cloud over growth estimates for 2004
analysts believe the political turmoil which began in November last
year is likely to affect the GDP estimates for the fourth quarter of
year 2003 and hence affect the estimated figure of 5.5% growth for the
year, but have a bigger bearing on estimates for 2004.
Central Bank of Sri Lanka (CBSL) had projected a GDP growth rate of 6%
for 2004. Chief Executive Officer, Citibank NA, Kapila Jayawardena
pointed out that the full impact of the political crisis triggered in
November last year would be felt only in the current year.
expansion in investment will ultimately depend on factors such as
political stability, securing a lasting peace to the civil conflict
and further improvements in macro-economic management. "There is
a possibility that the growth rate will fall short of the estimated 6%
growth due to delayed investment decisions," said Jayawardena.
he noted that a stable government coupled with a peaceful atmosphere
would definitely see the achievement of a 6% growth in GDP.
speaking to The Sunday Leader, Deputy Governor, Central Bank of Sri
Lanka (CBSL), W.A. Wijewardena said, "The GDP estimates are
unlikely to change and will remain at 5.5% for 2003,"
notwithstanding the developments in the last two months of the year.
refrained from making a comment on the GDP forecast for 2004, stating
that it will have to be made only once it is adequately researched.
Bank figures show that
Gross Domestic Product (GDP) had recorded a growth rate of 5.6% for
the third quarter of the year 2003.
estimated GDP figure for
the year 2003 is 5.5%.
according to Central Bank statistics, the estimated per capita figure
for year 2003 indicates Rs. 91,762, which is a 10% increase as
compared with the figure for 2002 of Rs. 83,380. The per capita rates
from 2000 onwards have shown a constant growing trend of at least 10%
to the CBSL, the growth achieved during the past two years reflects
the positive response of the economy to improved macro-economic
conditions prevailing since the latter half of 2002.
points out that the main contributory factors to this recovery were
the continuation of the ceasefire and the peace initiative, improved
macro-economic management with greater fiscal discipline, declining
interest rates, a stable foreign exchange market, falling inflation
amidst prudent monetary management, increased capital flows, strong
foreign donor support, improved business confidence and recovery in
the world economy.
stated that the 5.5% GDP growth was also supported by the 10% increase
in exports in the year 2003 in US dollar terms compared to the
contribution from the agricultural sector in terms of good harvests in
the yala season and all other agricultural products other than
coconut, helped to sustain the growth rate," Wijewardena
factor pointed out by Wijewardena that facilitated the maintenance of
a stable growth rate was the significant increase in private sector
credit, which grew from 7% in 2002 to 17% in 2003, mainly due to the
low interest rates. This situation resulted in building up an appetite
for investment prompted by cheap borrowing rates.
mixed economy" - UPFA tells JBiz
United People's Freedom Alliance (UFPA) told the business community
that it promotes 'a mixed economy with a ban on importing unessential
goods,' at a presentation and discussion of its national, economic and
social programmes held last Tuesday.
the business community that attended the programme was not left
particularly reassured on the economic and trade policies that will be
adopted by this new alliance. Speaking to The Sunday Leader, Chairman,
Joint Business Forum (J-Biz), Mahendra Amarasuriya said, "The
discussion failed to deliver an in-depth understanding of their
policies due to the time restriction. Even to the question raised on
the FTA with the United States, Dr. Sarath Amunugama could not respond
because he was not familiar with it." However the alliance had
stressed on in-country production and the protection of local
to The Sunday Leader on the 'mixed economy' policy, Commerce Minister
Ravi Karunanayake came out strongly, referring to it as a "recipe
for disaster," where the economy of the country was concerned.He
pointed out that the outcome of a union between a communistic oriented
party like the JVP and of one that supports open economic policies as
the PA would not be healthy.
order to bring about more clarity in the policies that will be adopted
by the various parties, the J-Biz has forwarded a comprehensive
questionnaire to the President and the Prime Minister.
stated, "Until there is a reply to the questionnaire, it is
difficult to form an opinion on the policies of the Freedom
Bank Group tops Rs.1 bn mark
Seylan Bank Group has reported a profit after tax of Rs.1.026 billion
for the financial year ended December 31, 2003. The past year's
profitability reflects an increase of 5 % over the figure of Rs.0.977
billion recorded the previous year.
