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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2343

Sri Lanka faces a daunting task in the midst of a global financial crisis - Dr. Palitha T.B. Kohona

Colombo, 01 12 (Asiantribune.com): Despite the undoubted uncertainty in the financial sector, Sri Lankla Government is committed to pursuing its policy goals of achieving economic and social progress, with special emphasis on bridging regional disparities through rural livelihood and infrastructure development. Rural development remains a priority for the government. The major infrastructure development projects which are already underway, are clearly demonstrative of this commitment to ensure that the fruits of prosperity are shared equitably. The Budget proposals of 2009 that were recently submitted to Parliament, are ample evidence of this policy approach of the government, emphasized Dr. Palitha T.B. Kohona.

In his keynote address recently at the Annual Report Awards presentation ceremony at the Institute of Chartered Accountants of Sri Lanka, Dr. Palitha T.B. Kohona, Secretary to the Ministry of Foreign Affairs further said.

The investment of large amounts of resources by successive governments of Sri Lanka since independence on social infrastructure projects, to improve the health, education and agricultural sectors, has borne fruit.

The problems of many developing countries, widespread poverty, illiteracy and absolute deprivation, are no longer a challenge to us. Sri Lanka is now categorized as a middle-income country and is well on the way to achieving, or even surpassing, the millennium development goals. Today, Sri Lanka stands proud among its South Asian neighbours in terms of socio-economic achievements and maintains high social development indicators on par with the developed world.

Given below the full text of the address made by Dr. Palitha T.B. Kohona, Secretary to the Ministry of Foreign Affairs recently at the Annual Report Awards presentation ceremony at the Institute of Chartered Accountants of Sri Lanka:

The Role of Professionals in the Reconstruction Process

Ladies and Gentlemen,

Thank you for inviting me to the Annual Report Awards of the Institute of Chartered Accountants of Sri Lanka. It gives me great pleasure to be in the presence of such an illustrious audience tonight. I wish to congratulate the winners who were selected through a rigorous process.

This event seeks to recognize and reward the excellence demonstrated by organizations in adhering to the principles of transparency, social accountability and good governance as well as for complying with the legal requirements of financial reporting. The success of any organization depends to a large extent on its organizational structure and the dedication, enthusiasm, and integrity of its members. There is no doubt that the Institute of Chartered Accountants of Sri Lanka owes its acclaimed success to a combination of these factors.

We in Sri Lanka have a proud claim to possess a sound system of laws, regulations and guidelines, providing for proper financial regulation and management, in both the private and public sectors. We inherited this from our colonial masters. We may even have refined it in the ensuing years, guided by a vigilant judiciary. However, the effective implementation of this framework depends to a great extent on the integrity, dedication, timeliness and efficiency of the professionals engaged in financial management, accountancy and auditing. The continued effectiveness of this structure as the country emerges from its current challenges, will also depend on professionals like you.

The ICASL was established in 1959, pursuant to the recommendations of L.M.D. Silva Commission on Company Law in 1950, in an era that was relatively unaffected by globalization and the open economic system introduced several decades later. Since then, the ICASL has emerged not just as a stakeholder but a leader in Sri Lanka’s economy in its efforts to create a healthy and competitive business environment.

The Chartered Accountants Annual Reports Awards, a competition that is held annually with the aim of encouraging organizations to comply with criteria such as accounting standards, legal requirements, governance, timeliness and corporate social responsibility, in presenting information in the annual financial reports, is a situation where ICASL has displayed and continues to display its leadership.

Today, the world is in the midst of a global financial crisis, a crisis that originated in the main financial centres of the world, which is threatening to drag entire economies of the industrial as well as the developing world to recession. Some of the problems faced by multinational giants may have been caused by deficiencies, in particular, in monitoring and control, in the accounting processes. The intricate and inter-connected nature of the economies of countries threatens not just their own economies, but the very existence of millions of people in terms of the loss of jobs and their means of livelihood, nullifying the hard-won achievements in terms of human and social development. The impact of the financial crisis will impact on countries like us at some point or other and we need to be prepared for this eventuality. Your profession bears a key responsibility in anticipating and advising your clients in this regard.

In the midst of the global financial turmoil, Sri Lanka is experiencing one of the most daunting challenges in its history. Despite the undoubted uncertainty in the financial sector, the government is committed to pursuing its policy goals of achieving economic and social progress, with special emphasis on bridging regional disparities through rural livelihood and infrastructure development. Rural development remains a priority for the government. The major infrastructure development projects which are already underway, are clearly demonstrative of this commitment to ensure that the fruits of prosperity are shared equitably. The Budget proposals of 2009 that were recently submitted to Parliament, are ample evidence of this policy approach of the government.

The investment of large amounts of resources by successive governments of Sri Lanka since independence on social infrastructure projects, to improve the health, education and agricultural sectors, has borne fruit. The problems of many developing countries, widespread poverty, illiteracy and absolute deprivation, are no longer a challenge to us. Sri Lanka is now categorized as a middle-income country and is well on the way to achieving, or even surpassing, the millennium development goals. Today, Sri Lanka stands proud among its South Asian neighbours in terms of socio-economic achievements and maintains high social development indicators on par with the developed world.

According to the Global Gender Gap Report 2008 published by the World Economic Forum, Sri Lanka ranks 12th in the world in terms of closing the gender gap between men and women based on four criteria, namely economic participation and opportunity, educational attainment, political empowerment and health and survival. While this ranking gives us a justifiable sense of pride, I also note that many accounting professionals are women. I only hope that more women would also begin to get elected to Parliament.

