Sri Lanka’s Linear Growth Projections To Prosperity In A Non-Linear World
Dr. W.A. Wijewardena
Sri Lanka’s Linear Growth Projections to Prosperity in a Non-linear world: The challenge of tackling unexpected derailments
Now the issue is beyond $ 4000 mark
Having accepted that Sri Lanka’s average income per head, also known as per capita Gross Domestic Product or GDP, will reach the US $ 4000 mark one year before the previously targeted year of 2016, the Central Bank Annual Report for 2012 has now concentrated on how to take that impressive economic growth beyond that level.
Linear models in non-linear worlds
Table 1.5 of the Annual Report has given the Bank’s projections of economic growth till 2016 based on an accelerating linear economic growth during this period. Accordingly, the real economic growth which fell from 8.2 percent in 2011 to 6.4 percent in 2012, a significant decline from the previously projected growth rate of 9 percent set for that year, is projected to accelerate to new highs after 2013. The numbers are very impressive: starting from an economic recovery at 7.5 percent in 2013, it is projected to accelerate to 8.5 percent by 2016 with marginal increments in the growth rate in each of the intervening years. The Table also presents all the other relevant macroeconomic numbers that will support Sri Lanka to attain these linear targets, again assuming linear growth in these supportive numbers as well.
Foreign borrowings to finance BOP: Have a cautionary approach
But a well-crafted box article in the Annual Report titled “Bridging the Savings-Investment Gap to Sustain High Economic Growth in Sri Lanka” (Box 1) has recommended a cautionary approach to filling this gap by using external funding. The article has noted that the national savings – that is, savings made by all Sri Lankans irrespective of whether they live here or abroad – have increased as a ratio of GDP during 2000-12. Since there has not been an impressive increase in the savings made by Sri Lankans living within the country, known as domestic savings, the increase in national savings has been mainly due to the increased net flow of remittances which the country has received during this period. This has helped Sri Lanka, according to the article, to finance a larger portion of the investments it had made during this period. This is good news because to that extent, it has reduced the need for the country to look for foreign funding – both loans and private investments – to fill the savings investment gap. But there is still a huge gap to be filled – about 4 percent of GDP now and 8 percent of GDP if the country is to increase its investments to more than 30 percent of GDP to attain and maintain a high economic growth.
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TUESDAY, 07 MAY 2013
UNP may join hands with JVP against tariff hike
TUESDAY, 07 MAY 2013
The UNP was considering joining hands with the JVP and other political parties in the protest campaigns against the electricity tariff hike, UNP General Secretary Tissa Attanayake said today.
“We are having a discussion with non-UNP trade unions tomorrow at our headquarters. We already have had discussions with 47 trade unions and decided to join them on May 15 in the protest march against the tariff hike,” he said.
He said that the party was even ready to a prolonged protest against the tariff hike.
Mr. Attanayake also said the UNP would form ‘People-Regiments’ to topple the government during elections next year.
“The regiments will be establishedat every polling station with anelection supervisor appointed by the party,” he said adding that the people-regiments would only political purposes and would in no way have a military agenda.
“These regiments will only follow a political agenda. It is essential to change the government and to renew the political movement of the countrydue to the demands of the people,”Mr. Attanayake said.
He said the President had deceived the people on the electricity tariffs.
“Everyone is talking about how the President gave relief to the people.The government is trying to hide the fact that the prices were increased. The electricity consumers will realize this fact on May 20 when they receive their bills,” he said.
UNP MP Harshana Rajakaruna said the government should remove the fuel surcharge from electricity tariffs and the world prices of fuel had reduced significantly.
“The Government should reduce fuel prices as the international prices have declined. India had also reduced fuel prices on four occasions as a result of the reduced international fuel prices,” he added. (Lahiru Pothmulla, Yohan Perera)
“We are having a discussion with non-UNP trade unions tomorrow at our headquarters. We already have had discussions with 47 trade unions and decided to join them on May 15 in the protest march against the tariff hike,” he said.
He said that the party was even ready to a prolonged protest against the tariff hike.
Mr. Attanayake also said the UNP would form ‘People-Regiments’ to topple the government during elections next year.
“The regiments will be establishedat every polling station with anelection supervisor appointed by the party,” he said adding that the people-regiments would only political purposes and would in no way have a military agenda.
“These regiments will only follow a political agenda. It is essential to change the government and to renew the political movement of the countrydue to the demands of the people,”Mr. Attanayake said.
He said the President had deceived the people on the electricity tariffs.
“Everyone is talking about how the President gave relief to the people.The government is trying to hide the fact that the prices were increased. The electricity consumers will realize this fact on May 20 when they receive their bills,” he said.
UNP MP Harshana Rajakaruna said the government should remove the fuel surcharge from electricity tariffs and the world prices of fuel had reduced significantly.
“The Government should reduce fuel prices as the international prices have declined. India had also reduced fuel prices on four occasions as a result of the reduced international fuel prices,” he added. (Lahiru Pothmulla, Yohan Perera)
