Sri Lanka Poverty Down to 10pct. Plans to Double Per Capita Income to $4,000 by 2016

09th September 2010, www.island.lk

Central Bank Ajith Nivard Cabraal said Sri Lanka’s poverty rate has declined to around 9 to 10 percent.

"The poverty rate was estimated at 15 percent in 2007 and our recent estimates suggested that the poverty rate could be lower now, somewhere between 9 to 10 percent, but we are still testing the numbers," Cabraal said speaking to top corporate heads at Temple Trees yesterday morning.

"The main thrust of the government’s economic policy is to eliminate poverty in Sri Lanka and there is a conscious effort to bring poverty levels down," he said.

The government plans to double the per capita income to US$ 4,000 by 2016, but investments would have to grow substantially.

Cabraal said the end of the conflict and the unprecedented political stability brought about with the passing of the 18 amendment would give investors a ‘feel good’ impetus to invest in the country.

"But things are not going to happen on their own," he said, adding that the environment in which to do business in Sri Lanka had to change. "There is a long way to go and there are many challenges but we would get there slowly and steadily and changes will soon be felt."

Sri Lanka Upgraded to Middle Income Country Status

21st January 2010, asiantribune.com, By Sugeeswara Senadhira

Sri Lanka received a major recognition as a middle income country. The International Monetary Fund (IMF) has upgraded Sri Lanka into its Middle Income Emerging Markets by its latest listing on January 11, 2010.

Sri Lanka will now be recognised as a country with a 'Middle Income Emerging Market' status with The International Monetary Fund (IMF) graduating Sri Lanka from the list of Poverty Reduction and Growth Trust (PRGT) eligible countries on 11 January 2010, the Central Bank said in a press release today.

This upgrade would facilitate Sri Lanka to project itself strongly in international financial and capital markets, states the Central Bank.

A country graduates from PRGT only if it, (i) has enjoyed income per capita well above the International Development Association (IDA) threshold for a number of years, (ii) has the capacity for durable and substantial access to international financial markets, and (iii) does not face serious short-term vulnerabilities.

According to the Central Bank, the Executive Board of the IMF has taken into account the following specific factors in considering of Sri Lanka’s graduation.

i. The strong economic performance in recent years that has substantially lifted Sri Lanka’s per capita Gross Domestic Product (GDP) to US dollars 2,014 by 2008, well above the prevailing IDA threshold, and its per capita Gross National Income (GNI) has not been on a declining trend for the last 5 years. The strong growth performance has signalled substantial resilience to shocks, including shocks to oil prices, and to the expiration of the Multi-Fibre Agreement.

ii. The availability of an IMF Stand-by Arrangement facility as approved in July 2009 to cushion the impact of the global crisis. Further, the economic developments under the programme have been stronger than expected, with GDP growth expected to return to almost pre-crisis levels in 2010, while exports have been showing signs of recovery.

iii. The country’s public external debt being projected to decline gradually over the medium term. Although debt dynamics remain sensitive to currency depreciation and export shocks, the timely implementation of fiscal consolidation, as envisaged in the Stand-by Arrangement programme, will be crucial to ensure that the public debt remains on a sustainable path.

iv. The country’s ability to access international capital markets in the past years and its
ability to meet the market access criterion. Oversubscription of the recently issued five-year sovereign bond reflected the progress made under the Fund-supported program, and signalled good prospects for continued access to international capital markets.