DOCSLIB.ORG

Ipy Economicadjustment in Srilanka: I COPY Issuesand Prospects Public Disclosure Authorized

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Ipy Economicadjustment in Srilanka: I COPY Issuesand Prospects Public Disclosure Authorized -If11 No. 3901CE ? iPy EconomicAdjustment in SriLanka: i COPY Issuesand Prospects Public Disclosure Authorized May 27, 1982 South Asia ProgramsDepartment FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Documeni of the World Bank This document has a restricted disiribution and may be used by recipients oni in the perlormance of their official duties. Ils contents may not otherwise be disclosed%sithout Wbrld Bank authorization. CURRICY EQjVALENTS a/ End-December Currency Unit 1976 US$1.00 = Rs 8.83 Rs 1.00 = US$ 0.11 Rs 1 million = US$113,250 1977 US$1.00 REs 15.56 Rs 1.00 = US$ 0.06 Rs 1 million = US$64,267 1978 US$1.00 = Rs 15.51 Rs 1.00 = US$ 0.06 Rs 1 million = US$64,475 1979 US$1.00 REs 15.45 Rs 1.00 = US$ 0.06 Rs 1 million = US$64,725 1980 US$1.00 = Rs 18.00 Rs 1.00 = US$ 0.06 Rs 1 million = US$55,556 4"981 US$1.00 = Rs 20.55 Rs 1.00 = US$ 0.05 Rs 1 million = US$48,662 Annual Average Exchange Rates Foreign Exchange Entitlement Official Rate Certificate (FEEC) Rate b/ 1969-71 US$1.00 = Rs 5.95 Rs 9.22 (55% FEEC) 1972 US$1.00 = Rs 6.00 Rs 9.30 (55% FEEC) 1973 US$1.00 = Rs 6.40 Rs 10.56 (65% FEEC) 1974 US$1.00 = Rs 6.65 Rs 10.97 (65% FEEC) 1975 US$1.00 = Rs 7.05 Rs 11.63 (65% FEEC) 1976 US$1.00 = Rs 8.46 Rs 13.96 (65% FEEC) 1977 (Jan. 1 - Nov. 15) US$1.00 = Rs 7.89 Rs 13.02 (65% FEEC) 1977 (Nov. 16 - Dec. 31) US$1.00 = Rs 15.76 1977 US$1.00 = Rs 9.15 1978 US$1.00 = Rs 15.61 - 1979 US$1.00 = Rs 15.57 1980 US$1.00 = Rs 16.53 1981 US$1.00 = Rs 19.25 a/ The Sri Lanka rupee, which had been linked to the US dollar from November 6, 1971 was re-linked to the Pound Sterling from July 10, 1972 onward at a parity rate of 1.00 = Rs 15.60. Parity rates with all other currencies were determined from time to time by the Central Bank. The rupee was delinked from Sterling on Mlay 24, 1976, linked to a weighted basket of currencies. On November 15, 1977, the exchange rate was unified, depreciated, and allowed to float at an initial rate of US$1.00 = Rs 16.00. b/ This rate applied to all exports other than tea, rubber, and coconut, and all imports other than food, fertilizer, and drugs. FEECs were abolished on November 15, 1977. This report was prepared by a mission composed of Messrs. Rene Vandendries (Chief of Mission), John Borthwick, Hassan Fazel, and Rene Moreno, which visited Sri Lanka between January 25 and February 12, 1982. Mr. K. Sarwar Lateef of the resident mission in Colombo also participated in the mission and contributed to the report. Ms. Vidya Shetty (Research Assistant) helped in preparing the statistical appendix. FOR OFFICIAL USE ONLY GLOSSARY Asweddumized - Levelled and bunded land, suitable for paddy cultivation CGR - Ceylon Government Railways CDA - Coconut Development Authority CPC - Ceylon Petroleum Corporation CSC - Ceylon Shipping Corporation CWE - Co-operative Wholesale Establishment DFCC - Development Finance Corporation of Ceylon DMEC - Department of Minor Export Crops EDB - Export Development Board FCBUs - Foreign Currency Banking UJnits FEECs - Foreign Exchange Entitlement Certificates (see Currency Equivalents) FIAC - Foreign Investment Advisory Committee GCEC - Greater Colombo Economic Commission GPS - Guaranteed Price Scheme GWh - Gigawatt-hour (1,000,000 kilowatt-hours) Ha - Hectare (one hectare equivalent to 2.741 acres) JEDB - Janatha Estates Development Board KIPZ - Katunayake Investment Promotion Zone LIAC - Local Investment Advisory Committee Maha - Northeast monsoon, October-February MLT - Medium and Long Term NDB - National Development Bank NHDA - National Housing Development Authority PMB - Paddy Marketing Board Poonac - Copra cake SDR - Special Drawing Right (IMF unit of account) SLCTB - Sri Lanka Central Transport Board SPC - State Plantation Corporation UDA - Urban Development Authority Yala - Southwest monsoon, May-September Note: All weights and measures are metric unless otherwise specified. