COUNTRY INFORMATION UPDATE – 20 DECEMBER 2010

December 20, 2010 at 3:08 pm

EMBASSY OF SRI LANKA,
WASHINGTON, D.C.
COUNTRY INFORMATION UPDATE
December 20, 2010

IMF ON SRI LANKA’S ECONOMY: “OVER ALL ECONOMIC CONDITIONS REMAIN STRONG.”

In a Dec. 14, 2010 statement, the International Monetary Fund praised Sri Lanka’s continued “strong” economic performance, noting, “Substantial progress toward fiscal and external sustainability.”

The statement follows a review of Sri Lankan’s economy by an IMF country team. The IMF offered Sri Lanka a $2.5 billion loan facility in July 2009 and since then has made periodic visits to assess the island nation’s economy.

Sri Lanka is experiencing a period of sustained growth despite the global downturn. The Central Bank of Sri Lanka announced recently that gross domestic product for 2010 would be eight percent, and unemployment and inflation remain low.

The IMF report found that:  “Overall economic conditions remain strong, with GDP likely to grow by around 7½ percent this year. Inflation has risen, but this appears to be driven mostly by food prices, and credit growth is picking up as expected, suggesting that the current monetary policy stance remains appropriate. The trade deficit is widening, as imports recover from their sharp decline in 2009, but remittance inflows continue at a high rate and reserves remain at comfortable levels.

“Performance under the program is good, with all end-September performance criteria met. Monthly budget results to date are encouraging and suggest that the 2010 deficit target of 8 percent of GDP is within reach. The authorities’ structural reform agenda under the program also appears to be broadly on track.

“The 2011 budget, approved by Parliament last week, targets further deficit reduction along with substantial reforms to the tax system and the investment promotion regime, in line with the authorities’ policy commitments. The tax reform simplifies the system, reduces many rates, and broadens the base. The net revenue impact is expected to be substantially positive, though some uncertainty is unavoidable with such an extensive set of policy changes. The new approach to investment promotion, if fully implemented, involves a shift away from tax concessions as the principal tool for attracting investment as well as an increase in transparency. No doubt further progress on these and other fronts will be needed to ensure an acceleration of growth and a transformation of the economy, but the reforms announced in the budget are welcome steps.

“While challenges remain, the authorities have made substantial progress toward fiscal and external sustainability.”

(Source: IMF)

WORLD BANK GROUP’S MANAGING DIRECTOR ANNONNCES SRI LANKA’S ELIGIBILITY FOR IBRD FINANCING

CITES SRI LANKA’S “REMARKABLE RISE”

AS A “GROWING ECONOMY”

Colombo, December 17, 2010 – World Bank Managing Director, Dr. Ngozi Okonjo-Iweala today announced moves which could pave the way for Sri Lanka to receive increased support from the development institution.

The move came after Dr. Okonjo-Iweala met President Rajapaksa, Central Bank Governor Nivard Cabraal, along with other senior officials and spoke at the Central Bank’s 60th anniversary commemorations, during which the Managing Director reaffirmed the World Bank’s strong and expanding support to Sri Lanka as it transitions towards a middle-income country in lasting peace.

In recognition of the country’s emergence as a growing economy, Dr. Okonjo-Iweala announced Sri Lanka’s new eligibility for financing from the IBRD, the World Bank’s lending arm for middle-income countries in addition to the current assistance from the IDA. This development has the potential to more than double the amount of resources available to Sri Lanka every year, currently close to $200 million annually from IDA.

“Sri Lanka’s remarkable rise from past challenges is a testament to the tenacity of the Sri Lankan people and the commitment of the country’s leadership,” said Dr. Okonjo-Iweala. “Eligibility for IBRD borrowing is an important recognition of Sri Lanka’s middle income country status and signals an important step in the evolution of our relationship going forward – a relationship that is founded on knowledge and experience-sharing that complements the available financing.”

Conveying the news on IBRD financing to President Rajapaksa, Dr. Okonjo-Iweala reiterated the World Bank’s commitment to Sri Lanka, especially in supporting programs designed to encourage inclusive growth throughout the country. She also noted the World Bank’s willingness to increase support to complement the ambitious development aspirations of doubling per capita income and growth in excess of 8%, which will be aided by increasing private investment from both foreign and domestic sources as envisioned in the Mahinda Chintana, the Government’s vision for future development.

President Rajapaksa conveyed his appreciation to the World Bank for providing support to complement the country’s development goals and noted that he looks forward to working with the Bank on the implementation of the Mahinda Chintana.

