Sri Lanka can still deliver the potential and promise foreseen by the Singaporean visionary Prime Minister Lee Kuan Yew in the early sixties where he wanted to make a Singapore like Sri Lanka, ADB President Takehiko Nakao said.
Addressing the historic ADB 50th Annual Meeting’s opening press conference in Yokohama Japan yesterday he said Sri Lanka was such a promising place and it is sill promising.
By opening up Sri Lanka further and taking opportunities of growing South Asia and integration of South Asia with East Asia, Sri Lanka can achieve a much greater development,” Nakao said.
Nakao said he was encouraged by the strong reform efforts and the investment in the conflict affected areas and the strong social indicators like during his visit to Sri Lanka, but cautioned on the trade weight to the GDP which was not too encouraging and the element of inward looking policies adopted by the country.
However the ADB President expressed optimism over recently conducted IMF program report which was very positive for Sri Lanka. “The IMF had a program recently and had reported that it was going well.I want to revisit Sri Lanka, which has great opportunities and many resources,” Nakao reiterated.
He said with US$ 50 billion equity they can now expand their lending operations by 50 percent upto US$ 20 billion or more by 2020.”We can increase our lending fo sustainable development goals and all other options,” Nakao insisted.
A very important element in the 50 year history is over time many countries turned into inward looking and protectionist policies. But over time they gradually moved to more outward looking open trade and investment polities.ADB has promoted this transmission. The ADB has estimated that US$ 1.72 trillion is needed annually for infrastructure such as power transportation communication and water.
The ADB was now compiling its new 2020 strategy in consultation with stakeholders. ADB’s role is financing with a knowledge,promoting good policies and regional cooperation.” In this 50 years we have expanded our membership and promoted the idea of regional cooperation,” he said. He also said protectionist policies were not affecting ADB’s growth policies.
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The ADB projects a 5% growth in Sri Lanka in 2017.The growth will be constrained by tight fiscal and monetary policies under the IMF program. Because consumption will be subdued, private investment will again have to play a primary role in maintaining economic growth.The higher VAT introduced in 2016 and improved income tax collection in 2017 will depress consumption, outweighing the positive impact of a modest increase expected in worker remittance earnings. While the March maha rice harvest was expected to be affected by continuing drought, an assumed return to normal rainfall promises to allow agriculture production to rebound from the second quarter, an ADB Economist told Daily News Business.
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