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. TITLE : ECONOMIC ADJUSTMENT IN SRI LANKA: ISSUES AND PROSPECTS COUNTRY : SRI LANKA REGION : SOUTH ASIA SECTOR COUNTRY ECONOMIC REPORT TYPE CLASSIF MM/YY LANGUAGES 3901-CE CEM Restricted 05 82 English PUBDATE : 8205 ABSTRACT : Sri Lanka's economic growth performance improved substantially following the liberalization of the economy in 1977, but the process was accompanied by growing deficits in the budget and in the current account in the balance of payments, which reached unsustainable levels in 1980. Good progress towards the restoration of economic stability was made during 1981, yet it would now appear that this progress will not be maintained in 1982 and 1983. This report reviews these developments since 1977 and discusses the requirements and policy options for restoration of the adjustment momentum achieved in 1981, with special emphasis on budgetary policies, which have been the main source of instability, and on the need to keep the use of non-concessional finance to prudent levels. The report also focusses on the longer term requirements of a successful economic adjustment process including policies to strengthen the directly productive sectors and especially exports. In addition, the immediate balance of payments outlook is reviewed and estimates are provided of Sri Lanka's aid requirements during the next two years. ECONOMIC ADJUSTMENT IN SRI LANKA: ISSUES AND PROSPECTS Table of Contents Page No. Glossary List of Tables in the Text List of Annexes Country Data SUMMARY AND CONCLUSIONS ...................................... i-vi I. ECONOMIC LIBERALIZATION.- THE FIRST FOUR YEARS .. ......... 1 ECONOMIC PERFORMANCE SINCE 1977 ..... ..................... 1 Economic Growth ........................................... 2 Employment ............................................... 7 Budgetary Reforms ......................................... 8 Investment, Savings, and Inflation ....................... 10 THE ECONOMY IN 1981 ...... ................................ 14 The Budget ............................................... 15 Monetary Policies ................ ........................ 17 Balance of Payments Policies ..... ........................ 19 Conclusion ............................................... 23 II. MACRO-ECONOMIC MANAGEMENT AND OUTLOOK .................... 25 THE STABILIZATION TASK . ................................. 25 The Macro-economic Problem ..... .......................... 25 The Budget, 1982-83 .......................................26 Budgetary Policy Issues ........ ................... .. ........... 28 THE NEED FOR FURTHER STRUCTURAL CHANGE IN KEY SECTORS .... 31 Agricultural Sector Policies ............................. 32 Industrial and Trade Policies .................... ........ 35 Energy Policies ... ............................. .. ........ 39 III. THE PUBLIC INVESTMENT PROGRAM, 1982-86 . 45 Adjustment in 1981 .. .. .. ............. .. 45 The 1982 Capital Budget .................................. 46 The 1982-86 Program ...... ..................... 50 Page No. IV. EXPORTS: A CRITICAL AREA FOR LONG.TERM GROWTH ............ 61 MERCHANDISE EXPORTS .................................... ... 61 Tree Crop Exports ...... ....................... ............ 62 Other Merchandise Exports ............................... .. 67 NONFACTOR SERVICE RECEIPTS ................................ 74 Tourism ................................................... 74 Port and Shipping ............ ............... ............... 75 PRIVATE REMITTANCES ...... .................... .. ........... 76 CONCLUSIONS ......... .......................... ............ 