bank's new Director/General Manager/CEO, Ajita Pasqual said the bank
was able to achieve this level of growth and also improve on the
previous year's performance even despite the difficult conditions in
the country and the turbulent financial markets experienced
was a significant contribution from both banking operations and as
well as treasury functions, with the result that the bank alone
recorded a profit after tax of Rs. 699 million, which reflected an
increase of 4.7% over the figure achieved a year ago.
bank's subsidiaries, Ceylinco Seylan Development Ltd. and particularly
Seylan Bank Asset Management Ltd., and Seylan Merchant Bank Group
contributed significantly towards the overall profitability of the
group because of improved market conditions enabling these
subsidiaries to take advantage of the emerging opportunities.
analysis of the group's overall figures reveals that its deposits have
increased by 13.22%, while advances have grown by 15.57%. The bank's
results reflects an overall reduction in cost/income ratio from 68.75%
to 59.39%. The return on equity of the group shows that profitability
has decreased from 30.87 % to 20.00 % as a result of the bank's issued
co-chairs call for resumption of talks
co-chairs of the Tokyo Conference on Reconstruction and Development of
Sri Lanka, that is the United States, European Union, Japan and Norway
met in Washington on February 17.
to a statement released by the co-chairs, the group while being
appreciative of the fact that the parties have largely upheld the
ceasefire in Sri Lanka for two years, called for the earliest possible
resumption of peace talks, which have been suspended since April 2003.
co-chairs expressed their disappointment at the breakdown of
'cohabitation' efforts. They called on all political figures to work
to ensure that parliamentary elections scheduled for April 2 are free,
fair and peaceful and conducted in an atmosphere free of political
violence throughout the country.
co-chairs reiterated their continued determination to implement the
assistance pledged at the Tokyo Conference, based on the principles of
the Tokyo Declaration, which makes clear that assistance by the donor
community must be clearly linked to substantial and parallel progress
in the peace process. The co-chairs hope to convene a meeting at an
early date after the elections.
mark 150 years
cream of our youth shuns the plantation trade despite the many
benefits the plantation industry offers. This is a serious concern
amongst the plantation industry today because if we do not find the
right managerial youth to head the plantation industry, the Planters
Association is going to fall flat very soon."
Planters Association of Ceylon, Rohan Fernando expressed these
sentiments at the 150th anniversary celebrations of the Planters
Association, last week.
guest at the event, Prime Minister Ranil Wickremesinghe in his speech
said the plantation industry had to be changed into an agro based
industry with value added products to reach international competition.
plantation industry must be replaced by agro business, with people who
are willing to take the risk because only if risks are taken can
results be achieved," the Prime Minister stated.
added that in the 21st century, more agricultural products had to be
produced in order to modernise the economy.
Prime Minister also said that tea was the drink of the 21st century
and it certainly had a future, but Sri Lanka had to make it
competitive in the global economy. "The US introduced coffee ice
cream and the Japanese introduced green tea ice cream. By introducing
these flavours they have managed to build up a taste for green tea and
coffee amongst its people. What has Sri Lanka done other than develop
the teacup?," said Wickremesinghe.
added that creating the right environment for investment was no longer
in his hands but that it could be done in a few weeks time.
to 50 years ago, today the plantation industry has become less
competitive internationally. However, it continues to be an important
sector in Sri Lanka's economy.
said that over the years, planters have faced several tragedies,
numerous problems and natural calamities, but had managed to overcome
them. According to Fernando though there had been an increase in
growth in the plantations sector over the years, there was also a
decline in competitiveness.
commemorative stamp was issued along with the launching of a book by
the MJF Group to mark the 150th anniversary of the association at the
end of the ceremony.
professionals meet at 'Colombo Conclave'
joint conference titled 'The Colombo Conclave' by INSOL India and
Business Recovery and Insolvency Professionals of Sri Lanka (BRIPASL)
was held last weekend. The theme for the conference was 'Balancing
Recovery, Restructuring and Liquidation -The Emerging Challenges In
Asia.' INSOL India is an
association of the members of the legal fraternity, chartered
accountants and other persons, bodies and institutions desirous of the
development, diffusion and advancement of law relating to insolvency
and other fiscal laws.
association conducts research, holds seminars, conferences, workshops
and discussions for development and growth of the law relating to
insolvency and related laws in India. It also undertakes comparative
studies of legal developments in other countries in cooperation with
persons, bodies and institutions in different parts of the world.