In her speech to the Central Bank, Dr. Okonjo-Iweala also emphasized the importance of investment and innovation towards development and exchanged ideas from global perspectives that could help Sri Lanka reach its full potential as a growing middle income country. “The expansion of the knowledge economy and the search for innovative ideas by all Sri Lankans will be important to successfully accelerate growth and improve living standards,” she said.

Dr. Okonjo-Iweala will be visiting World Bank supported projects in Eastern Sri Lanka tomorrow aimed at increasing opportunities and improving livelihoods. Her stops will include projects assisting with higher education, employment generation for vulnerable groups, small and micro enterprise development and increasing computer use and literacy.

Since the World Bank Group’s first development credit to Sri Lanka for the Aberdeen – Laksapana Power Project in 1954, the institution has become one of Sri Lanka’s largest development partners. It has worked closely to support the country’s progress in infrastructure, education, health, and environmental protection. It is currently supporting the implementation of 17 projects totaling $1.25 billion in assistance aimed at maximizing impact and results.

POWER SHARING FROM GRASS ROOTS – PRESIDENT OT LIAM FOX

Mr. Liam Fox, Secretary of State for Defence of the United Kingdom who called on President Mahinda Rajapaksa in London Dec. 1, 2010, discussed aspects of the wider sharing of power in Sri Lanka, and development assistance from the UK.

In discussions on the Government’s proposals for sharing of power among all communities, President Rajapaksa explained that he saw the necessity for the local government authorities to be strengthened, to ensure that the people in the different provinces would be able to have a greater say in the management of their own affairs.

He told Mr. Fox there were shortcomings in implementation of the devolution sought by the 13th Amendment through Provincial Councils, which necessitated action to make the Provincial Councils contribute more to the progress of the local government authorities. He told the Secretary of State for Defence that he envisaged the strengthening of local administration at the grass roots level through village councils, in keeping with the necessity to have policies for power sharing coming from the people at the grass roots level.

Responding to Mr. Liam Fox’s interests in the constitutional process for power sharing, the President said that discussions were already underway with Tamil political parties that agreed to work within a united Sri Lanka, and that he would like to see the proposals for change come from the new political leaders of the Tamils people, instead of imposing solutions from above, that would be counterproductive.

The President and Mr. Fox discussed areas of assistance to Sri Lanka from the UK, especially in areas of infrastructure development, particularly in the North, and the opportunities now available in Sri Lanka for investment by the private sector in the UK. There was agreement that the friendship between Sri Lanka and the UK should be strengthened in the new situation of peace and moves for reconciliation in the country.

(Source: The Policy Research & Information Unit The Presidential Secretariat of Sri Lanka)

LLRC TESTIMONY CONTINUES, IS AVAILABLE ONLINE

Sri Lanka’s Lessons Learned and Reconciliation Commission, which is examining events in the conflict against the LTTE dating back to 2002, has established a website where testimony given before the commission is posted. The commission continues to hold hearings throughout Northern Sri Lanka, and response to the LLRC’s requests for statements and testimony has been strong. All the hearings are open to the public.

The commission’s website address is: www.llrc.lk.

UN: SRI LANKA HEALTHCARE ON TOP AGAIN

The United Nations Population Fund (UNFPA) has acknowledged Sri Lanka’s lead in important healthcare indicators such as child mortality rate, prevention of communicable diseases, maternal mortality rate, life expectancy and emphasis on primary healthcare in ‘The State of World Population 2010’ Report released Dec. 14, 2010.

According to the report, Sri Lanka is at the forefront in providing quality health services in the South Asian region, recording the highest rates in its significant indicators.

Other South Asian countries in the report include India, Pakistan, Bangladesh, Nepal, Bhutan and Maldives.

The Infant Mortality Rate per 1,000 births in India in 2010 was 52, Pakistan 61, Bhutan 41, Nepal 38 and Maldives 20, while Sri Lanka had only 15 deaths.

The Maternal Mortality rate per 100,000 births stood at a high 830 in Nepal while in India it was 450, Bangladesh 570, Pakistan 320, Maldives 120, with Sri Lanka only 58 deaths.

Life expectancy in India respectively for male and female was 62 / 66 years, Bangladesh 68 years for both, Pakistan 66 / 67, Nepal 66 / 68, Maldives 70 / 74 and Sri Lanka 71 and 74 years.

The country with the bleakest indicators in the world, Afghanistan records 152 infant deaths per 1,000 births and 1,800 maternal deaths per 100,000. The life expectancy in Afghanistan is only 44 for both sexes.

According to the report, the Infant Mortality rate, Maternal Mortality rate and Life Expectancy in Sweden, Australia and Switzerland stood at 3, 3 and 79 / 83, 4, 4 and 79 / 84 and 4, 5, and 79 / 84 respectively .

