Published in Canada by The Times of Sri Lanka Vol.9 JUNE 2011 Projected economic growth in North & East regions will be 13 per cent over five years The economy of Sri Lanka’s once war-torn Northern and Eastern provinces are set to grow by around 13 percent per annum from 2011 onwards for the next five years, according to the Governor of the Central Bank of Sri Lanka (CBSL). CBSL Governor Ajith Nivard Cabraal (inset) made these remarks in delivering the 60th Anniversary Oration of the CBSL a fortnight ago, on the topic of ‘Promoting financial inclusiveness – The experience of the past two years’. “There is a clear drive towards holistic development in the North and East to ensure that people sustain their economic achievements and translate them into a way of life. We expect that the range of investments made in these provinces will result in a growth rate of around 13 percent per annum in these provinces, from 2011 onwards for the next five years,” Cabraal said. According to the Governor, it has been encouraging to see that the Northern Province (NP) had recorded the highest nominal growth rate of 14% in 2009 ahead of all other Provinces although on a low base. The contribution to the country’s GDP by the NP increased to 3.3% in 2009 from 2.8% in 2006. The Eastern Province on the other hand recorded the second-highest nominal growth rate of all provinces, at 14% in 2009 while its contribution to the country’s GDP increased to 5.8% in 2009 from 4.9% in 2006. “Although the figures have not been finalized for 2010, we believe the results will be similar to 2009,” the Governor pointed out. He added that in order to maintain these growth rates, the government is focusing on improving infrastructure in these areas during the years 2011 to 2014. Some of the major investments he identified were the rehabilitation of key roads, railroads, hospitals and bridges, restoration of industries that closed down because of violence, implementation of large scale irrigation schemes and projects for providing electricity and water, establishment of vocational training centres and technical colleges for skills development, upgrade of fisheries harbours and development of tourist attractions. According to the Ministry of Finance and Planning, Rs.251.6 billion has been allocated for improving infrastructure in the ‘Vadakkin Vasantham’ programme from years 2011 to 2013, while in 2011 alone Rs.50.9 billion allocated for the North and Rs.26.6 billion for the East. Rs.433 Mn loans for Northern region farmers The livelihood of an estimated 30,978 farmer families is beginning to flourish under the Central Bank’s Prabodhi Loan Scheme with emphasis on the Northern farmers for which a sum of Rs. 433 million has been pumped as loans for some 21,000 people. Explaining the potential of the scheme, Central Bank Governor Ajith Nivard Cabraal stressed the fact that this government concept was aimed at primarily alleviating poverty in the country and collectively raising the agricultural output in the country under the common economic drive. “What we want to see is everyone playing a part in the country’s economy from home gardening under self projects upwards where a gamut is in place to fund these farmers through various banks, particularly the Bank of Ceylon,” said the Governor of the Central Bank early this year when he met 33 Jaffna women farmer families at the Central Bank office. The occasion took a national as much as a colourful atmosphere as these poor families torn by a 30-year-old war freely mingled with Central Bank officials as they gleefully lapped up every moment of it as they set for official photographs with the bank authorities. For them, it was a type of voyage they had set out on as they were scheduled to head later in the day to the South to meet with their Sinhalese counterparts engaged in farming. Initially, areas in the North East such as Jaffna, Batticaloa, Killinochchi, Mannar, Trincomalee and Vavuniya have been identified to promote farming activities through farmer families under the Prabodhi Loan Scheme. Benefiting under this scheme are many war widows from the North east. Meanwhile, the Deputy Governor of the Central Bank, Dharma Weerasinghe told journalists that the project was taking off positively with many of these women farmers already having profitable bank accounts. “Some of them have businesses worth lakhs,” the Deputy Governor observed. The Assistant Governor, W.M. Karunaratne said that in all 14 districts throughout the island had been identified including Moneragala, Badulla, Puttalam and Polonnaruwa. Chunnakam is a natural source for limestone Financial powerhouse LB Finance unveiled its second branch in the Jaffna Peninsula when it opened in Chunnakam recently, signaling its intent to emerge as a key factor in the northern district’s re-development drive. Chunnakam, just 