GDP growth reasonable - ESCAP

Wijitha NAKKAWITA

Though the impact of the global economic slowdown came to be felt during the last quarter of 2008 in the South Asian region its adverse consequences were felt more by the strong export oriented economies like Japan, China or South Korea.

Despite some of adverse factors like high oil prices and unprecedented food prices the GDP growth in Sri Lanka was reasonable at 6 percent with agriculture contributing a considerable percentage to economic development, Economic and Social Survey of Asia and the Pacific 2009 released yesterday by the UN Information Centre, Colombo at the Sri Lanka Foundation Institute stated. Introducing the ESCAP report Deputy Director Institute of Policy Studies Dr. Dushini Weerakoon said high oil prices, increased cost of food and global climate changes like cyclones also affected the economies of the Asian region but Sri Lanka had been able to remain without feeling the shock though there were continuing problems like wide budget deficits and inflation. However the balance of payment problem was addressed by borrowing and the 1.9 billion rupee IMF loan would offer some relief against reduced foreign reserves.

Senior Lecturer of the Department of Economics of the Colombo University Dr. Srimal Abeyratne said the ESCAP report for Sri Lanka did not find our economy at a dangerous level but there were long term economic and fiscal policies that had to be implemented for a sustained economic growth to be achieved.

The policy of sending unskilled women and men for employment in the West Asian region did not reflect that our economy was progressing though foreign remittances of Rs. 2.5 billion was sent in to the country by the expatriate workers.

Dr. Abeyratne said during the past three decades even with the open economic polices pursued by successive governments the total foreign direct investment was US$ 3.5 billion.

There was the need to invite foreign investment and the Government also had to address the urgent problem of developing the the Eastern and Northern regions liberated from the terrorists on a priority basis. However the development of agriculture had prevented the escalation of food prices though modernization of agriculture and employing a bigger percentage of the youth in this sector should be implemented in the long term, he said.