Corruption a major reason for Sri Lanka’s small savings

SL 18% of GDP, India over 30%, China over 50%  

by Zacki Jabbar 

Sri  Lanka has a  very small saving in relation to its GDP, while countries such as China and India were way ahead. 

Western Provincial Council UNP member, Harshana Rajakaruna said that long term projects were usually implemented through a country’s savings, but  the Rajapaksa regime had committed suicide by borrowing at commercial  rates  as high as  nine percent.

While India had a savings rate of over 30 percent  to GDP, it was over 50 percent in China, he said adding that Sri Lanka had a low saving of just 18 per cent with corruption being one of the biggest contributors. "It had also contributed to the National debt which was  Rs.1.8 trillion  after 57 years of independence zooming to Rs.6.6 trillion  in the last eight years, of which over Rs.3 trillion had accumulated after the war had ended in May 2009". 

 The Provincial Councillor pointed  out that the biggest drawback was the lack of Foreign Direct Investment. It was not flowing in as predicted with the end of the war due to the government’s scant regard for the rule of law, human rights, media freedom and the independence of institutions such as the public service, police and judiciary.

 Low interest development loans, he noted, were available with international  lending agencies on condition that a country adhered to internationally accepted democratic  principles. But, the current regime’s track record on good governance was so bad that it  could not aspire to obtain  such concessions.

 It was UNP led administrations  which constructed the huge hydro, power and industrial projects, but the country’s debt had never risen at the speed at which  it had occurred under the Rajapaksa government, Rajakaruna said. 

 Last year’s budget gave huge concessions to the import of racing cars. This year  it was dogs who had benefitted with taxes on their types of foods being reduced, he observed while noting that humans in comparison had been called on to pay more for food, education, health and transport.

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