ONE. Press Release
On the threshold of entering into an era of unprecedented economic growth, spotlight falls on Sri Lanka in 2016 with the much awaited Sri Lanka Economic Forum 2016. Under a theme of “Steering Sri Lanka towards Sustainable & Inclusive Development”, the Sri Lanka Economic Forum is held in Colombo at the Cinnamon Grand on the 07th and 08th of January 2016 under the patronage of His Excellency Maithripala Sirisena, President of Sri Lanka and Hon. Ranil Wickremesinghe Prime Minister of Sri Lanka. The Forum will be graced by the likes of international investor and Founder Chairman of Open Society George Soros and Nobel Laureate Economist Joseph Stieglitz, in addition to a glittering line up of internationally acclaimed experts and other distinguished visitors.
The findings of the preliminary study on Sri Lanka carried out by The Harvard University’s Centre for International Development, would be addressed at the Sessions. The study identified four key areas of risk and opportunity that are believed to be strategic in supporting sustained and an inclusive long-term economic growth for Sri Lanka.
These are outlined as macroeconomic and fiscal stability, structural transformation and competitiveness, urbanization and development and regional development and social inclusion.
Macroeconomic and fiscal stability –Sri Lanka will face a formidable choice in determining the establishment of a solid foundation towards sustaining long-term growth through sound monetary and fiscal policy.
Structural transformation and competitiveness – The sustainability of economic growth calls for Sri Lanka to convert its comparative advantages towards initiating industries that can grow and expand while supporting higher wages.
Urbanization and development – The exact choices must be made in urbanization that will ensure the right balance of productivity, competitiveness and sustainability, which will also impact national development, and the sustenance of livelihoods.
Regional development and social inclusion – As Sri Lanka comes face to face with the challenges of structural transformation and urbanization, some sectors of the economy are likely to face a greater pressure than others, which may excessively affect some regions and social groups over others.
The Sri Lanka Economic Forum will set the stage for an in-depth analysis and discussion of the need to develop government policy along these identified areas of importance. The forum is based around these fundamental concepts and will set the stage for many globally recognized thought leaders to share their perspectives on Sri Lanka, while also sharing lessons learnt from other countries and their experiences in measuring development as well.
The event will also address the vision of Hon. Prime Minister Ranil Wickremesinghe under the aegis of President Maithripala Sirisena, towards heralding in inclusive economic prosperity for Sri Lanka by 2023.
In addition to George Soros and Joseph Stiglitz, the panel of distinguished speakers includes Ricardo Hausman, Professor of the Practice of Economic Development, Harvard Kennedy School Director, Centre for International Development, Alan Hirsch, Director, Graduate School for Development Policy and Practice, University of Cape Town, Robert F. Conrad, Associate Professor, Sanford School of Public Policy, Duke University, Christopher Woodruff, Professor of Economics, University of Warwick, Erion Veliaj, Mayor, City of Tirana, Albania, Filipe Campanile, Associate Professor of Public Policy, Harvard Kennedy School, Ljubica Nedelkoska, Growth Lab Research Fellow, Centre for International Development, Montek Singh Aluwalia, Visiting Professor, Stern School of Business, New York University and, Sean Turnell, Associate Professor, Department of Economics, Macquarie University.
Live streaming of the event and further information can be obtained atwww.srilankaeconomicforum.org
TWO. A Sceptical View in CEYLON TODAY … http://www.lankaweb.com/news/items/2016/01/06/just-another-economic-forum/comment-page-1/
The Sri Lanka Economic Forum, the brainchild of Prime Minister Ranil Wickremesinghe opens today (7), and for two days the Prime Minister will discuss ways in which we can ‘Steer Sri Lanka Through Sustainable and Inclusive Development’.
The Prime Minister has also managed to get a number of prominent economists, including George Soros and Joseph E. Stiglitz to take part in the Forum.
The Sri Lankan Economic Forum is being held at a time when President Maithripala Sirisena is gearing up to celebrate his first anniversary in office. While the President took office promising an era of good governance and gentlemanly politics, Wickremesinghe added to the bucket full of promises the dream of a prosperous and vibrant economy.