INSOL India is a member association of INSOL International.
has been established less than a year ago, with the objective to
promote and play a leadership role in connection with and in relation
to corporate turnarounds and insolvencies in Sri Lanka. "We hope
to provide the necessary skills and services that will resurrect
businesses and industries that have fallen into difficulty,"
stated President, BRIPASL, Nivard Cabraal, addressing the gathering at
the inaugural session.
of BRIPASL include legal experts, chartered accountants, bankers and
other professional from different jurisdictions. BRIPASL recently
became a member association of INSOL International.
confrontational attitude of the President has come under heavy fire
from investors and analysts, saying it is a compromise of principles
for political survival and the President should realise that there is
nothing called a free lunch - it's the tax payers who bear the burden
for extravagant tastes and irresponsible action by our leaders.
fact, she gave full vent to her frustration by dissolving parliament
and giving absurd reasons for the dissolution, virtually sealing the
fate of cohabitation between the legislature and the executive even at
a future date.
all know she wrote to the Speaker on August 21, 2002 stating that she
would not dissolve the present parliament unless the party which
presently commands the confidence of the House loses its majority and
an alternative government cannot be formed from among the members of
the present parliament.
people in the private sector feel that the President missed a golden
opportunity to co-exist with the UNF and that she should have struck a
JVP-style deal with Ranil to support the UNF government while
remaining outside it.
in fact want to know why the President did not display the same
patience she had with the JVP when it came to the UNF. Now that the
President is on the war path with the UNF, the most important thing
for the UNF according to analysts is after the election to implement
or support a common programme with the PA to pull this country out of
this current mess.
all know that our economy was in shambles in 2001. We recorded a -1.5%
GDP growth for the first time in the post independence history of our
country. The election in 2001 offered a respite to the people - under
the UNF the economy grew and a ceasefire was established. The economic
growth was fueled by lower interest rates, a stable rupee and
is no doubt that the President's action dealt a severe blow to the UNF
development plans, especially the infrastructure development plans.
The plans envisaged an increased investment in roads, highways and
power projects. These projects according to the UNF would have been
funded through the $ 4.5 billion pledged at Tokyo.
implementation of these projects would have created an enormous amount
of job opportunities. It seems the JVP outfoxed the UNF and blocked
Ranil from cohabiting with the President. Sadly we have only succeed
in turning the clock back two years.
one thing is clear - the private sector, the engine of economic
growth, is not happy with either the PA or the UNP for missing a
golden opportunity to work together to find a way out of the November
even though the political uncertainty that had gripped Sri Lanka has
come to an end with the dissolution, as far as the private sector is
concerned, the shotgun marriage between the PA and the JVP has raised
fears of new unfriendly economic policies, emergence of employee
centered labour laws and Marxist policies like price fixing which
could disrupt fiscal targets set for 2004 and add further misery to
many business groups are urging the President and Prime Minister to
get back to the negotiating table with the LTTE and thereby ensure the
war that bled the economy dry for over 20 years is not restarted. The
private sector is also keen to ensure that bribery and corruption is
minimised in the future. They want the commission to be established as
soon as possible.
future JVP-PA government will have to re-start the peace process. The
country is crying for peace and we all know that the cost of no peace
is higher than the cost of war. The war has already cost more than Rs.
610 billion in the past 15 years. Therefore the new government would
have to do what is necessary to put the peace talks back on track.
Norwegian effort to bring the parties back to the negotiating table is
also on hold. Now that the PA has clinched a deal with the JVP, a
future PA-JVP or UNF government would still have to work towards
reconciling their differences by taking on board the concerns of each
in a two way process, firstly by reactivating the peace process with
the LTTE that is needed to move the country forward.
of the surveys carried out by various professional organisations have
revealed that the majority of the business community in Sri Lanka puts
peace on top of their agenda, even ahead of economic reform.
Therefore, all political parties must realise that this is the best
possible moment to formulate a bipartisan approach to address the most
difficult problems facing this country.
war has been the key factor that has prevented Sri Lanka from
realising her full potential. How effectively the resources have been
or are being utilised in the last 10 years to execute the war has also
been of concern. In fact, our country today exists on the various
taxes drawn from the people and on temporary IMF facilities.
the new government once elected urgently needs to do something to
temporarily tide over the crisis and work on long term strategies. The
country is heading towards a bloody election campaign and is in for
the ride of its life. The UNP today cannot blame the PA for resorting
to such cheap tactics to safeguard its existence because it was the
UNP under J.R. Jayewardene that
created the powerful presidency.
