Fiscal discipline paid rich economic dividends

Dharma Sri Abeyratne

Sri Lanka has maintained significant economic growth at an impressive pace while the economies of most countries were crumbling, President Mahinda Rajapaksa said. "Our achievement was due to the government's commitment towards continued fiscal discipline," he said. The President was addressing a gathering at the Central Bank yesterday organised to release the Central Bank Annual Report 2012.

President Rajapaksa said, despite the global economic downturn the country was maintaining a notable economic growth. In the post-conflict 3 year period from 2010 to 2012, the economic growth averaged an impressive 7.5 percent. The highest ever 7 year period average growth of 6.7 percent was observed during 2006 to 2012.

He added that it is notable that inflation has been maintained at single digit level for 50 months while most countries have been caught up in the global financial uncertainty. Besides, the per capita income has shown a gradual increase annually.

The President said that this is the seventh occasion he came to receive the Central Bank's Annual Report. People live today in an environment that is more free and prosperous than in the past. They are today in an environment where economic progress moves together with ethical values and the protection of a green and sustainable Sri Lanka. People live under conditions that have an impact on the present and future conditions of our people that can bring about productive changes in all sectors

The President noted that during the period of terror people were reluctant to come to the Central Bank since it was highly vulnerable to a terror attack. Now the country is placed in a comfort zone after a period of great challenge and great sacrifices. There were many problems facing the country. It was not possible to have a clear image of the country's future.

Due to terrorism that prevailed for more than three decades, the country has been lagging behind in many spheres. Taking the entire economy as a whole what was witnessed was an environment of great instability.

"Our main challenge was to achieve a high level of development that would bring suitable returns to all sectors of society. Due to the economic sanctions imposed on certain countries such as Iran, the countries especially the smaller countries have to suffer. Sri Lanka has also been victimised in the sanctions imposed on Iran since Sri Lanka has to pay more for importing fuel. Therefore, the President noted that the countries which impose sanctions on other countries have to think of the outcome and the negative consequences of those sanctions.

It is observed that the country has been placed on a rapid development drive. The government has launched a large number of mega development projects that will bring benefits to all sectors of society. Accordingly, the road network was developed giving due priority to the national, provincial and rural needs. This also enabled the government to launch large infrastructure development projects such as Norochcholai thermal power plant, the Ruhunu Magampura Port, the Colombo-Katunayake expressway , the Southern expressway and the expansion of the Colombo harbour.

Moreover, the government also took speedy measures to develop agriculture, the fisheries sector and the small and medium industrial sector and launched large provincial development schemes bringing considerable investments to key sectors of public needs such as housing, drinking water, power, schools, health facilities and education. We also activated important development programmes such as Uthuru Wasanthaya for the development of North and Nagenahira Navodaya for the East. For these two programmes for the overall development of the North and East, the government allocated more than Rs 214 billion so far.

"We successfully faced all these obstacles. As a result of proper management of the battle against terror, we were able to bring to an end a war that lasted through three decades. Similarly, with limited assets we were able to properly manage the economy.

I believe that we must all work with great commitment to take these victories forward. Our expectation is to take the assets of this city to the village and to wipe out the gap between the village and the city. In order to provide the same benefits enjoyed in the city, the village should be our singular target, the President said.