Despite many global repercussions:

Galloping development in many spheres

Sanjeevi JAYASURIYA

The fourth anniversary of the assumption of office of President Mahinda Rajapaksa was held November 18. Daily News interviewed Finance Ministry Secretary Dr. P.B. Jayasundera. Here are his comments on the country's four year progress.

The four year period of the President's administration progress is in several fronts apart from security.

Rapid progress in implementation of infrastructure at the time the President took office was necessary and the country was demanding infrastructure in ports, power, highways, waste disposal and aviation. This was same at national level as well as provincial and the rural levels where infrastructure has been neglected and rural economy was lagging behind in economic development. When President Rajapaksa assumed Office he had to address these issues.

The most pressing need was to raise money for these massive infrastructure development activities and to ensure that these projects were implemented fast. The President had the task to balance infrastructure development and to carry out the equally important fight against terrorism. Today we have a success story.

Not only defeating terrorism, but the construction of Puttalam Coal Power Plant, Hambantota Port, islandwide road network and Colombo- Katunayake expressway, very expensive and strategically important bridges and flyovers, electricity distributions, water schemes to ensure drinking water, long overdue Moragahakanda and Uma Oya irrigation projects and 14 other major irrigation projects such as Deduru Oya were carried out during this period. The development of economic infrastructure was equally matched by other infrastructure facilities such as convention and administration centres in many cities, performing art centre, international cinema and tele drama studio.

Various activities have got off the ground and are in the final stages and could be used by the public by mid next year.

At the provincial and the rural level, road expansion and electrification are in progress with the aim to provide electricity for 85 percent of the country's population. Projects are being carried out to provide quality drinking water and pipe borne water and to provide telecommunication facilities.

The biggest progress was the islandwide expansion of infrastructure development connecting the entire country to explore its economic potential through infrastructure development.

The importance of agriculture development placed by the Government is evident in the food security. Policy framework theme accorded a significant role in our development program. A comprehensive approach was adopted to provide fertilizer at an affordable and stable price for farming community, concessional credit, agricultural marketing facilities, incentives for post and pre - harvest agriculture practices, attractive and remunerative prices for key agriculture products such as paddy, potato, maize, onion and incentives for large investment, incentives for agricultural exports and irrigation projects.

The Government was blessed with weather being absolutely favourable. Today the stock of paddy the country has if internationally priced is worth US $ 2,000 million because the country was able to grow its staple food in Sri Lanka. The country need not spend on import of rice and manage to provide food security whereas the world went through a major food crisis.

The country was importing its entire requirement of animal feed and most depended heavily in import of wheat flour and milk powder. The Government gave incentives for local farmers and removal of subsidies given to importers during the four years resulted in progress of local products. The Government has also make progress by increasing the local maize production up to 50 percent of the country requirement. There is also increase in investment now taking place in local dairy and poultry industry due to the policies implemented when the President took office.

At that time the country's agriculture and even agriculture based industrial activities were neglected. For example, the country did not have adequate milling capacity and the small millers were neglected. The large scale millers did not have machinery and equipment. There were no storage facilities. During the past four years the Government gave import facilities to the rice processing millers to import machinery and equipment to encourage rice processing industry in the country. The millers who had debt problems could not expand their business activities and hence all the debts were re-structured to develop the milling industry and similarly milling and processing aspects of animal industry too was developed. Tea factories were modernized and food processing companies were developed. There was a significant boost in the agri based industries. The Sri Lankan economy could proudly speak of development of local entrepreneurship of every sphere of activity. The domestic value addition was improved with widespread incentives to promote local entrepreneur initiatives in the country.

The commitment to expand education and health service by recruitment of doctors, nurses and other supportive staff in the field of health and recruitment of teachers in the field of education are noticeable. The modernization of schools and health infrastructure are yet another facets of development in the past four years.

The University intake has increased to 20,000 and the President directed to upgrade the facilities of existing universities particularly located in distant areas.

Recognizing a major difficulty in our system of education a new university for vocational studies and training colleges for other skilled categories has been set up. A degree offering program has been designed for nursing education in the country.

All in all in the field of education, the four year period has promoted Sri Lanka towards a knowledge and skilled based economy. English and IT have been recognized as a major investment in education reforms. The rural areas have been equipped with IT institutions and a large number of Nenasala Centres have been set up.

The public service in the country at the time this Government took Office was at a fragile state. There was wide range of salary anomalies. The institutions were run down.

There was no recruitment and training of staff and vital areas such as field level services were grossly neglected. It was a huge time consuming and a costly exercise to revitalize the public service.

In spite of other challenges the President appointed a Salary Commission to provide salary structure recommendations and to provide other facilities of training, housing, vehicles, modern office buildings, computer facilities. In fact, in addition to almost 100,000 recruited to the public services in various fields such as teaching, medicine, tax and civil administration, planning and various other technical grades salaries have been revised virtually by 100 percent.

The lowest ranking employee in the Government services now gets Rs. 11,670 per month plus Rs. 4,500 COL allowance in comparison to around Rs. 8,000 in 2005.

The welfare aspect of the public sector too was addressed. Prior to 2005, only 5,000 housing loan applications could be provided by the Budget, but during the past four years through the banking system nearly 35,000 housing loan applications were entertained and a further 15,000 are being processed to be completed by December this year. More progress was in the area of market intervention to safeguard the lower-end of our consumer society.

The closure of the CWE, Paddy Marketing Board, run down in the co-operative system has reduced market access to small income households. During the past four years steps taken to reactivate the co-operative system, establish 300 Co-op cities and outlets, expand the number of dedicated economic centres up to ten to provide essential consumer goods at affordable prices to lower income groups.

Sri Lanka's economy was placed on a growth rate of six percent during this four-year period except for three quarters of 2009, due to global recession and its adverse consequences in the Sri Lankan economy.

During the four year period, the Government was able to raise foreign reserves in excess of US $ 5.5 billion.

The country was able to perform well because of good export growth, massive remittance inflow and foreign investment. Foreign Direct Investment (FDI) on average increased to US $ 750 million per year.

The foreign investors place confidence on Sri Lankan Government treasury bonds. They have selected Sri Lankan treasury bonds like any other Government foreign securities as their investment.

As a middle income country, Sri Lanka has also been able to show its active presence in the international capital market. Both issues of Government bonds of 2007 and 2009 were oversubscribed. The Rating Agency has given a strong positive economic outlook in the middle income rating.

The economic outlook in the post war regime has improved considerably after defeating the LTTE. The prospects in the tourism, foreign investment, capital market and development of agriculture, fisheries, industries and wide range of services activities have continuously increased. The outlook in the tourist sector demands the creation of an additional 14,000 room capacity to augment the country's present accommodation facilities for tourists.

This alone will boost the prospects of the construction industry. It will also demand a wide range of skills and property development.

The country's remittances income was raised from US $ 1,500 million to US $ 3,200 million. The country's per capita income was raised from US $ 1,000 to 2,000 and poverty declined from 24 percent to 15 percent, unemployment declined to 5 percent and inflation recorded low level of 5 percent.

All in all, it was a success story under the difficult global and domestic environment.