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| Thursday, 19 August 2004 |
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Lankan companies should move outward to gain economic benefits - Deputy Governor "Sri Lanka has to realise and make changes to avoid sliding back on the economic front. Sri Lankan companies should brave competition and move outward to gain economic benefits, as Sri Lanka is not a resource rich nation. As a country, Sri Lanka should integrate itself with the globalisation process in order to gain maximum benefits", said Deputy Governor of the Central Bank W. A. Wijewardena. He was speaking at the 'Power Breakfast', a breakfast meeting organised by HSBC Treasury and Capital Markets recently. This is another event organised by the Bank to empower customers with vital and timely information. Speaking on the economic challenges and current economic environment of Sri Lanka, he said that the CB's Annual Report 2003 has identified the local economy as being at crossroads where a series of opportunities had been missed in the past. The country would be moving backwards and be a laggard if it does not seize the new opportunities available to it in an increasingly globalising world economy. This would be greatly facilitated if the peace process is also tied to it as an integral part. The fear of competition within the private sector is a natural human behaviour that needs to be countered. Companies need to move out, build connections with the world's economy and adapt themselves to the changing situations that throw up new challenges. As such, the economy needs to be opened out. Therefore the governments in the past have been opening the Sri Lankan economy selectively as an immediate full opening would wipe out the local businesses, he said. He said that some in the private sector seem to be unhappy about opening the economy, but one cannot expect to sell if he is not prepared to buy as well. Hence, he called upon the private sector to understand this need and play on both sides of the market." It is necessary for countries to plan forward and take cognizance of the changing environment. Those who fail to do so will live to repent since others would take leadership and reap the benefits. The Deputy Governor, summarised the message of the Singaporean government to its tertiary education sector in early 2000 as an example of that country's gearing to harness the benefits of globalisation. The Singaporean government had instructed its educational institutions to focuss on formulating courses in the new millennium on three main areas, namely, genetic engineering, information and communication technology (ICT) and entertainment. This is because in the coming century, these are the key areas that would give a country the status of world power and Singapore wanted a safe slot for itself along with the other world leaders. With regard to the country's economic status, Wijewardena said that all governments have been following a market based economy policy since 1977 and the new government is also committed to it with a slight variation. It has announced that its policies are basically pro-poor and would aim at concentrating on the development of the rural sector. It would not privatise state owned enterprises, but restructure them within state ownership. This is a different model to achieve the basic objective of having an efficient public sector. This would be achieved through the establishment of the Strategic Enterprise Management Agency (SEMA) based on the Singaporean Temasec model. As opposed to privatisation, the key areas would remain under government control with SEMA seeking to restructure them towards improving productivity and efficiency. Wijewardena pointed out that previous models had not met the aspirations of the people. Therefore, a new model is being attempted and a chance should be given to try it out. The Deputy Governor said that economic recovery efforts since 2000 would continue. The forecast for 2004 is that the economy would grow between 5% to 5.5%, slightly less than the growth rate of 6% in 2003. Inflation for 2004 would remain in the region of 6% to 7%. He hopes the Sri Lankan Rupee vs the Dollar would stabilise at the current levels. W. A. Wijewardena, Deputy Governor of the Central Bank, also holds the posts of Chairman, Institute of Bankers of Sri Lanka and Chairman, Sri Lanka Accounting and Auditing Standards Monitoring Board. |
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