A year later, an Economic Forum is held to discuss how our economy has really fared. What have we got so far? In the third quarter of 2015, the Department of Census and Statistics recorded a positive growth rate of 4.8 per cent and the Department predicted the growth rate in the first three quarters of 2016 to be 5.2 per cent.
While this seemed positive, the International Monetary Fund (IMF) warned us that we needed to tighten our monetary policy and raise our taxes in order to avoid a bleak economy in 2016.
The bitter truth, which successive governments have been striving to hide from the public, was that Sri Lanka is facing serious economic issues, which is likely to end in a crisis if proper short-term as well as long-term solutions are not found for the burning economic issues. Government revenue has been declining as a percentage of the GDP over the last decade while the exports have been reducing as a percentage of the GDP. These are not healthy economic indicators for a developing country such as Sri Lanka. In addition, Sri Lanka is leading to a Balance of Payment (BoP) crisis as result of the reduction of exports and the large sum of cash outflows resulted due to the rapidly increasing foreign commercial borrowings.
Thus, the Prime Minister’s focus in this Forum has turned to; Macroeconomic and Fiscal Stability; Structural Transformation and Competitiveness, Urbanization and Development and Regional Development and Social Inclusion as well as looking for new avenues to strengthen the external sector through increasing exports.
Why has he added ‘Social Inclusion and Sustainability’ here? Because in simple terms the rich are getting richer and the poor are becoming destitute. The government needs to find ways to get employers pay their workers more while encouraging businesses and a means to distribute wealth evenly across the population. If we do not do this, they are going to have another revolution in their hands and it would not be as peaceful as the ‘8 January revolution’.
As the Prime Minister prepares to start the conversation on the economy in Sri Lanka, he hopes that this would be the foundation for the upcoming World Economic Forum (WEF) to be held in Switzerland on 20 January. The 46th annual meeting of the WEF however is set to discuss the ‘Fourth Industrial Revolution’, which is the revolution in technology.
“Central questions that will be asked of the Fourth Industrial Revolution include: how will it transform industry sectors, including health, mobility, financial services and education? How can technology be deployed in ways that contribute to inclusive growth rather than exacerbate unemployment and income inequality?” stated the WEF.
As the Prime Minister contributes to the discussion at the WEF, we would like to remind him that our computer literacy stood at 25 per cent and that technology advances would not help much if the Treasury cannot get the basics of fiscal management and budgeting right.
However, the government has not been very successful so far. One of the reasons for that is the bag of pledges it gave to win elections continue to act as constraints to develop the economy in the long run. On top of that, the government had not formulated a proper economic vision regarding the development of industries. The economic policy statement delivered by the Premier prior to the budget did not have enough focus on industrial development. Given the economic situation the country faces, the government will have to implement major economic reforms. Such reforms neither will be popular nor will they be easy. Therefore, it is easy to have forums and suggest policies, but what matters is the implementation of such policies. Sadly, that is what Sri Lanka has been lacking over the years. Many economists, who have mastered in various economic subject matters, have come up with many policies to address the economic issues, but most of these remain unimplemented. In that context, the country expects this forum to not be one of those forums that produced unimplemented policies, but to be a forum which would make a breakthrough in economic reforms and implement them for once, so that the public benefits.
THREE. Report on Day One: “Sustainable and inclusive development take center stage at SL Economic Forum,” …. …. http://newsfirst.lk/english/2016/01/sustainable-and-inclusive-development-take-center-stage-at-sl-economic-forum/123916
The Sri Lanka Economic Forum 2016 began in Colombo on Thursday (Jan. 7th) with the aim of formulating a policy for long term economic growth. The forum themed “Steering Sri Lanka towards sustainable and inclusive development” began under the patronage of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe.
The two-dayforum which was graced by business magnate George Soros and Nobel Laureate Economist, Prof Joseph Stieglitz is set to discuss key findings of a preliminary study on Sri Lanka carried out by the Harvard University’s Center for International Development.
Ricardo Hausmann, Director of Harvard’s center for international development noted that low government revenue as well as declining exports and external debt, were some of the key challenges facing Sri Lanka’s economy.