‘The State of World Population 2010’ was released to coincide with the 10th Anniversary of the United Nations Security Council’s landmark Resolution 1325, which aimed to put a stop to sexual violence against women and girls in armed conflict and to encourage greater participation by women in peace building initiatives.

“Governments need to seize opportunities arising out of post-conflict recovery or emerging from natural disasters to increase the chances that countries are not just rebuilt, but built back better and renewed, with women and men on equal footing, with rights and opportunities for all and a foundation for development and security in the long run,” the report said.

Full report: http://www.unfpa.org/swp/2010/web/en/pdf/EN_SOWP10.pdf

(Source: Government of Sri Lanka)

TOURIST ARRIVALS INCREASE IN NOVEMBER AND TOP 600,000 FOR 2010

Marking a remarkable historical moment, Sri Lanka Tourism celebrated the targeted 600,000 tourist arrivals on 14th December 2010.

Tourism officials headed by Sri Lanka Tourism Chairman Dr. Nalaka Godahewa welcomed the guest at the Bandaranaike International Airport on 14th December 2010 when he touched down at 3.40pm.

Commenting on his arrival, Dr. Godahewa said “This marks a significant moment in the history of tourism. Sri Lanka is now on the world map as a unique safe destination.

The full credit for this achievement should go to His Excellency the President, Mahinda Rajapaksa who brought us peace into the country and it is peace that enabled us to achieve 46% growth in tourist arrivals in 2010” Dr. Godahewa said.

Dr. Godahewa also added “With this, we hope to exceed 700,000 tourist arrivals for Visit Sri Lanka 2011”

The lucky guest was presented with a 6 night-7 day package for two which includes hotel accommodation, ground transport and entrance tickets to historical tourist sites in the island.

In November alone, tourist arrivals in Sri Lanka went up 63.1% to 72,251, compared to November 2009 which was only 44,311, according to the latest figures released by the Sri Lanka Tourism Development Authority.

Figures for November showed an increase in the number of arrivals from Western Europe, South Asia, East Asia, Middle East and North America.

Tourists arrivals from Western Europe, the traditional tourist generating market, rose 61.7percent to 24,594 in November 2010. The number of visitors from the UK went up 54.5 percent to 9,788, those from France up 127.0 percent to 3,232 and from Germany up 41.6 percent to 4,862.

South Asian visitors rose to 65.2 percent to 22,091 with tourists from India up by 77.3 percent to 15,550, from Maldives up 42.0 percent to 5,091 and from Pakistan up 44.2 percent to 982.

Arrivals from Australasia went up 70.1 percent to 4,178 and from East Asia up by 69.2 percent to 7,951. Japanese visitors increased 74.9 percent to 1,420, visitors from Malaysia rose 66.9 percent to 1,893.

Visitors from Singapore rose 94.9 percent to 1,536.

Tourist arrivals in the country increased sharply from May 2009 after the restoration of peace.

Since the end of the conflict in 2009, Sri Lanka has seen an increase in tourism figures.

Sri Lanka Tourism launched “Refreshingly Sri Lanka Visit Sri Lanka 2011” with 12 events spread across the year.

Refreshingly Sri Lanka Visit 2011 will have twelve different theme events happening throughout the year, in keeping with the 12 letters that has been used for the tagline “Wonder of Asia”.

Next year Sri Lanka Tourism will be offering similar complimentary surprise packages to the 250,000th, 500,000th, 600,000th and 700,000th tourist that arrives in the island to mark Refreshingly Sri Lanka Visit 2011.

Measures have been taken to achieve a 31 percent increase in tourist arrivals in 2011, a Sri Lanka Tourism Development Authority official said.

According to the projected target, over 750,000 tourists were expected to visit Sri Lanka in 2011. Over 620,000 tourists are expected to visit the country this year.

The arrival of 620,000 tourists is considered a significant milestone in the tourism industry since over 50,000 tourists will  have reached the country every month in 2010.

During the next year, tourist arrivals will significantly increase as a result of the peaceful situation in the country. That has enabled tourists to visit all parts of the country. Besides, many new tourist attractions and locations situated especially in the North and East are a large number attracting tourists. Nilaveli and Trincomalee are among such eye catching tourist attractions.

“Therefore it is not difficult to achieve the 750,000 target during 2011,” said a tourism official. “Considering the prevailing favourable situation, this was an easily achievable target.”

