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Mr Chairman,
Your Excellencies,
Ladies and Gentlemen,
At the outset, I wish to express my gratitude to the organizers of the
Commonwealth Business Forum for inviting me to share my thoughts on the
topic “The Indian Ocean and the Pacific Rim: Fastest Growing Markets”.
In a world that is increasingly complex, where markets and economies
seem to be in a constant state of uncertainty and turmoil, the only
geographical area that appears to be somewhat stable is the Asia and the
Pacific region. In fact, today, it is the Asian and Pacific economies
that are universally accepted as playing the key role in global growth
and stability. It is therefore not surprising that the much talked-of
BRIC nations, consist of three countries from the Asian Region, India,
Russia and China, and that further confirms the growing importance of
the region.
Asia’s importance which has been clearly visible over the past couple of
decades is probably best reflected in the recent research findings of an
ADB study. According to the study conducted by the ADB this year, Asia’s
share of the global economic output was as high as 58 per cent in the
year Seventeen Hundred (1700). Thereafter, over a period of 260 years
that is from 1700 to about 1960 Asia’s share declined steadily, and fell
to around 16 per cent by 1960. However, over the past 50 years, Asia’s
share has been steadily climbing once again, and the ADB projections are
that by the year 2050, Asia’s share of global output could reach around
53 per cent. These projections are indeed remarkable since the
turn-around is expected to be recorded in just 90 years, while the
decline was experienced over about 260 years.
Asia’s fast growth track is also evident from many of its indicators
that we see at present. But, we must appreciate that this continuous
transformation would not take place unless the Asian nations continue to
take the right steps. That is why the current political and economic
leaders have a great responsibility in guiding the Asian nations to
prosperity, in a sustainable path. Such a journey will encounter many
risks and challenges, some of which I will now briefly outline.
My dear friends,
Going forward, one of our key challenges will be how we balance
“regulation” against “innovation”. At the same time, our nations will
have to continuously stimulate our economies, and not allow our systems
to falter or fail. We will also have to face the challenge of dealing
with commodity markets that are increasingly being used as financial
markets by a large segment of investors.
Today, we see hedge funds investing in orange juice, wheat flour and
rice as financial instruments. Such investment appetites place enormous
pressures on global commodity prices, which, in turn, challenge the
political and economic structures of many nations.
We must also understand that the fast growth in many Asian nations raise
expectations of its people, who look for better standards of living and
greater well-being. Fulfilling these expectations is another major task
for Asian political and economic leaders. At present, many advanced
nations suffer from high unemployment which has resulted in the first
signs of political and social unrest being felt in those societies. Such
situations, if allowed to escalate unchecked, could give rise to more
serious political problems which could further threaten global economic
stability. It is therefore imperative that the more advanced nations
respond quickly and effectively to deal with the rising inequalities and
unemployment levels in their societies, without allowing that situation
to reach unacceptable proportions.
My dear friends,
Economies operate on the bed-rock of confidence. If confidence levels
decline, rational economic activity that we take for granted, is damaged
at the very foundation. In that regard, it is essential that world
leaders search for proper responses and act decisively to regain and
restore confidence. The biggest concern amongst economic players today,
is that clear economic decision making has been too little, and too
late. It is therefore time for advanced economies to respond to the
growing crises, and to do so quickly and collectively. Otherwise, we
would find that the situation would become much worse, and perhaps even
reach a point of no-return.
Over the past six years, we in Sri Lanka, have been successful because
we have been able to provide a policy consistency and clarity in our
economy. Mahinda Chinthana, the policy agenda of the government clearly
spelt out our vision and the programme of action that we needed to
follow. We have acted quickly and confidently, in keeping with our
culture and the aspirations of our people and faced challenges directly.
We gave equal priority to the several macro-fundamentals of our economy,
including unprecedented investment in infrastructure, resulting in
substantial improvements in the recent past, which are worthy of
mention; economic growth up from 6% to 8%, unemployment down from 8% to
4.3% inflation down from 28% to 6%, Debt to GDP levels down from 103% to
79%, budget deficits down from over 10% to 6.8%, foreign reserve levels
up from 1 ˝ months of imports to 5 ˝ months of imports, Global
Competitiveness Index improving from 79th position to 52nd position,
Doing Business Ranking, improving from 102nd level to 89th level,
infrastructure development effort continuing without interruption,
poverty down from 22% to 8%, political stability being maintained in
times of great political chaos in the world.
We believe one of the reasons why Sri Lanka has been able to achieve
these improvements was the clarity and confidence we provided to our
stakeholders. We implemented balanced policies that embraced all vital
aspects of the economy simultaneously.
It is worth noting that these achievements were possible in the context
of conditions of peace and stability which we attained in Sri Lanka
after the eradication of terrorism. An end to terrorist violence was
absolutely essential to move the country forward along the path of
economic and social development.
Our initiatives today are multi-pronged. The spirit of inclusivity to
which we are deeply committed, is the basis of all our programmes of
reconciliation. Resettlement of those displaced by the conflict,
re-integration of ex-combatants, a political dialogue with
representatives of all communities and strengthening of electoral
mechanisms, especially at the grass-root level, are aspects of this
process. The economy of the area, previously affected by the conflict,
is growing today by 22%. We await the submission next month of the
report of the Lessons Learnt and Reconciliation Commission, a home grown
institution which I appointed to help leave behind us the pain and
anguish of the past and guide the nation towards an era of peace and
prosperity.
In our view, Individual policy interventions or ad-hoc measures which
target just one or two outcomes are often flawed and almost always, do
not provide the desired results. Such responses are essentially
short-term, and sometimes lead to new difficulties. Although it may
sound simplistic, I must say that, for growth to be sustained, we as
nations, must get our basics and fundamentals right.
At the same time, we have to ensure that we develop sufficient spaces
within our own economies so as to be able to comfortably face the
inevitable complexities in the face of global challenges.
It is now time for the world in general, and Asia in particular, to
search for and implement appropriate medium to long term strategies.
Such an approach would help countries to develop the ability to move
along a focussed growth path, even when the challenges become tougher.
The successes Asia has been able to enjoy over the past several years
have been many. The results that Asia has been able to display have been
impressive.
The growing level of prosperity that Asia has been able to provide for
its people has been satisfying. Asia now needs to continue this journey
in a sustainable manner. To do so, it will be vital that Asia maintains
its growth momentum and remains financially strong. That is a
responsibility Asia owes to its people.
About one half of the world’s population lives in Asia. That is why our
actions will be highly relevant in a global context, and that is why if
we maintain our success rate, the beneficiaries will be the greater part
of humanity. If we are successful and continue to be successful, we will
enhance the living conditions and sustainability of all these people,
and we will leave behind an inspiring and everlasting legacy.
In conclusion, I wish to take this opportunity to extend a warm
invitation to all of you to come to Sri Lanka in 2013, when the next
CHOGM will be held in Colombo. I firmly believe that it will be a
memorable experience for you.
My dear friends,
It is my fervent wish that our collective efforts in relation to
delivering prosperity to our people would endure the test of time.
May the Blessings of the Triple Gem be upon all of you! |