Lanka resilient to global crisis

- WB Country Director

Hiran H. Senewiratne

Sri Lanka is resilient to the global crisis and has many opportunities for social safety net programs, said World Bank Country Director for Sri Lanka Naoko Ishii.

“South Asian countries have taken various policy measures in response to the global financial crisis. However, further action will be needed to reduce the impact of the crisis,” Ishii told a seminar on “The Global Economic Crisis and Sri Lanka”. It was organised by the Institute of Policy Studies of Sri Lanka.

She said that this crisis is not the end of capitalism but it is a failure of a regulatory framework to combat future challenge, which worsened the global financial crisis resulting in difficulties in the macro economic sector.

Therefore, a policy discussion is important for South Asian countries to reduce the adverse effects of the financial crisis and prepare the way for a resumption of rapid growth in 2010, she said.

Ishii said that the current global crisis reduced the growth levels in developed countries, while it will increase poverty levels in developing countries considerably. Following the global crisis more than 46 million people were added to the poverty list in developing countries. Currently over 155 million people live below the poverty line in developing countries, she said. The global financial crisis hit South Asia at a time when it had barely recovered from the severe trade shock resulting from the global food and fuel price crisis. The food and fuel price shocks had badly affected South Asia.The current account and fiscal balances have worsened and inflation has surged to unprecedented levels in those countries, she said.

Minister of Public Administration and Home Affairs and Deputy Minister of Finance Dr Sarath Amunugama said that the current global crisis has created many opportunities for developing countries such as Sri Lanka.

“Following the global crisis the prices of oil had come down drastically, which is a plus point for the entire local agricultural sector. Therefore, the government has given much emphasis in this area,” Dr Amunugama said.

He said that the highest number of river basins is in the Eastern part of the country. Therefore, the time is opportune to promote the agricultural sector and other infrastructure projects in the country to face the global challenges.