Addressing a packed audience PM Wickremesinghe spoke of his ambition of making Sri Lanka the most competitive in the Indian Ocean region. Identifying the immediate issues face by the country, the Prime Minister noted that it is of utmost importance that Sri Lanka navigates through the vulnerabilities of the global economy as well imbalances in our own fiscal system. He also pointed out a few concerns including the stability of the Chinese economy over the course of the year and the situation in the middle east. He further said that the government has now embarked on delivering wide-scale economic reforms needed to fast track the economy.
Member of European Parliament Niranjan Deva Aditya addressing the gathering noted that Sri Lanka has the potential to reach economic prosperity and rise to the level of Singapore.
****
ALSO SEE http://www.zerohedge.com/news/2016-01-07/george-soros-warns-chinas-currency-contagion-reminds-me-crisis-2008 ….
George Soros: It’s 2008 All Over Again
Submitted by Tyler Durden on 01/07/2016 06:00 -050
Volatility is surging everywhere…
And as Bloomberg reports, Soros is worried...
Global markets are facing a crisis and investors need to be very cautious, billionaire George Soros told an economic forum in Sri Lanka on Thursday. China is struggling to find a new growth model and its currency devaluation is transferring problems to the rest of the world, Soros said in Colombo. A return to positive interest rates is a challenge for the developing world, he said, adding that the current environment has similarities to 2008.
… “China has a major adjustment problem,” Soros said. “I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”
Of course, this is not the message central planners and TV anchors want the mainstream to hear. Every dip is a buying opportunity, and “long-term” is how everyone should invest… no matter that your assets dropped 20% in a week… long-term!!
How about this long-term?
Global markets are facing a crisis and investors need to be very cautious, billionaire George Soros told an economic forum in Sri Lanka on Thursday. China is struggling to find a new growth model and its currency devaluation is transferring problems to the rest of the world, Soros said in Colombo. A return to positive interest rates is a challenge for the developing world, he said, adding that the current environment has similarities to 2008.
Global currency, stock and commodity markets are under fire in the first week of the new year, with a sinking yuan adding to concern about the strength of China’s economy as it shifts away from investment and manufacturing toward consumption and services. Almost $US2.5 trillion was wiped from the value of global equities this year through Wednesday, and losses deepened in Asia on Thursday as a plunge in Chinese equities halted trade for the rest of the day.
“China has a major adjustment problem,” Soros said. “I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”
Soros has warned of a 2008-like catastrophe before. On a panel in Washington in September 2011, he said the Greece-born European debt crunch was “more serious than the crisis of 2008”.
Soros, whose hedge-fund firm gained about 20 per cent a year on average from 1969 to 2011, has a net worth of about $US27.3 billion, according to the Bloomberg Billionaires Index. He began his career in New York City in the 1950s and gained a reputation for his investing prowess in 1992 by netting $US1 billion with a bet that the UK would be forced to devalue the pound.
Measures of volatility are surging. The Chicago Board Options Exchange Volatility Index, known as the fear gauge or the VIX, jumped 21 per cent on Thursday in New York, to lift it 36 per cent so far this year. The Nikkei Stock Average Volatility Index, which measures the cost of protection on Japanese shares, has climbed 43 per cent in 2016 and a Merrill Lynch index of anticipated price swings in Treasury bonds rose 5.7 per cent.
China’s Communist Party has pledged to increase the yuan’s convertibility by 2020 and to gradually dismantle capital controls. Weakness in the world’s second-largest economy remains even after the People’s Bank of China has cut interest rates to record lows and authorities pumped hundreds of billions of dollars into the economy. Data this week reinforced a sluggish manufacturing sector.
At the closing bell in New York on Thursday, the Standard & Poor’s 500 Index was down 2.4 per cent. The index is down 4.9 per cent this year, its worst start in data going back to 1928. The Dow slumped 2.3 per cent, while the Nasdaq lost 3 per cent.
The selling began in China, where stocks plunged 7 per cent after the central bank cut the yuan’s reference rate by the most since August. The rout this year in Europe surpassed 6 per cent, as Germany’s DAX fell below 10,000 for the first time since October. The DAX was down 2.6 per cent at 9953.33 at about 4.15pm in Frankfurt.
Bloomberg….. This story was found at: http://www.theage.com.au/business/markets/george-soros-sees-echoes-of-2008-crisis-20160108-gm1jgb.html