78 V. THE ROLE OF EXTERNALFINANCE .............................. 83 Balance of Payments Prospects, 1982-83 .................... 83 Aid Commitments and Disbursements, 1977-81 ................ 87 Aid Recommendations for 1982 and 1983 .......... ** ......... 92 External Debt Position and Prospects ...................... 93 Conclusion ................................................ 98 ANNEXES ................................................... 101 STATISTICAL APPENDIX .............................. ........ 149 Map LIST OF TABLES IN THE TEXT Page No. Table 1: Composition and Growth of GDP, 1970-81 . ............. 2 Table 2: Paddy Indicators, 1977-81 ..... ...................... 3 Table 3: Role of State Agencies in Rice/Paddy Trade, 1977-81 . 4 Table 4: Selected Subsidies and Transfers, 1977-81 .......... 9 Table 5: Investment-Savings Balance, 1978-81 .... ............. 10 Table 6: International Trade Price Indices, 1977-81 .......... 12 Table 7: Annual Average Price Increases, 1978-81 ............. 13 Table 8: Components of Annual Average Increases in an Unpublished Cost of Living Index, 1979-81 ......... 14 Table 9: Summary of Government Finance, 1979-82. 16 Table 10: Monetary Growth, 1979-81............................ 18 Table 11: Summary Balance of Payments, 1979-81. 22 Table 12: Exchange Rate Movement in 1981. 23 Table 13: Central Government Budget Operations ......... 27 Table 14: Selected Macro Indicators. 29 Table 15: Budgetary Public Investment, 1981-82. ... 48 Table 16: Sectoral Classification of Budgetary Public Investment Program, 1981-85 and 1982-86 .51 Table 17: Phasing of Budgetary Public Investment 1981-86 55 Table 18: Potential Export Growth in the Medium to Long Term 80 Table 19: Balance of Payments, 1980-83 ........................ 84 Table 20: ToT otalForeign Exchange
Load more

Recommended publications
  • Local Government (Separate Paging Is Given to Each Language of Every Part in Order That It May Be Filed Separately)
    N. B.– Sinhala and Tamil versions of this Gazette will be published separately. YS% ,xld m%cd;dka;s%l iudcjd§ ckrcfha .eiÜ m;%h The Gazette of the Democratic Socialist Republic of Sri Lanka wxl 2"099 - 2018 fkdjeïn¾ ui 23 jeks isl=rdod - 2018'11'23 No. 2,099 – FRiDAy, NovEmBER 23, 2018 (Published by Authority) PART IV (B) — LOCAL GOVERNMENT (Separate paging is given to each language of every Part in order that it may be filed separately) PAGE PAGE Posts - vacant ... 1390 Notices under the Local Authorities Elections ordinance ... –– Examinations, Results of Examinations, &c. ... –– Revenue & Expenditure Returns ... –– Notices - calling for Tenders ... –– Local Government Notifications ... 1400 Budgets ... –– By-Laws ... –– miscellaneous Notices ... 1409 IMPORTANT NOTICE REGARDING ACCEPTANCE OF NOTICES FOR PUBLICATION IN THE WEEKLY “Gazette” ATTENTION is drawn to the Notification appearing in the 1st week of every month, regarding the latest dates and times of acceptance of Notices for publication in the weekly Gazettes, at the end of every weekly Gazette of Democratic Socialist Republic of Sri Lanka. All Notices to be published in the weekly Gazettes shall close at 12.00 noon of each Friday, two weeks before the date of publication. All Government Departments, Corporations, Boards, etc. are hereby advised that Notifications fixing closing dates and times of applications in respect of Post-vacancies, Examinations, Tender Notices and dates and times of Auction Sales, etc. should be prepared by giving adequate time both from the date of despatch of notices to Govt. Press and from the date of publication, thereby enabling those interested in the contents of such notices to actively and positively participate please note that inquiries and complaints made in respect of corrections pertaining to notification will not be entertained after three months from the date of publication.
