Annual Report 2010 - Ministry of Finance and Planning

Ministry of Finance and Planning Sri Lanka > Annual Report 2010six years. This necessitates increasingwater use efficiency in irrigation andtapping non-conventional modes ofwater supply effectively. This includeswater recycling, large scale rain waterharvesting systems, desalination etc.A consistent investment on drinkingwater is assured to achieve the targetof 95 percent safe drinking water coverageby 2015.Environmentally FriendlyUrban DevelopmentGovernment aims to develop a networkof cities and townships which are wellconnected with each other and the restof the world. Colombo and other maincities are to be developed as green cities.Solid waste management, drainageand sewerage facilities, implementationof zoning plans, developing systematictransport facilities and minimizingtraffic congestions are the main thrustsidentified in the urban sector.Sports EconomyMajor sport events will boost theeconomy and global image of thecountry. This type of activities allows acountry to cope up with wide range ofissues which in turn help to accelerateeconomic development. Major sportevents boost tourism, improveinfrastructure, organizational capacityand media coverage etc.International level sport relatedprofessionals such as trainers, coaches,umpires, physiotherapists, etc. can alsobe a valuable asset in this sector.In the backdrop of this comprehensivepolicy regime, the year 2010 wasexpected to lay the foundation forsuch development aspirations. Towardsrealizing this goal, internationallyaccepted stadiums and other sportrelated infrastructure have beendeveloped at provincial level andnational level to promote a sportbasedeconomy.Self Economy –Divi NegumaThe one million home economy units(backyard economies) programmehas been designed to encourage awide range of economic activitiesspanning from gardening, vegetable/fruitcultivation, environmentfriendly living arrangements, homebased industries, and services etc.to insulate households from variousmarket vulnerabilities on their livingas well as to promote healthy familylifestyles, particularly of ruralSri Lanka.Macroeconomic OverviewThe Sri Lankan economy registered animpressive growth rate of 8 percentin 2010 with strong performancein all three sectors of agriculture,manufacturing and services therebyrecovering robustly from the lowergrowth rate of 3.5 percent recordedin 2009. This was the second highestannual growth rate achieved sincethe independence in 1948. Withthis encouraging performance, thecountry’s per capita income hasincreased to USD 2,399 in 2010 fromUSD 2,057 in 2009.The economic growth in 2010 wasunderpinned by a number of majorfactors;− the steady recovery of domesticeconomic activity and the enhancedinvestor confidence in the midst ofextremely peaceful environment inthe country following the successfulcompletion of the humanitarianoperation in May 2009− the post-conflict economic reintegrationof Northern and Easternprovinces− Government’s committed efforts inresolving infrastructure bottleneckswhile continuing rehabilitation,reconstruction and livelihoodrestoration activity in the conflictaffected areas− pursuance of conducive policieswhich are blended from pastmistakes, prevailing conditions andemerging developments in thedomestic and international arena− improved macroeconomicconditions and− the gradual recovery of the globaleconomy from one of the deepesteconomic recessions, which wasoriginated consequent to the globalfinancial crisis experienced in 2008.Real Economy GrowthIn 2010, the Agriculture sector grewby 7 percent compared to the lowergrowth of 3.2 percent recorded in2009 thereby strengthening thesupply side of the economy to reduceinflation while providing employmentopportunities, particularly for thepeople in the rural sector. Reflectingthe gradual recovery of domestic andexternal demand, the Industry sectorindicated a growth rate of 8.4 percent,the highest since 2002, supported by ahealthy growth in all the sub sectors inthe economy.25