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April 6, 2012, 8:02 pm
Mr. Nihal Samarasingha (NS) in his letter to the opinion column of The Island of 5th April 2012 indicates a number of statistics to "prove" that the Sri Lanka Economy was not in a mess.
NS used the high GDP value reported in 2010 and 2011 to prove that the economy of the country is not in a mess. A high GDP does not necessarily indicate an increase in the productivity of a country and vice versa, and it can be considered as a dumb value with no significance. (For further details on GDP please refer "Misguiding Economic Statistics " in the Midweek Review of The Island of 2 Nov. 2011
NS refers to a low unemployment rate of 4.2 It would be good if NS can indicate from where he got this value and what he means by unemployment. For example does NS consider a person working one day per week employed or unemployed? To what category do farmers belong to?
NS indicates poverty is less than 5%. How did he arrive at this figure? In 2008, the World Bank came out with a figure of $1.25 as the poverty line. Thus according to World Bank, any person getting an income of over $1. 25 (app. Rs. 150) a day is not poor. In the present situation where the prices of many items have gone up Is this data valid?
NS indicates that our foreign reserves are at a comfortable level of more than three months of imports. NS appears to be not aware that by the end of the third quarter of 2001, our debts were around Rs. Billion 5,000. Out of this a substantial % constitutes foreign loans. This excludes the US $ 400.million which has been just approved by IMF.
Some facts/data given by NS in his letter published in The Island of 5th April 2012, to indicate that our economy is not in a mess are not related to the economy of the country. The figures given in the following table indicate whether our economy is in a mess or not.
If our economy is not in a mess there was no need to get a $2.6 billion loan from International Monetary Fund, and there was no need to impose taxes on even food items. It is better to face the reality and take appropriate measures to revive the economy.
Dr C.S.Weeraratna
(csweera@sltnet.lk)
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=49165
Mr. Nihal Samarasingha (NS) in his letter to the opinion column of The Island of 5th April 2012 indicates a number of statistics to "prove" that the Sri Lanka Economy was not in a mess.
NS used the high GDP value reported in 2010 and 2011 to prove that the economy of the country is not in a mess. A high GDP does not necessarily indicate an increase in the productivity of a country and vice versa, and it can be considered as a dumb value with no significance. (For further details on GDP please refer "Misguiding Economic Statistics " in the Midweek Review of The Island of 2 Nov. 2011
NS refers to a low unemployment rate of 4.2 It would be good if NS can indicate from where he got this value and what he means by unemployment. For example does NS consider a person working one day per week employed or unemployed? To what category do farmers belong to?
NS indicates poverty is less than 5%. How did he arrive at this figure? In 2008, the World Bank came out with a figure of $1.25 as the poverty line. Thus according to World Bank, any person getting an income of over $1. 25 (app. Rs. 150) a day is not poor. In the present situation where the prices of many items have gone up Is this data valid?
NS indicates that our foreign reserves are at a comfortable level of more than three months of imports. NS appears to be not aware that by the end of the third quarter of 2001, our debts were around Rs. Billion 5,000. Out of this a substantial % constitutes foreign loans. This excludes the US $ 400.million which has been just approved by IMF.
Some facts/data given by NS in his letter published in The Island of 5th April 2012, to indicate that our economy is not in a mess are not related to the economy of the country. The figures given in the following table indicate whether our economy is in a mess or not.
If our economy is not in a mess there was no need to get a $2.6 billion loan from International Monetary Fund, and there was no need to impose taxes on even food items. It is better to face the reality and take appropriate measures to revive the economy.
Dr C.S.Weeraratna
(csweera@sltnet.lk)
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=49165