    [Show full text]
  • YS% ,Xld M%Cd;Dka;S%L Iudcjd§ Ckrcfha .Eiü M;%H
    IV^wd& fldgi - YS% ,xld m%cd;dka;s%l iudcjd§ ckrcfha .eiÜ m;%h - 2016'12'16 2581 Part IV (B) – GAZETTE OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA – 16.12.2016 YS% ,xld m%cd;dka;s%l iudcjd§ ckrcfha .eiÜ m;%h The Gazette of the Democratic Socialist Republic of Sri Lanka wxl 1"998 - 2016 foieïn¾ ui 16 jeks isl=rdod - 2016'12'16 No. 1,998 – FRIDAY, DECEMBER 16, 2016 (Published by Authority) PART IV (B) — LOCAL GOVERNMENT (Separate paging is given to each language of every Part in order that it may be filed separately) PAGE PAGE Posts - Vacant ... –– Notices under the Local Authorities Elections Ordinance — Examinations, Results of Examinations, &c. ... –– Revenue & Expenditure Returns ... –– Notices - calling for Tenders ... –– Local Government Notifications ... 2582 Budgets ... –– By-Laws ... –– Miscellaneous Notices ... 2595 Note.– Heart to Heart Trust Fund (Incorporation) Bill was published as a supplement to the part II of the Gazette of the Democratic Socialist Republic of Sri Lanka of December 02, 2016. IMPORTANT NOTICE REGARDING ACCEPTANCE OF NOTICES FOR PUBLICATION IN THE WEEKLY “GAZETTE” ATTENTION is drawn to the Notification appearing in the 1st week of every month, regarding the latest dates and times of acceptance of Notices for publication in the weekly Gazettes, at the end of every weekly Gazette of Democratic Socialist Republic of Sri Lanka. All Notices to be published in the weekly Gazettes shall close at 12.00 noon of each Friday, two weeks before the date of publication. All Government Departments, Corporations, Boards, etc. are hereby advised that Notifications fixing closing dates and times of applications in respect of Post-vacancies, Examinations, Tender Notices and dates and times of Auction Sales, etc.
    [Show full text]
  • The Give and Take of Disaster Aid
    The Give and Take of Disaster Aid Social and Moral Transformation in the Wake of the Tsunami in Sri Lanka The Give and Take of Disaster Aid Social and Moral Transformation in the Wake of the Tsunami in Sri Lanka Carolina Ivarsson Holgersson Doctoral Dissertation in Social Anthropology School of Global Studies University of Gothenburg 2013 © Carolina Ivarsson Holgersson 2013 Printed by: Kompendiet, Göteborg 2013 ISBN 978-91-628-8752-0 http://hdl.handle.net/2077/33687 References to internet web sites were accurate at the time of writing. The author takes no responsibility for web sites that may have expired or changed since this book was prepared. The Give and Take of Disaster Aid - Social and Moral Transformation in the Wake of the Tsunami in Sri Lanka By Carolina Holgersson Ivarsson. Doctoral dissertation 2013, Social Anthropology, School of Global Studies, University of Gothenburg, Box 700, 405 30 Gothenburg, Sweden. Language: English with a summary in Swedish. - ISBN 978-91-628-8752-0 - http://hdl.handle.net/2077/33687 Abstract The act of giving reflects the most basic principles of morality and has therefore constituted a classical anthropological field of inquiry. The importance of giving, receiving and reciprocating for the shaping and consolidation of social relations has long been recognized. This thesis uses these insights to explore the way in which the gift of disaster aid, which derives from outside the community, impacts upon local social and cosmological relations in a village. The main objective is to investigate how the Boxing Day 2004 tsunami and the immense wave of aid that followed it and subsequently receded, affected the local moral economy in a Sri Lankan village.
    [Show full text]
  • Coconut Harvesting and Copra Production. Coconut
    OCCASION This publication has been made available to the public on the occasion of the 50th anniversary of the United Nations Industrial Development Organisation. DISCLAIMER This document has been produced without formal United Nations editing. The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO) concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. Designations such as “developed”, “industrialized” and “developing” are intended for statistical convenience and do not necessarily express a judgment about the stage reached by a particular country or area in the development process. Mention of firm names or commercial products does not constitute an endorsement by UNIDO. FAIR USE POLICY Any part of this publication may be quoted and referenced for educational and research purposes without additional permission from UNIDO. However, those who make use of quoting and referencing this publication are requested to follow the Fair Use Policy of giving due credit to UNIDO. CONTACT Please contact [email protected] for further information concerning UNIDO publications. For more information about UNIDO, please visit us at www.unido.org UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Vienna International Centre, P.O. Box 300, 1400 Vienna, Austria Tel: (+43-1) 26026-0 · www.unido.org · [email protected] Distr. LIMITED Û W 1 UNIDO/IOD.377 UNITED NATIONS 4 September 1980 INDUSTRIAL DEVELOPMENT ORGANIZATION ENGLISH ESTABLISHMENT OF A COCONUT PROCESSING TECHNOLOGY CONSULTANCY SERVICE UF/RAS/78/048 ASIAN AND PACIFIC COCONUT COMMUNITY COCONUT PROCESSING TECHNOLOGY INFORMATION DOCUMENTS PART 1 0 F 7 "Coconut Harvesting and Copra Production" Based on tha work of T.
