'Some Western economic policies don't suit SL'

Ramani KANGARAARACHCHI

"Sri Lanka should not be guided by foolish economic policies designed by the West because some of them are not applicable to Sri Lanka," International Monetary Corporation Senior Minister Dr Sarath Amunugama said. He was speaking at the 60th anniversary of the Colombo Plan at Hilton Hotel, Colombo yesterday.

He said that Sri Lanka's economic plans and proposals are more effective than some of the International Monetary Fund (IMF) plans and suggestions.

Dr Amunugama said that some countries in the Asia Pacific region, like India and China, are in a position to challenge the policies that are not applicable to Asian countries and new developments are possible with such strong policies.

He said that economics is a global science and the role of the IMF is to find remedial measures for members experiencing balance of payment difficulties and promoting exchange stability through surveillance.

Referring to the basis of rapid growth, Dr Amunugama said Sri Lanka is standing tall despite not having the advantage of science and technology.

"People are Sri Lanka's asset while China has its population as well as technology and low cost trained labour as comparative advantages," he said.

Dr Amunugama said that 1.2 million Sri Lankans working abroad bring 4-5 billion dollars to the country and most of that has gone to develop rural areas while there is a remarkable growth in those areas.

"Asian countries began with a low base but now it has slowly changed. They are now registering eight to 10 percent growth from two to three percent maintaining sustainable growth. Comparative advantages are vital to fast growth."

Dr Amunugama said that India and China emerged economic giants during the last economic downturn and strong countries showed a negative impact.

"Although China is largely export oriented, western countries were diminishing their purchasing power. Then China started offering monetary facilities. The aid architecture started changing with this process and Sri Lanka borrows now at much lower rates for development projects," he said.

Minister Amunugama said that countries must get their macro economics right which is very important. He warned about a food shortage in the future and said all countries must look to grow and be self-sufficient. He stated that there is an energy shortage while water resources are going to be a problem.