10km from Jaffna town has been known for its limestone and a hawkers’ street bringing in people by their thousands, making the street impassable on trading days. “We have been doing our homework and identified Chunnakam as a base for development, says Sumith Adhihetty, Managing Director of LB Finance. A province in transition, the Jaffna district is home to many people now gradually re-settling to the formal economy and as a leading finance company, LB Finance has the advantage of a product spread more accessible to such people, he says. The branch was declared open by the Senior Marketing Manager, Roshan Jayawardena. The expansion across the island is crucial especially during the current period of post-war recovery and growth. The North and East are about to take on a new boom in the country and this financial giant dominating such a city as Jaffna is fundamental. LB finance has taken the industry by storm with its distinctive brand of financial services, recording phenomenal growth in spite of the recent financial meltdown. It operates through a highly-integrated network of branches offering cutting-edge solutions through services TTTrrraaadddeeeWWWiiinnndddsss eee---MMMaaagggaaazzziiinnneee such as acceptance of fixed deposits, leasing, hire purchase, microfinance, inland money transfer, gold loans, JJJuuunnneee 222000111111 factoring and other credit facilities. Page 1 of 24 Exports surge in March Baur Asia expansion in Sri Lanka In Sri Lanka, March has produced a record US$ The management of Baur Asia Lte. Ltd., announced that Sri Lanka is 1.057 billion in exports, an achievement which is among two other countries (Bangladesh and Switzerland) included in its a first of its kind in the country’s history, the expansion program. In the process three very experienced personnel Central Bank said. It said earnings from exports have been recruited to the organization as vice presidents responsible for in March 2011 increased by 59.5% year-on-year, business development. Anton Thevapalan based in Colombo, Sri Lanka to $ 1,057 million reflecting increases in all major categories of exports. has long years of experience in the corporate sector and tourism and “This is the first time that monthly export earnings surpassed the $1,000 with the growing importance of tourism and hotel management he million level,” the Bank said in releasing its latest external trade data. It brings a wide knowledge into the organization. said expenditure on imports increased by 73.0% to $ 1,689 million in Nadeem Rahman based in Dacca/Bangladesh is from a March 2011 whilst the trade deficit in March 2011 expanded to $ 632.4 diplomatic background and brings long years of experience in million. During the first quarter of 2011, the cumulative earnings from the corporate sector both in Bangladesh and Nepal. Roger exports and expenditure on imports have increased by 54.3% to $ 2,721 Kunz based near Zurich/Switzerland has many years of experience in the million and 39.9% to $ 4,458 million, respectively. The largest corporate sector and has worked many years in Asia. He brings a vast contribution to the growth in exports in March 2011 was from the experience in business negotiations to our organization. Baur Asia Pte. industrial sector, led by significant increases in exports of textile and Ltd. is a sister company of A. Baur & Co. (Pvt.) Ltd. and assists garments. Other key categories of industrial exports, except machinery companies and organizations to establish themselves in the growing and equipment, also performed well in March 2011. Exports of petroleum Asian markets. Through its tie up in Sri Lanka the company is in products increased by 361.1% reflecting higher volumes and prices of negotiations with a famous Swiss Hotel School to establish itself in Sri bunkering and aviation oil, compared to March 2010. Earnings from Lanka. The vice presidents based in Sri Lanka are Cubby Wijetunge, exports of rubber products increased by 75.6% during the month. Mahanama Dodampegama, Amal Peiris, Anton Thevapalan, Angelo Agricultural exports, which accounted for 16.0% of the total export Nicholas and Yohan Dissanayaka. earnings in March 2011, increased by 40.3%, year-on-year, reflecting the sound performance by the tea, rubber, coconut and minor agricultural sectors, as they continued to gain higher prices in the international Jayaseelan gets key post at SriLankan market. In line with the higher oil prices in the international market, the average export price of rubber increased by 70.5% year-on-year, to $ 5.13 SriLankan Airlines has appointed G.T. Jayaseelan, per kg in March 2011. The average export price of tea remained high at $ currently Head of Service Delivery as Chief Marketing 4.86 per kg during the month. Earnings from minor agricultural exports Officer with effect from June 1, airline officials said.