OPA holds Annual Conference

Ramani KANGARAARACHCHI

The most effective way of reducing the investment savings gap would be foreign investment and increased foreign borrowing should not be considered in any way a substitute for it.

Speaking at the inaugural session of the Annual Conference of Organization of Professional Associations (OPA) President Prof A D V De S Indraratna said that foreign borrowing is accompanied with a burden of payment of interest and capital refund increasing the debt service ratio.

He said that Foreign Direct Investment (FDI) on the other hand comes without any burden, but often with the added advantage of technology transfer and birth of new or niche markets. He hoped that the Presidential Task Force will soon come out with remedial measures to resolve this impasse.

Prof Indraratna said that to achieve a growth rate of 8-10 percent in the next five years, a gross investment of 34 percent to 42 percent is necessary with the prevailing level of efficiency or productivity of country's investment.

But it is difficult to sustain that growth with the present rate of domestic savings of 17 percent unless there is doubling of level of efficiency.

To increase productivity a host of measures must be implemented such as enhanced physical and social infrastructure, good governance with law and order and without waste and corruption, a competent and independent public service and efficient public institutions, he said.