Economy poised to achieve 8% growth

Shirajiv Sirimane

ECONOMY: With the successful peace negotiations Sri Lanka can easily achieve the 8 percent economic growth which was in the Mahinda Chintana manifesto, Deputy Finance Minister, Ranjith Siyambalapitiya said.

Sri Lankan economy accelerated its growth in real terms to 6.4 percent in the third quarter of 2005 compared with a growth of 5.5 percent during the corresponding quarter of last year.

In an interview with the Daily News , he said the economy is growing and with the peace initiative there would be more investments which would lead to more production and employment.

The Deputy Minister said one of the key areas towards achieving this target is to make sure that foreign aid is utilised in a more responsible and productive manner. At present the foreign aid utilisation is around 30 percent.

"The government will ensure that this would be brought up to 80 percent by the end of the year," he said.

He said the President has directed to call up monthly progressive meetings with officials of the relevant Ministries and this would automatically create a check and balance system with regard to transparency and maximise the foreign aid utilisation.

He said the US millennium development fund has pledged to increase assistance for Sri Lanka and the government would use this to develop underdeveloped areas. "We have selected Hambantota, Ampara and Kegalle and priority areas and there would be industrial zones established in these areas," he said.

Another reason to select these areas was the availability of raw material in abundance. "The establishment that would set up business in the proposed industrial zone would utilise them and export for US and other countries," he said.

Another priority of the government is to ensure that the income generation is equal in all provinces. "This was the main reason to launch 300 factories programme," he said. State banks have separate credit schemes to assist entrepreneurs who want to come under this scheme.

There are over 40,000 vacancies in the state banking sector and other institutions. "We will be conducting an examination to select suitable candidates to fill these vacancies within the next three months," he said.

He said opening the CWE and Kabool Lanka are still major challenges for the government. "The Kabool management is in debt over Rs. 10 billion to banks and the most of the machinery cannot be re-used. In addition back wages amount to around Rs. 27 billion and re-opening this is a major challenge," he said. Siyambalapitiya said that the government should be competitive in the retail market and CWE was the answer to this.

However, the government has to invest around Rs. 450 million to settle consortium and in addition a further Rs. 300 million is needed to pay the CWE suppliers.