Corruption costs Sri Lanka 2% economic growth: senior economist

August 11, 2007 (LBO) – Public sector corruption in Sri Lanka is a key factor driving poverty and the country is losing two percentage points of economic growth a year from resources lost to sleaze, a senior economist said. He said another key cause of poverty was inflation, which affected the poor most because their money income did not keep pace with inflation. “We always talk about the loss in growth due to the terrorist war, but we hardly talk of the loss due to this other terrorism – corruption,” President of the Sri Lanka Economics Association (SLEA) A D V de S Indraratna said in a hard hitting delivery, opening the annual sessions of the group.

“Corruption can impact poverty if it affects either the available investible resources or productivity.”

Indraratna was speaking at the annual sessions of the SLEA. Indraratna said large volumes of revenue are forgone due to corruption. Sri Lanka’s auditor general has already uncovered a 3.2 billion rupee value added tax fraud.

The head of the parliament’s Committee on Public Enterprises (COPE) had said that 100 billion rupees were lost in 26 public enterprises due to corruption.

Indraratna says when the losses due to identified corruption elsewhere is ad