BCGR REHABILITATED EX-LTTE COMBATANT QUALIFIES FOR UNIVERSITY ENTRANCE

Nallathambi Niroshan has a success story to tell, but he’s just one of many former LTTE militants who have experienced rehabilitation and peacefully rejoined Sri Lankan society.

And in Niroshan’s case, rejoining civil society means doing something he never dreamed of before: Going to university.

“I never thought I would receive this opportunity to get through the G.C.E. (A/L) exam and qualify to enter the university,” Niroshan said. “The special school run by the Bureau of the Commissioner General of Rehabilitation (BCGR) under the Catch-Up Education Scheme enabled me to achieve these results. I am thankful to the BCGR for all what they provided to me for my studies. They provided us everything. We only had to study in the rehabilitation centre.”

Niroshan was conscripted to LTTE in 2007 just several weeks ahead of his G.C.E. Advanced Level Examination.

Following rehabilitation, a smiling Niroshan succeeded in the A/L Examination with two Bs and a C and is now eligible to receive university education in Tamil to become a fully-fledged citizen of this country after receiving graduation.

His father, Thilagan Nallathambi, was full of praise for the BCGR and for everyone who helped his son to shun violence and become a peaceful citizen. Niroshan is the eldest in a family of five children. Father and son were together when Niroshan received his examination results, the same day a reintegration workshop was on.

Those revelations came to the fore during the weekend when the BCGR, with the intention of highlighting the importance of reconciliation and reintegration among newly resettled families and rehabilitees, conducted a full-day awareness programme at Mullaittivu. Niroshan sat for his examination at the Protective Accommodation and Rehabilitation Centre, Tamil Primary School in Commerce stream last August.

The arrangement, covering Mullaittivu, Karaithurai Pattu and Maritime Pattu Divisions in Mullaittivu District Secretariat, was attended by Brigadier Sudantha Ranasinghe, Commissioner General Rehabilitation, Brigadier S.K.G.N.B. Ehelamalpe, Commander 591 Brigade, Officer-In-Charge at Mullaittivu Police, Grama Niladharis of 33 Gramaseva Divisions and a large gathering of beneficiaries. Two representatives, Clive Jackniek and M. Suchiko from International Organization for Migration (IOM) also graced the occasion as resource personnel and offered their support.

Source: Sri Lanka Army

Like Niroshan, a group of 170 ex-LTTE combatants who were rehabilitated by the Bureau of the Commissioner General of Rehabilitation (BCGR) also sat for the G.C.E. (Ordinary Level) examination in Vavuniya recently.

Those ex-combatants had been forcibly abducted by the terrorists while they were studying in schools in Wanni, Mannar, Mullaittivu and Kilinochchi. They later surrendered themselves for the security forces during the final stage of the battle and then underwent comprehensive rehabilitation program introduced to prepare them to sit for the G.C.E O/L examination year 2010.

Meanwhile, 40 ex-LTTE combatants who sat for the GCE (A/L) examination last August would qualify for university entrance according to the Z-score marks they obtained, Commissioner General of Rehabilitation, Brigadier Sudantha Ranasinghe said.

(Source: Sri Lanka Defense Ministry)

PRESIDENT RAJAPAKSA NOTES SAARC ANNIVERSARY

“We now stand on the threshold of our continued onward journey towards the next generation of cooperative efforts.”

Sri Lankan President Mahinda Rajapaksa recently marked the occasion of the 25th anniversary of the South Asian Association for Regional Cooperation with the following statement:

“Today, we in South Asia commemorate the twenty-fifth anniversary of the South Asian Association for Regional Cooperation (SAARC) and I have the pleasure on this occasion to extend warm greetings and best wishes of the Government and people of Sri Lanka to the Governments and people of South Asia.

“As I stated on the occasion of the Silver Jubilee Summit in Thimphu in April this year, our hallmark and indeed our strength, is our collective identity, promoted and strengthened by over two decades of regional cooperation within the SAARC framework. This identity has been, and remains to be, a crucial factor in forging closer links among our governments and more importantly, amongst our people. As SAARC commemorates its twenty-fifth year, we must all take pride in the efforts taken since 1985 to build our Association. We now stand on the threshold of our continued onward journey towards the next generation of cooperative efforts.

“As we observe the twenty-fifth anniversary of SAARC, we must resolve to work diligently towards the noble goals that we have set for ourselves. We must take bold steps to address the challenges before us which include translating our decisions and agreements into action and finding ways and means of enabling freer movement of people, goods, services and ideas within South Asia to build a more prosperous region for the benefit of our people.