    [Show full text]
  • Rural Entrepreneurs in Context
    10 Rural entrepreneurs incontex t SarahSouthwold-Llewellyn Introduction The aim of this article is to discuss rural entrepreneurs in different contexts. One context is the theoretical and methodological framework of the 'Manchester School' which has been the underpinning ofNorma n Long's work, as well as my own. The other context is the one in which our informants operate. Both contexts are influenced by diachronic processes that affect the constructs of the academics and the constructs of our informants for understanding their behaviour. This article is a comparison of a few aspects of both contexts, and a look at how they have evolved over a twenty-five year period. The academic context begins when I arrived at Manchester University in 1968, as a postgraduate student from the United States. The Department of Social Anthropology was still in its heyday under the leadership of Max Gluckman. Emrys Peters, Kingsley Garbett, Bruce Kapferrer, Norman Long, Basil Sansom, Martin Southwold, and Dick Werbner were all staff members at the time. It was a dynamic, stimulating environment for students, as well as staff. Ideas were debated, challenged and developed. Complementary influence came from members of the Sociology Department - I mention particularly Peter Worsley, Clyde Mitchell and Bryan Roberts, who have all influenced Norman Long's work. Norman was at that time ayoun g and enthusiastic lecturer. His enthusiasm was expressed in the eclectic approaches he used inSocial Change and theIndividual (Long, 1968) where he experimented with different theoretical and methodological approaches to analyse his data. I was fortunate to be among one of the first groups of post-graduate students supervised by Norman.
    [Show full text]
  • Income-Earning Activities for Women from Fishing Communities in Sri Lanka BAY of BENGAL PROGRAMME BOBP/REP/21 Development of Small-Scale Fisheries GCP/RAS/040/SWE
    BOBP/REP/21 (GCP/RAS/040/SWE) Income-Earning Activities for Women from Fishing Communities in Sri Lanka BAY OF BENGAL PROGRAMME BOBP/REP/21 Development of Small-Scale Fisheries GCP/RAS/040/SWE INCOME-EARNING ACTIVITIES FOR WOMEN FROM FISHING COMMUNITIES IN SRI LANKA By Edeltraud Drewes Sacio-Economist Bay of Bengal Programme Executing Agency : Funding Agency : Food and Agricultural Organization Swedish International of the United Nations Development Authority Develooment of Small-Scale Fisheries in the Bay of Bengal, Madras, India, September 1985. Mailing Address: Post Bag No. 1054, Madras 600 018, India Street Address : 91 St. Mary’s Road, Abhiramapuram, Madras 600 018, India. Cables : FOODAGRI. Telex : MS-31 1 FISH. Phones: 71294, 71296, 71587, 77760. This report describes two pilot activities in Sri Lanka meant to explore income- earning opportunities for women from fishing communities. The activities relate to coir production in Ulhitiyawa, and sewing and tailoring in Mirissa. The report has been written up essentially as a case study of the two pilot activities, especially of the process of planning and implementation; It is not a complete record of the activities. The report concludes that the pilot activities have, on the whole, yielded promi- sing results. However, lack of management skills among women from fishing communities remains a major lacuna. The report, and the pilot activities it describes, have been organized by the small- scale fisheries project of the Bay of Bengal Programme (BOBP), in cooperation with several agencies: the Sri Lanka Mahila Samiti, a voluntary organization; the Women’s Bureau of the Ministry of Plan Implementation; and the Welfare Division of the Ministry of Fisheries.
    [Show full text]