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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2642

Silencing Dooms-day Protagonists, Sri Lanka Earns Steady Confidence of International Investors

Daya Gamage – US National Correspondent Asian Tribune

Washington, D.C. 21, October, ( Since the advent of Mahinda Rajapaksa as the president of the South Asian Nation of Sri Lanka in November 2005, there were protagonists who predicted dooms-day for Sri Lanka, one on the military front, and subsequently on the economic front.

Monitoring the progress and development of this small island-nation off the southern coast of India, Asian Tribune, with confidence can say that the administration of Rajapaksa has break through in the military front partially defeating the ruthless home grown Tamil Tiger terrorism to the utter dismay of domestic and international pessimists, and in the economic front steadily earning the confidence of the international investors.

Sri Lanka’s Governor of the Central Bank is now in Washington to tell that success story of Sri Lanka silencing the dooms-day protagonists, domestic and overseas, who expected a steady downfall under Rajapakse’s watch.

This steady progress was achieved amidst a serious battle, militarily with the Tamil Tiger outfit and diplomatically combating misinterpretations, misinformation and misrepresentation by domestic vested interest and their overseas agents.

Asian Tribune now carries what Sri Lanka’s Central Bank Governor Ajith Nivaad Cabraal said at the Washington Sri Lanka Embassy about the investor confidence his small nation, size of the State of West Virginia, gained during this brief period under President Rajapaksa’s tutelage.

Following a triumphant international road show of meeting with international investors in Singapore, Hong Kong, London, New York, Boston and Los Angeles, which assured $500 million from the international bond market, the Governor is currently in Washington DC, to attend the Annual sessions of the World Bank and the IMF.

In an exclusive interview at the Sri Lanka Embassy in Washington DC, Mr. Cabraal said that the response of the international investor community to Sri Lanka’s economic story was overwhelming. “In fact, the international investors were prepared to commit investments over $1.6 billion,” he said, and highlighted that Sri Lanka’s debut international bond was oversubscribed 3.2 times. Mr. Cabraal said, “It can be termed a huge success.” Sri Lanka accepted $500 million of the offered $1.6 billion. During the course of the road show, Mr. Cabraal and his team had met nearly 50 international investors on one-on-one meetings and at least 30 investors each during four luncheon meetings.

The bond issue was jointly led by JP Morgan, Hong Kong and Shanghai Banking Corporation and Barclays Capital, on behalf of the Sri Lanka government.

What Asian Tribune understand is that there were at least four vital projects being undertaken simultaneously by the Rajapakse administration: the military solution to Tamil Tiger terrorism with an agenda that included protecting the territorial integrity, sovereignty and national security, developing a political solution to the national problem of all communities searching for a better unit of devolution of political and administrative power to the periphery, combating the most difficult overseas public diplomacy campaign to combat misinformation, misrepresentation and mis-projection of the ground situation in Sri Lanka to earn confidence of the major players of the international community, and developing a steady long-term socio-economic program.

Now, this is about the economic program the Governor was elaborating in Washington.

During the initial two days of the breaking news, the impact of this success story on Sri Lanka’s economy has been sensational, marked specially by a significant reduction in interest rates in the Treasury bill and Treasury Bond market and a discernible appreciation of the Sri Lanka rupee against the US dollar. The Treasury Bill interest rate has come down by 22 basis points and the exchange rate has appreciated by about 60 cents during the past two days. The stock market went up by nearly 1% on Wednesday.

The Treasury bill interest savings the government has got has already exceeded the first entirety of the interest payment to be made on the bond issue. Economic analysts in Colombo said, “It is likely that there will be a very favorable impact on the cost of living and economic activity in general.” The confidence of the international investors has also buoyed up the Sri Lanka stock exchange and indices appreciated by nearly 1% in a very brisk day of trading. The mood appears to be one of perceptible international confidence in the resilience of the Sri Lanka economy and a significant commitment toward the massive infrastructure projects in the country.

Mr. Cabraal says that the government’s focus is toward greater expansion of the economy and he predicts that Sri Lanka will be able to achieve a growth target of 7.5% for 2008 and very effectively control the fiscal deficit.

Mr. Cabraal said that the oversubscription of Sri Lanka’s debut bond issue clearly indicates the confidence that experienced international investors have in Sri Lanka and their belief in the country’s ability to spur economic growth to great heights and to maintain the momentum to achieving even greater progress, while maintaining macro economic fundamentals at satisfactory levels.

On many fronts this is a success story of a South Asian nation that has nothing to offer to major powers: no crude oil deposits, for now, no strategic interest for military purposes, no major mineral deposits etc.

But this South Asian nation proved something significant during these two years: the perseverance of the people and their leaders to weather all odds, internal and external, to emerge from the military debacles the previous administrations were mostly responsible, to state the nation’s case to the world with forthrightness and undertaking strong economic decisions to benefit all ethnic communities in the country.

Sri Lanka’s president Rajapakse told Asian Tribune last month in an exclusive interview in Los Angeles, California that his government has understood the economic disadvantages the Sinhalese, Tamils and Muslims faced and that under his watch all these disadvantageous segments will benefit.

According to Foreign Secretary Dr. Palitha Kohona, in the same interview session, the international community is known to only one issue, the Tamil grievances. “In fact, all communities have serious grievances that need to be addressed,” he said.

The Sri Lanka Governor of the Central Bank and his team of economic planners are today in a position to tell the success story in the Washington, the capital of the nation whose foot steps are seen all over this globe. The beneficiaries of this success story are all ethnic communities in the nation that did not have a coherent socio-economic program to redress the poverty-stricken majority that led to many internal insurrections.

- Asian Tribune -

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