“I reaffirm on this occasion, Sri Lanka’s firm and continued commitment to SAARC and its objectives. “

EXTERNAL AFFAIRS MINISTER PEIRIS: LTTE COULD  HAVE DESTABILIZED ASIA

The LTTE’s separatist war in Sri Lanka could easily have destabilized the region. The fact that it did not happen is because of the preventive actions taken by Sri Lanka during and after the war to ensure stability. This is the regional significance of the current situation in Sri Lanka.

In a wide-ranging address on Tuesday night to a representative gathering of journalists, diplomats and INGO and NGO officials at the Foreign Correspondents Club of Thailand in Bangkok, the Minister of External Affairs Prof G.L. Peiris dwelt on the reasons why the Sri Lankan conflict did not spill over and cause instability in region.

Prof. Peiris who is in Bangkok to attend the Asia-Middle East Dialogue (AMED 111) as a keynote speaker, was speaking on “Sri Lanka: the war and after”, said the conflict had the potential to destabilize the region and stressed that countries in Asia should coordinate their policies and actions to ensure that such conflicts do not endanger stability and therefore the economic progress of the region.

No country can deal with such a situation alone and needs regional assistance to maintain a stable status quo, he said.

Prof Peiris pointed out that often in long standing wars, as the one against the terrorist LTTE, there is a tendency for the proliferation of small arms and for weapons to find their way into the hands of others not directly involved, as the Cambodian experience has shown. “We saw to it that in the case of Sri Lanka it did not happen,” he said.

The proliferation of small arms that could lead to low intensity wars and insurgencies is a matter of concern to sections of the international community.

Another crucial outcome was the way in which the Sri Lanka government and its security forces ensured the security of the sea lanes. These sea lanes are the life lines for several countries in the region. Unlike in some other parts of the world where pirates disrupt shipping and are known to take hostages, the sea lanes around Sri Lanka have been kept safe and secure for international shipping, for the movement of goods and people.

Empirical evidence shows that terrorist groups do not act alone, often working in collusion with similar groups helping each other in various ways for mutual advantage.

“But we managed to contain this,” the minister said, and hence the LTTE was not able to get the help of other groups to pursue their terrorist intentions.

The External Affairs minister also pointed out that there had not been a large scale exodus of refugees to neighbouring Tamil Nadu which could have caused problems in that majority Tamil state especially as elections were due there.

He said the vast majority of people who had been displaced by the war have already been resettled in their original places of domicile or in new homes.

The Minister said that foreign countries had appreciated the steps taken by Sri Lanka with regard to displaced persons.

Prof Peiris said that Sri Lanka has been vigilant about certain aspects of LTTE operations and there is no question the Tamil Tigers will be allowed to surface again.

But in tackling a major issue like the long drawn-out war that has now ended Sri Lanka needs the help and assistance of other nations. He said that Sri Lanka has had the support of Thailand in this regard and the vigorous action Thailand has taken in recent times to crackdown on human smuggling is a case in point and is highly appreciated.

Answering questions the minister said the government was following a multi-pronged strategy to consolidate the gains made with the defeat of the LTTE. It was engaged in development work in the north and east that had been hampered for nearly three decades by the conflict. The settling of the IDPs is only one aspect of the structured strategy in place.

Prof Peiris said that major development projects including huge infrastructure schemes are being undertaken with the help of several foreign countries so that people in the north and east will reap the benefits of these developments and will have a profitable livelihood and could live in dignity.

In response to another question he said that simultaneously the government is putting in place a structured political dialogue. President Rajapaksa is having discussions with Tamil leaders to find a way forward. Shortly provincial council elections will be held on top of the local government elections that were held previously in Jaffna and Vavuniya. This would provide elected Tamil politicians from the north, a process long denied the Tamil people by the LTTE.

Referring to the Sri Lankan Tamil Diaspora, Prof Peiris said it was not a monolith as some believed. Sri Lanka was engaged in talking to some sections inviting them to take a hand in the country’s economic and social development and help improve the livelihood of people in the north and east. He said there had been a positive response from those sections of the Tamil community who sense the change in Sri Lanka

(Courtesy of Sri Lanka Embassy, Bangkok)

MORE ALLOCATION FOR BATTICALOA DEVELOPMENT

The government has already identified projects for the next year to develop the infrastructure facilitates in Batticaloa.

Accordingly, allocations have already been set apart for development projects targeted for next year. Over 3,500 projects were launched in the Batticaloa area during the year 2010, and 89 percent of the work has been completed and vested in the public.

Under the 2011 plan, 378 million rupees by the Eastern Provincial Council, 158 million rupees under the Maga Neguma Project and 30 million rupees under the Decentralized Budget have been allocated for projects of Batticaloa in next year.

(Source: Government of Sri Lanka)