I am greatly pleased, both as Minister of Finance and Head of State of Sri Lanka, to participate in the release of this latest Annual Report of the Central Bank of Sri Lanka.
This is the fifth occasion when I have come to receive the Central Bank’s Annual Report. Although the Central Bank is a place I am very familiar with, there is a noticeable difference today in the social and economic environment that prevails from when and where earlier. We live today in an environment that is more free and prosperous and than in the past, as well as where Sri Lankan individuality is protected, and the national cultural aspects greatly embellished. We are today in an environment where economic progress moves together with ethical values and the protection of a green and sustainable Sri Lanka.
While we 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, we have arrived here after a period of great challenge. In 2005, the gross National Income of the country stood at a little over USD 1000. There were many problems facing the country. It was not possible to have a clear image of the country’s future. The number of people leaving the country, the businesses being closed, the investments being taken away, the rising payments for insurance coverage, the reduction in marker relations, the gradual reduction of the coastline and narrowing of our territory were all taking place, together with the daily decline in the value of the rupee, as well as increasing corruption, highway robberies, crime and other violence that went together with terrorism, that cast frightening shadows on the country where no clear forward vision could be worked out on a long-term basis in any sector of the country.
Due to terrorism that prevailed for more than three decades that led to a background of political instability saw a rise in the levels of one employment and poverty, and also pointed to the necessity for large scale infrastructure development. Taking the entire economy as a whole what could be seen was an environment of great instability.
Our main challenge was to achieve a high level of development that would bring suitable returns in the short time to all sectors of society. In the past, the solutions to the country’s problems were sought within the context of a foreign framework. As such we had to accept solutions that were suitable to those countries.
We observed that a large sector of the economy was in the rural sector. Although, a very large section of the population live in this rural environment and the employment of a large segment of this population was in agriculture, the major benefits of the country’s economy were distributed in the urban sector. Therefore, we realized that if the benefits of the economic progress are to be distributed among large sections of the population, we should look for solutions that are based on social foundations that give due recognition to our national and indigenous feelings and culture, and protects our national identity.
It is on this basis that we launched a large number of massive 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 us to launch a 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 habour.
We also took action 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 programs such as Uthuru Wasanthaya for the development of North and Nagenahira Navodaya for the East.
All of these development tasks had to be initiated and carried out while setting apart a large amount of national assets for the eradication of terrorism. In addition to threats faced by every sector of the economy from terrorism, we also had to repeatedly face the challenges of floods, droughts, and the global financial and economic crises. You are aware that overall impact of each and all of these crises were unprecedented in the history.
We successfully faced up to all of these obstacles. As a result of proper management of the battle against terror, we were able bring to an end a war that lasted through three decades. Similarly, with limited assets we were able to properly manage the economy. In the midst of many obstacles, from the year 2005 we have seen an unbroken economic growth of 6% or more. Prior to they year 2005 never in our records was our country able to achieve an economic growth rate in excess of 6% in two consecutive years. What is necessary for a rapid economic growth is to maintain a high level of economic growth through several years.
In the year 2009, when the world economy saw negative growth, developed and strong economies were crashing, some emerging economies were declining, we were able to achieve a moderate growth rate of 03.05%. As the Central Bank states in its latest annual report, in the last quarter in 2010 Sri Lanka was able to achieve a growth rate of 8. 06%.
In 2010 our economic growth was 8%. The achievements we have gained by now are great. We have today arrived at a time when the country's economic indices are at a high level never seen in our history and stepping into a period of great prosperity. The entire population showed great cooperation and commitment in achieving this economic success. I am truly grateful to all of you for this.
Our expectation is to raise per capita income in our country to USD 4000 by 2016. The per capita income that was USD 2053 in 2009 had risen to USD 2400 in 2010. This shows that we have already achieved considerable progress. Accordingly, it is clear that achieving our targets will not be a difficult task.
Together with this we have now achieved commendable successes in our economy by having a historically high level of our foreign reserves, the low level of interest, a low percentage of unemployment, the lowest level of poverty; going above the targeted level of government revenue for the first time, the annually declining ratio of government debts and budget deficit, as well as the declining rate of inflation that is been maintained on a long term basis. These can be considered major national gains.
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.
Therefore, I am happy that we are today able to carry out these tasks. Similarly, we are pleased that we are now able to spend the funds that were earlier used to fight against terror for the development of the country and its people. I express my gratitude to all those who contributed to the preparation of this valuable report and wish all of you a Happy and Prosperous New Year.