Real Growth Rate Not Reflected In Central Bank Report
By Chrishanthi Christopher
Sri Lanka is not realizing its post war dividends and the Central Bank figure of 8.3 per cent GDP in its Annual Report 2011 is far too low for a post war country,” says an eminent economist.
At a forum organized by Friedrich Ebert Stiftung where economists gathered to debate whether Sri Lanka is realizing the full potential of the peace dividends post war, Point Pedro Institute of Development Principal Researcher, Dr. Muttukrishna Sarvananthan says that judging from the Central Bank’s figures the country’s economy has not progressed as expected in the last two years.
Saravananthan cites countries like Afghanistan and Mozambique which after emerging from a war had shown immense growth and had recorded GDP in double digits. “Of course these countries are not better off than Sri Lanka yet but post war they have doubled even trebled their GDPs” says Sarvananthan.
He debates on the GDP figure drawn by the CB for the northern province and says that 23 per cent GDP for the Northern Province is highly inflated.
He says that the figure does not reflect the real growth rate in the Province.
“In the north after the war markets opened up and the demand for goods increased and there was growth. The same thing happened during the ceasefire period 2002 to 2004; this does not reflect the actual growth” says Saravananthan.
“There is a lack of sustainability and a structural weakness in the north and east and 53 per cent of the northern economy is due to government services,” he adds. Sarvananthan maintains that the decomposition of provincial data is only available for the year 2009 and that too with the war on for more than half the year.
“There are no specific modalities to calculate the growth in the provinces,” he says.
There is no manufacturing sector, no banking, no infrastructure only construction and public service in the north. “The Northern province has the lowest per capita income in the island,” he says. However another speaker in the panel Rohantha Athukorala, Former Chairman, Export Development Board was all upbeat on the post war economy and says that the Sri Lanka has done well even with the war on.
“Our apparel exports have catapulted to 3.4 billion, tourism is doubling, and the tea industry has hit the 1.5 billion mark”. “Judging by these figures many people ask me whether we had a war on for 30 years,” he says. “Our private sector is aggressive and our rural growth is picking up,” he adds.
The last speaker Chamber of Construction Industry, CEO Dakshitha Thalugodapitiya called on the northern populace to enjoy the dividends of the post war period. “The key dividends must be enjoyed by those who suffered the 30 year old civil war,” he says. He says the reconstruction process in the north has become a ‘gold rush’ for both local and foreign contractors but the people affected do not participate. Thalugodapitiya called on the government to adopt a national policy on reconstruction where even SMEs can participate and reap the benefit of the post war peace.