A warm welcome to all and good morning!
Hon. Dr Harsha de Silva, distinguished guests, colleagues, ladies and gentlemen. Thank you for joining us this morning at the launch of this year’s second Development Update.
Let me start with a word on why this product we are launching today is important.
The Sri Lanka Development Update is the World Bank’s bi-annual macroeconomic publication. In addition to being a wholly World Bank assessment of the economy; it has two main aims.
First, it reports on Sri Lanka’s key economic developments over the past six months and tries to forecast what this means for the country over a longer term, as well as globally. Based on these developments, ongoing and potential policy changes, the Bank updates the outlook for Sri Lanka’s economy and social welfare.
Second, the Update provides an in-depth examination of a select set of economic and policy issues, as well as an analysis of medium-term development challenges. It is intended to inform a wide audience, including policymakers, business leaders, financial market participants, and the community of analysts and professionals interested in Sri Lanka’s economic progress.
In my view, Sri Lanka stands at an important juncture today and it can become Upper Middle Income in the next few years. It can become a country with increased growth and with more and better jobs for its people with an ability to assist less-privileged citizens.
The SLDU is rich in content, and begins by examining the state of the economy; while also highlighting changes that have taken place in the last few months. It does not dictate mono-solutions but combs a wide range of data to propose evidence-based potential solutions. It alludes to the fact that reforms are needed to transition to a new growth model; while also supporting the directions proposed in the recently launched Vision 2025.
The report recognizes that transitioning to a new model presents significant opportunities but it is also not without risk. The key is in managing real and perceived risks – being proactive while also being deliberate.
The SLDU also makes a strong case for managing risks in a holistic and integrated manner given the many challenges that the government is facing. Not all reforms will have similar impacts on those touched by them - some will be largely positive; while others will involve negative externalities on some households and firms at least in the short-run. The reaction should not be to stop reforming; but rather to ensure that these issues are mitigated as best as possible, including the provision of support for the vulnerable to shore them up during the critical period.
Likewise, it makes the case to be well prepared to face the risks of public debt and contingent liabilities and natural disasters to create new opportunities along the way. As impacts of many of these reforms tend to be interlinked; the SLDU focuses on what integrated risk management could look like.
Finally, the report calls on the importance of continuing with vital reforms, some of which have been moving slowly; impacting Sri Lanka’s opportunity to improve its attractiveness as an investment destination.
2017 has seen positive progress; but much remains to be done. The World Bank remains a committed development partner. But ultimate success will require the participation of the general citizenry, government, development partners, private sector, civil society and many others that will also benefit from the reforms. It is going to be a long road, but one that is worth walking if Sri Lanka is to become the prosperous and inclusive country it so aspires to be.