Opposition critiques Central Bank’s 2012 Annual Report in Parliament

The Central Bank’s 2012 Annual Report as well as the state of the economy came under critique by the Opposition at the adjournment motion debate on the flagship publication of the monetary authority yesterday.
Opposition legislator Ravi Karunanayake who moved the motion said: “The Central Bank of Sri Lanka (CBSL) report for 2012 has been presented in the Parliament.

The economy reflected through the CBSL Annual Report reveals that there is a severe dependence on foreign borrowings and the excessive debt burden has led to a debt trap in the country. Many State-Owned Enterprises are running huge losses and no corrective action seems to have been made. As a result, this is a huge burden on the already impoverished Sri Lankan citizens. The unemployment referred in the CBSL report seems to be very hazy and there is an over-reliance on self-employed people to show a lower unemployment figure, thus is not revealing the real impact of the work force. The trade balances are creating a sever deficit thus impacting on the balance of payment creating acute crisis.”
Seconding the motion, UNP MP Dr. Harsha de Silva, who confirmed that the basis of his criticism was to ensure the development of the nation but not to tarnish the image of the Governor Nivard Cabraal or the learned staff at the CBSL, said: “When the CBSL Annual Report was launched, the Governor said that per capita income should be increased to US$ 4,000 before 2016 and he is working on that target. We are also happy about it and have no personal rivalry with the Governor. I do a constructive criticism while respecting the pool of highly qualified economists housed within the CBSL. But being in the Opposition it is our duty to show any issues.”
“According to the position where we were last year, if we are to meet the US$ 4,000, a gap of US$1,165 had to be bridged. The annual increase has to be US$ 291 even though the actual increase was limited to US$ 87. Unfortunately the actual increase was lesser than US$ 87 in 2011 for the simple reason of using 20.87 million as the base population. After the Census was carried out, it was found the population in Sri Lanka is 20.39 million.  So, there is no huge economic transformation taking place according to predictions of the CBSL. The economic development expected at 9% was around 6.3% in 2012. The expected growth for 2013 was 9.5%. Again it has gone down 6% during the first quarter of this year.
“The CBSL recently came to an agreement with the Thompson Advisory Group in America. The value of this transaction was US$ 800,000 and the simple task was to convince the US President and the Congress highlighting the post-war economy of Sri Lanka to be identified as high growth. This is an image building exercise justified by the CBSL as an effort to counter attack the political and campaigns carried out to tarnish the image of Sri Lanka in the international arena. CBSL need not worry about building a political image for itself but leave it to the Parliament of Sri Lanka.
“For the first time in this house I am revealing these facts. The wages were not increased according to the inflation. According to page 108 of the CBSL Annual Report, the central government servant salary face value from 2010 to 2011 has reduced by 3.3%, non-executive worker and minor employee salaries have reduced by 3.4%, salaries of teachers and lecturers salary have also reduced by 2.4%, the workers in the wages boards and industries have also experienced reduction of 6.9% of the face value. These are not international conspiracies but the ground reality. The structural shift in the growth path upwards as expected after the war did not take place. The BOI expected US$ 4 billion in FDI, but could not meet at least one quarter of it. Over 25% of the SMEs have collapsed during the past two to three years, according to the Chairman of the Chamber of Small and Medium Enterprises. The SME sector contributes 75% of GNP and it is the backbone of the country. If you watch Pusswedilla, you will see how the ordinary people interpret the country situation,” he said.