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Government Gazette

Infrastructure development, key to addressing economic disparities

The Government is committed to investing heavily in infrastructure development so that the whole country can benefit from economic development, Enterprise Development and Investment Promotion Minister Dr Sarath Amunugama said. He was addressing the Sri Lanka Economic Summit 2007 held at the Cinnamon Grand Hotel. The text of Dr Amunugama’s speech:

Development is country’s progress

DEVELOPMENT: “Sri Lankans have benefited greatly from the investments made since independence in healthcare and education but that limited investments in physical infrastructure development had curtailed economic growth mainly to the western province.

Some year years ago when I was the Minister of Finance, we decided to shift the annual donor meeting to Sri Lanka. By all accounts, the meetings we have had in Kandy and in Galle last year were tremendous successes. And now that we have this summit, we need to make sure it is an annual event and held alongside the donor meeting.

Strong growth

As President Mahinda Rajapakse noted in the speech that was delivered by the Secretary to the President, Lalith Weeratunga, in spite of various challenges, the economy has registered strong growth.

Our goals now are two fold. Firstly, we need to achieve a macro economic grow rate of around nine per cent. Secondly, we need to ensure that the rapid economic growth rate we now see in the western province is spread to the outlying regions as well.

Currently, the GDP of the western province is growing at 11 to 12 per cent annually, on a par with the fastest growth rates in India or China. As a result of the decline of the unemployment rate in the Western province, some industries are already facing labour shortages.

One of the demands of the industrial sector to the BOI is to ensure that is has access to proper manpower. You may be surprised to find that there are labourers from China in some of the construction sites in the Western province.

Most of the developed economies are strongest in the services sector. The question is how do we go on from here. There are very positive factors. The world economy is on a growth spurt. It is the Chinese and the Indian economies that have powered global growth during the last five years and projected to do so in the next decade.


Sri Lanka needs to benefit from the growth of these economies. For example, the current edition of Newsweek magazine makes an interesting observation. The Indian middle class which is currently 50 million will expand to 500 million by 2012. India, in fact, is slated to overtake China as the fastest growing economy in the world.

Now add to this, the expansion of the middle class in Pakistan, Bangladesh and China, and you can fathom the opportunities in the Asian region. Sri Lanka is perfectly positioned to benefit from this growth.

Sri Lanka and India are the best of friends. We have always had a warm and cordial relationship. Both history and geography demand that we remain the best of friends.

And I can recall the words of our first Executive President who said that we in Sri Lanka are lovers of India and followers of its greatest son, Lord Buddha. As India leads the growth charge, we will do our best to complement that growth. We are fortunate to have a free trade agreement not only with India but also with Pakistan.

We are now in the process of negotiating a free trade arrangement in the South Asian region. So the advantages are tremendous. Our hub status will be a crucial factor in the next 10 years. We may be an island of only 20 million people, but we are just 20 miles from the fastest growing market in the world.

A market which will expand exponentially in the next 10 years. If this is not a glorious opportunity, I don’t know what is. Already, cutting age businessmen are leveraging Sri Lanka’s hub status. We have had a large number of inquiries on manufacturing and exporting out of Sri Lanka.

Sri Lanka is not just about free trade agreements. We have been internationally recognised for our high labour standards. Sri Lanka is the only country in the region to be granted the GSP Plus status by the European Union.

The EU concessions were granted not on political grounds but because of our ethical labour practices. Wherever in the world you go, you can be confident and proud that Sri Lankan business people are model employers. Also, Sri Lankan workers are model employees. Today if you look at an analysis of labour, Sri Lanka will be commended for its best practices by both the Government and the industry.

For over 60 years, Sri Lanka has invested a large part of its budget on social services such as education and healthcare. This is why we have done very well on the UN’s Millennium Development Goals. In fact, in some areas we are even ahead of many Western countries in the achievement of Millennium Development Goals.


Nobel Prize winning Indian economist Amartya Sen has hailed Sri Lanka’s investment in education and healthcare as the greatest investment in the Asian region in the last 50-60 years. In India, the state of Kerala too has made similar social investments. We are also proud of our programmes to benefits for the poor.

Today, western countries are tying to export the Millennium Development Goals to the Third World. The World Bank and the IMF should note that since independence, we have been pioneers in achieving these goals.

This is the background from which employers and employees should propel the country’s development. Lalith Weeratunga and I have led initiatives to introduce new technology, science and modern languages to our educational system.

All these huge investments have been our social welfare sector which has led to many advantageous. We also have disadvantages, however. This is why we are currently increasing the investments in physical infrastructure such as roads, ports, airports, the railways, power and water.

The western province has shown how rapidly Sri Lanka can grow when there is strong infrastructure. This is why we are investing significantly in developing the infrastructure in the regions so they too can attract quality investments.

Key benefits

We are aware that foreign governments and businessmen are concerned about the security situation in the country. That is something we cannot sweep under the carpet. Let me address the issues. The first point I want to make is that Sri Lanka is the only country is the world where every citizen, even those in areas which are not under the control of the Government, are given free food rations, free education and free health.

We are the only country in the world in a combat situation, where every single citizen irrespective of race, community or creed is granted key benefits. And they must all be proud to be citizens of Sri Lanka, whichever side of the curtain they may be located.

The Government makes every effort to ensure that the food is delivered on time, coming, teachers are present and punctual, that textbooks are available for studies. I don’t think there is a single country facing a terrorism menace that ensures the important needs of all citizens are met.

I want to tell you that even the Kilinochchi Hospital was built with Government funds. So don’t give the impression to the global community that this is some bitter and racist country. Nothing would be further from the truth.

There are also misconceptions about our constitution. Under the 13th amendment, we have granted the same powers of devolution to regions as India has under its Constitution. Having played a significant role in drafting the 13th amendment, I can assure you that ours is a carbon copy of Indian model.

Unfortunately, either these facts are not known to the diplomatic community in Sri Lanka or they make no effort to communicate the facts. Now we are in the process of examining whether additional powers can be devolved as the Government is committed to resolving the ethnic problem peacefully.

As the President noted in his message, the Government of Sri Lanka is fully committed to a negotiated settlement. Whatever the newspapers may say, whatever individuals may say, there is no other way. That is the view of the government. So you should not have any fears, that war will ever be a substitute for peace.

These are the realities and please make sure you communicate them to your stakeholders. And we need to use investments as an enabler to address economic disparities which have often been the root cause for the feeling of marginalization in the country.

I am glad that meetings such as this give you an opportunity not only to make a contribution to framing the country’s development policies but also to observe firsthand the situation in the island. Now the organisers of this meeting who have done such a wonderful job should ensure that this becomes an annual event.

Other countries have flower shows and this can be our power show. So please make this an annual event and let me offer my special thanks to the attendees from overseas. If you have any questions, please feel free to ask me.

This is a free country. We do not impose our views on others; we only want you to make up your own mind. Let us make a commitment to work together to benefit all Sri Lankans and may this summit be an annual event that serves our development goals.”


Gamin Gamata - Presidential Community & Welfare Service

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