Better Road
Sri Lanka should continue investments, improve skills, rule of law: ADB chief June 18, 2014 (LBO) - Sri Lanka should look at private partnerships to expand infrastructure, reform state enterprises and strengthen the investment climate by improving rule of law and governance, Asian Development Bank chief Takehiko Nakao said.Sri Lanka's government is investing about 6 percent of gross domestic product in physical infrastructure which was higher than some countries in the region, and was also fast rebuilding war-torn areas, he said.
Sri Lanka should look at public private partnership to continue physical infrastructure investments, Nakao said.
Sri Lanka's growth was also averaging 7 percent and in areas where a war ended in 2009 it was about double that, which was remarkable, he said. The ADB was forecasting a growth of 7.5 percent for 2014 and 2015 for Sri Lanka.
ADB was also backing the government efforts to improve skills of the labour force and also use the country's geographical location to become a logistics hub, he said.
Sri Lanka had also stable macro economic conditions now with low inflation, and stable exchange rate, which should be maintained, Nakao said.
Sri Lanka's inflation rose and the currency plunged in 2012 after the government subsidized energy with bank loans ultimately accommodated by the central bank credit in 2011.
To sustain growth Sri Lanka should improve its investment climate and facilitate trade and further improve rule of law and governance.
"Governance and rule of law is the basis of the investment climate," Nakao said responding to reporter's questions.
In its absence efforts will be spent on rent seeking will take place, he said. Nakao said Sri Lanka was making "serious efforts" to progress and the ADB will continue to support such efforts.
ADB says will place greater emphasis on human resource development such as education and skills training, while maintaining focus on infrastructure and private sector development.
By end 2013, ADB had given Sri Lanka 6.17 billion dollars in loans and 358 million US dollars in grants.It had financed a breakwater for Colombo Port allowing its expansion as well as expressways, power, water and education.
Nakao said Sri Lanka's geographical location made it ideally placed to connect South East Asia, South Asia, Africa and Europe.
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