The
commendable economic growth of 7.4% achieved last year
despite an unprecedented series of obstacles is no accident.
It is a result of careful planning and efficient implementation,
said President Mahinda Rajapaksa, at the presentation
of the 2006 Annual Report of the Central Bank today (March
30).
The main challenge faced by the county for the last 30 years
is terrorism in the North and East and the search for
a political solution to it. In addition, the country
had to face rising fuel prices and natural disasters.
During the last year the Government's policy was to
fearlessly combat
terrorism and develop the economy, without making terrorism
an excuse to delay development, the President said.
President Rajapaksa said:
"Our achievements in both these
fields - combating terrorism and developing the economy
- demonstrate the success of our defence and economic
policies.
"If we are to raise the living
standards of our people to match those of the developed
world even to some extent, it is essential to maintain
an average growth rate of 8% for the next five years.
Our Ten Year Plan is prepared with this target in mind.
"While bearing the burden of
a destructive war, we have already launched several
development projects. Among them are power generation,
road development, and ports and airports development
projects. By improving infrastructure in this manner
we expect to attract foreign investment and raise productivity,
and by this create the background for sustainable economic
development in the future.
"Among the special projects
launched in this connection during the last year are
"Maga Neguma" (Road Development), "Gama
Neguma" - developing 12,000 villages, 300 industries
under "Navodaya" and mega irrigation projects
including the Moragahakanda Reservoir, highways linking
the city and village.
"What we expect from this is
to extend development to all regions of the country
which was hitherto confined to the Western Province.
'It is a cause for satisfaction that
we have been able to reduce the incidence of poverty
to nearly 20 %. At the same time our per capita income
which was US$ 1,197 in 2005 has gone up to US$ 1,355
in 2006 thus consolidating our position as a middle
income country.
"For sustainable economic development
the active participation of the workforce and its productivity
is critical. At present the workforce in the State sector
is 1 million. The majority of our workforce - nearly
7 million, is in the private sector. As a matter of
policy we do not have any liking or expectation to privatize
state institutions. However, we see no purpose in maintaining
State institutions by using public funds to subsidize
them. Instead of that, we call upon everyone to raise
the levels of efficiency and productivity in state institutions
and thereby contribute to future economic development.
"In the past few years what
was expected by the large increase salaries in the State
sector was to raise the level of efficiency. We already
notice some good results from this with this Annual
Report of the Central Bank being presented one month
ahead of the legal schedule.
"At the beginning of this
year the Government appointed a National Economic Council
(NEC) to find solutions to current and principal economic
issues facing the country. This is not just a formal
Council. It meets fortnightly and had eight sessions
so far. During the past few months we have taken urgent
measures through the NEC to control inflation, which
has been a major challenge. Central Bank expertise has
been very helpful in the NEC. I believe the results
of these measures will be seen in the next two months."
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