In the next few years, Sri Lankan economy will reach a Gross Domestic Production (GDP) value of US$100 billion, up sharply from the slow paced economy of about US$ 24 billion GDP in 2004, Central Bank Governor Ajith Nivard Cabraal said.
He made these remarks at the 24th Anniversary Convention of the Association of Professional Bankers’ of Sri Lanka (APB) held recently at the Cinnamon Grand, Colombo.
Explaining further he said, “When that US$ 100 billion milestone is reached and the per capita income rises above US$ 4,000, we would find that the structure and strength of our economy would change materially.
“At the same time as we are on course to achieve that goal, we still need to prepare ourselves for that new scenario from now onwards.”
“It is important for our bankers to have reflected on the vast impending changes that are going to take place as we march towards this goal. Thus, preparing our bankers for that new platform; for that new paradigm shift and for this new emerging situation is crucial in positioning themselves in the right direction. I think these are surely the matters that should be addressed by each one of our bankers in their own corporate planning sessions, and I would urge you to do so, without delay.
The practices of re-engineering, re-inventing and re-positioning the banking community will be extremely vital, when we approach the future that is unfolding before us, at today’s phenomenal pace.
“We must remember that this transformation taking place in the banking sector, more than in any other sector, as well as in many economies, including Sri Lanka. In Sri Lanka, this shift and impact may be even faster, wider and more visible than in others, because of our faster growth. However, we need to be conscious of these issues all the time or otherwise, we will get left behind,” the Governor noted.
Cabraal commenting on the economic measures taken said, “From the point of view of the Government and the Central Bank, we want to create and maintain a conducive platform for the economic stakeholders of our country, so that they are able to work through their normal course of business in a stable, safe and conducive environment.
“As a part of that effort, today, we are looking at the payment and settlement systems that we need to put in place; the type of supervisory approach we should implement; the framework of risk analysis and risk parametres that we should set for banks as well as for the economy; the economic policies that needs to be introduced when the country approaches a truly middle income nation status; the level of infrastructure and business practices that we must set up and maintain to compete with more advanced nations.”
“These initiatives and many other improvements are already being planned as well as being implemented, and that type of focused progress must surely give our growing stakeholder network a high degree of comfort,” the Governor said.
Sri Lanka’s macro focus in going forward would be in five key areas;
1. Creating a conducive and stable environment and platform for all economic stakeholders.
2. Preparing the economy for the post US$ 4,000 per capita scenario that will unfold in a few years, just like preparations were made for the post conflict era, before the conflict ended.
3. Creating financial inclusiveness for all citizens.
4. Building and creating spaces within the economy to absorb any future shocks.
5. Improving the risk management skills of all financial institutions so that those are better equipped to deal with volatility.