of the country and its development drive. All these will require funds. We traditionally look forward to foreign funding and expertise for major projects. The new government must strive to veer away from this stance and opt for a 'trade-not-aid' mentality. We must remember that loans, however, appealing they may seem, have to be paid back by the future generations. Also, why choose foreign contractors and experts for mega projects when local personnel are more than capable of doing it perfectly? We hope that the new government would be able to tackle these issues with the cooperation of all parties and the public, to take the country forward to 'developed' status. |
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