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How much zovirax cost Largest-ever mobilisation of funds for public infrastructure
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Sunday Times.lk – Columbo,Sri Lanka
Treasury Secretary Dr. P.B. Jayasundara, speaking at the Sri Lanka
Economic Summit 2008 on “Managing Public Finance to Enhance Efficiency”,
said public investment which dropped during 2002-2003 has now been
raised to six percent with plans to stabilize it at seven percent,
adding that public spending shouldn’t be sacrificed because of
inflation.
Expenditure compression is not the solution because private investment
cannot take place without the public spending in place, the Secretary
said. The downward trend in government spending seen in the last 10
years has been reversed and unemployment is on the decline and is at an
all time low of six percent.
Speaking of managing public expenditure efficiently, he said that it is
done in clusters to see where wastage occurs. He said scrapping a few
ministries is not the answer. Spending on national security, which is at
three and a half percent of the GDP is a critical component of public
expenditure, he said, adding “The government considers it an
investment”.
Speaking of the infrastructure developments that are taking around the
country, the Secretary noted that during the last 30 years development
has been concentrated in certain areas, leaving some others lagging
behind. Among these are the Eastern Province and the Mannar – Puttalam
areas. In the East, several projects are underway, including the Arugam
Bay Bridge, and the move to create an Export Processing Zone. Large
irrigation systems, highways and other developments are taking place all
over the country, Dr Jayasundara said.
Speaking of the funding for the projects, he said that this is the
largest mobilization of foreign funds with work being carried out on
three ports, two international airports, roads and irrigation schemes.
He also added that implementation periods have been shortened and
consultation curtailed, with donor assistance targeted towards country
specific needs and not donor specific needs.
The Secretary noted the rising cost of fuel and food prices in the
international market as new challenges but stated that adjustments in
Sri Lanka are much stronger that in the rest of South Asia. Speaking at
the same session providing the private sector perspective was Dr Anura
Ekanayake, Deputy Vice Chairman of the Ceylon Chamber of Commerce who
stated that it is the private sector who contributes 80 percent of the
GDP of the country but said that in Sri Lanka it is performing below the
regional par. He also noted that while public investment has increased
private investment has slowed down and added that given the size of the
private sector economy, the government will not be able to fill the gap.
Inflation, high interest rates and high energy costs were seen as some
of the factors adversely affecting the private sector. Dr Ekanayake
pointed out that the country’s inflation during 2007 and 2008 is way
above those of the competitors, while the prime lending rate in Sri
Lanka as of May was at 18.7 percent. In the commercial and household
categories Sri Lanka has the highest price for a unit of electricity
while in the industrial category, the local unit price is second only to
that in Singapore. He also noted that low confidence in the stock market
as another reason for the decline in private investment.
He pointed out a few immediate issues that need to be addressed such as
conflict, rising inflation, high cost of capital and energy and
relatively poor infrastructure. As solutions to these problems, he
suggested that in the short term, public expenditure should be reduced,
revenue collection should be increased keeping rates steady and reforms
in the public sector. In the medium to long run he stated that exports
need to be focused on and commercial agriculture needs to be established
in the country noting that agriculture productivity levels have been
stagnating for the last decade. The government should also combine with
the private sector to improve infrastructure, he said
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