Sri Lanka will virtually grind to a halt in the next few weeks.
Whichever party that can demonstrate a working majority in parliament
in April must use Margaret Thatcher's election slogan in the seventies
titled 'Put Britain back to work,' which contributed largely to her
election and also led to her making many friends from a society that
saw little economic or social progress.
is what the new government needs to promote, backed up by a process of
reforms and liberalisation to ensure there is some light at the end of
current state in the country reminds me of a statement made by a
former US President, Ronald Reagan in a presidential debate in 1984
where he said, "There are so many candidates on the platform that
there are not enough promises to go around."
the final analysis, what we need from our public servants at this
election in general is impartiality, decency, discipline and
accountability to prevent Mother Lanka becoming the biggest loser.
bags Western Union award
the recently concluded Western Union South Asian Regional Conference
held in Rajasthan, India, Seylan Bank was awarded the trophy for
'Pioneer in International Diaspora Initiatives 2003.'
the years, the bank has promoted Western Union as the most convenient
money transfer service for the large number of Sri Lankan expatriates
domiciled and employed globally.
total inward remittances into Sri Lanka exceed Rs. 100 billion, the
importance of a fast, safe and efficient money transfer system is
sought after by many Sri Lankans who remit funds to their loved ones
importance of such an efficient money transfer service cannot be
underscored from the point of view of the economy and the balance of
payments of the country. Transmission and access time is less than 15
minutes and remitters have the comfort of knowing that the beneficiary
has access to the intended finances almost instantaneously.
Bank was recognised for its untiring efforts in promoting Western
Union among the Sri Lankan diaspora who are in various parts of the
Bank was also recognised for its promotion of the product locally by
the Sri Lanka Institute of Marketing 'Brand Excellence Awards' by
awarding the bronze award for 'Service Product of the Year' in year
to conduct University of London BSc courses
Oxford College of Business (OCB), a leading institute of higher
education in Sri Lanka, has been recognised by the University of
London to conduct courses leading to the prestigious BSc in Accounting
and Finance, BSc in Economics and Management and BSc in Business.
to Managing Director, OCB, Upul Daranagama, the OCB initially offered
a range of carefully selected courses in business management,
accounting, law, secretarial studies and human resource management,
while maintaining rigid standards in all aspects of education.
we soon realised there was a necessity to conduct courses leading to a
university degree. With this in view, we negotiated with the
University of London, which is one of the oldest and largest
universities in the United Kingdom. It is a federation of 18 colleges
and 11 institutions," Daranagama explained.
University of London will be granting internal degrees to the students
who follow classes at OCB and will also provide the structure,
contents, study material, set the examination papers and mark the
scripts - a range of responsibilities that no other university takes
on, on behalf of its undergraduates who are following off-campus
courses. This in turn enhances the value of the degree awarded by the
University of London.
advantage of these courses is that while studying in Sri Lanka, the
students are getting an equivalent degree to internal students there.
And while the same quality is maintained, it will also cost them a lot
less. We expect a good response for these courses. In addition, we
have a fully qualified lecture panel and all our staff members have
completed their MBAs," Daranagama said.
BSc in Business course provides the student with a solid understanding
of different functional areas of business and lays the foundation for
a lucrative career in management. It will also develop excellent
analytical skills in valuable to decision making.
BSc in Economics and Management is a degree with a strong emphasis on
social science theory and practice and will give students a thorough
understanding of a range of issues on international management.
BSc in Accounting and Finance provides a thorough grounding in
accounting and finance, within a strong science framework.
OCB any student who has completed 17 years and passes in specified
subjects in GCE O/L and A/L can enter the access route leading to an
honours degree," said Daranagama, who has earned a name for
organising similar courses.
degree courses will have five semesters and classes will be conducted
on weekends so that those who are employed will also have the
opportunity to follow the courses offered. Classes for the access
route however will be held on weekdays.
has made arrangements to receive, process and forward applications for
the degrees to the University of London.
is also affiliated to the Institute of Commercial Management, London (ICM)
and the Association of Business Executives (ABE). St. Patrick's
College in London is its partner school in the United Kingdom.