The Negenahira Navodaya is in full swing to rehabilitate and develop the Eastern Province, which was until recently, under the clutches of the LTTE. Vast sums and other resources have been allocated for this purpose. The Government is already planning the development of the Northern Province along similar lines following the elimination of terrorism and the restoration of democracy. The upsurge of development activities in Sri Lanka has increased the demand for human resources in all spheres, particularly for highly skilled professionals and experts. This demand is expected to grow during the next decade.

It is in this context that the vital role played by professionals and professional associations, like the ICASL, should be appreciated for the enormous contribution that they have made and continue to make towards economic and social stability and development in Sri Lanka.

While you ensure that private companies and government institutions maintain financial discipline and accountability, the Government has the unenviable task of ensuring financial stability for the entire country, and continue with the development process, while at the same time, confronting the most ruthless terrorist organization in the world in order to maintain territorial integrity and consolidate democracy. It has not been an easy challenge, but in my view, the Government of President Rajapaksa has maintained its resolve and commitment, despite the pressures being exerted from different directions.

Sri Lanka has not been affected to the same extent as many Western countries by the global financial crisis. Not yet. Perhaps, it is the result of good financial management or a dash of good luck. While the markets are drying-out, and austerity is becoming a virtue again, we still need to ensure that our exports continue to enjoy the type of success that they have become used to in recent years. The Government will make every effort to ensure that our exports are assisted, consistent with our international obligations and international interests. Exporters will continue to be encouraged, and employment levels maintained, particularly given our acclaimed success in keeping rural women gainfully employed in export-oriented industries. Thousands have been able to stay in their home towns and seek employment locally due to the proactive policy of locating industries away from big towns. I also note that State intervention in the economy is respectable again, even among those who took such joy in deriding the State in the heady 90s when the market place was given unbridled freedom. In this context, I must say that while the Government has categorically stated that it will not submit itself to an investigation by the European Commission in the context of the extension of the GSP + concessions, it will continue to engage with the Commission with a view to establishing that Sri Lanka has more than adequately complied with its obligations under the Rights of Children Convention, the Torture Convention and the International Covenant on Civil and Political Rights. It has been clearly stated in every UN report that Sri Lanka is blessed with a caring governmental structure, which ensures that this country enjoys one of the lowest child and maternal mortality rates in the world, one of the highest school enrolment rates, one of the highest literacy rates and one of the highest access-to-healthcare rates in the developing world. In some areas, we stand shoulder-to-shoulder with the developed world. I am at times bemused by those who point fingers at us. Their recent history does not justify this holier-than-thou attitude. No country is perfect. But what we have achieved since independence is impressive and we will seek to reach a much higher goal.

Our record would have been much better if not for the threat of violence and terrorism consistently foisted on us by the LTTE over the last twenty-five years. Our tourism industry would have flourished and inward investment levels would have been much more impressive. Our prosperity level would have been much higher. The Government will continue to deploy its military to counter the terrorist threat as long as the LTTE does not lay down its weapons, renounce violence and terrorism and return to the democratic fold. The age when terrorism could have been justified to attain political goals has long been condemned to history by humanity. No goal, however sacred, justifies the massacre of children, women and non-combatants.

For its part, the Government has set in motion, a process which will result in the extension and consolidation of democracy to all parts of the country. Within a few months of regaining the Eastern Province from the LTTE, the Government conducted elections, and now, the Eastern Province is governed by its own freely-elected representatives. We are confident that with the passage of time, the process of electing representatives will be further consolidated, not only in the East, but elsewhere as well. The political evolution that is taking place will in the fruition of time, address the concerns of our minorities. The Government has also allocated over Rs. 1.8 billion for the revival of the Eastern Province. The private sector is being actively encouraged to participate in the rebuilding process through extensive tax concessions and other incentives, thereby generating private employment opportunities in agriculture, fisheries, tourism and other sectors. The Eastern Province will offer rich rewards to those willing to establish there. The political solution will emerge from this consolidation of democracy, better representation, economic and social advancement and greater tolerance.

Undoubtedly, while the military operations continue in the North, some people will be displaced. Human beings tend to move away from exploding ordinance. That is natural. They also tend to go back quickly as they did in the Eastern Province – within a space of 12 months. However, the Government has made a firm commitment to care for all the displaced. This is nothing unusual, given that for over 25 years the Government in Colombo has had experience in caring for the people who were under LTTE domination. Despite screaming headlines to the contrary, it was the Government that provided a substantial proportion of the food, health care and educational needs of the unfortunate people who were being dominated by the LTTE. As the military operations reach a final conclusion, the Government will continue to allocate resources for the care of the displaced. In this context, we are most appreciative of the 80,000 family packs provided by India for distribution among the IDPs. It also must be remembered that while a substantial amount of the relief is being distributed by the Government Agents, Divisional Secretaries and over 500 volunteers engaged by them, observers from the ICRC, WHO, WFP and OCHA have access to monitor such distribution. There is no hint at all that there are shortages of any sort in the small area that is still controlled by the LTTE which have been reported by the United Nations or any other observer. We believe that, if the LTTE relaxed its grip, many of the IDPs still remaining in the Wanni, will stream-out to Government-controlled areas. Despite the histrionic headlines, it is estimated that the number being displaced by the current conflict is probably in the region of 100,000. The UN itself estimates that only around 70 percent of the Kilinochchi District is displaced. However, 80 percent of the rice fields of Kilinochchi and Mannar have been cultivated in the current season and the season is proving to be quite successful.

This is an agricultural area and the people themselves will produce much of their needs. The Government will continue to send adequate supplies and to provide shelter for these IDPs, including the traditional material that is used all over Sri Lanka, which is cadjan.

Ladies and Gentlemen,

I am confident that in the face of all these challenges you will ensure that your clients will be able to face up to the uncertainties thrown up by a rapidly changing world.

I thank you for the opportunity to address you tonight.

- ASian Tribune -

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