Sri Lanka to push up investment levels with stability, low deficits: Treasury secretary

July 07, 2010 (LBO) – Sri Lanka will maintain public investment at around 6 percent of gross domestic product and will attempt to kindle private investment five times that by creating an environment for people to invest, an official said. “Government will invest in areas not very attractive to the private sector,” Treasury secretary P B Jayasundera said.

“Government will focus on the quality of its investments. For each 1.0 percent of (of GDP) the government invests, the private sector could invest five times.”

Jayasundera said the government wanted to national investment to around 30 to 40 percent from the current 20 percent levels to push growth to around 8.0 percent of GDP within three years and ‘double digits thereafter’.

He said government expected foreign investment to double from around 2.0 percent to 4.0 percent of GDP and the ‘domestic private sector to take care of the rest.”

In East Asian government and state enterprise savings and investments are over 20 percent of GDP in some countries.

In Sri Lanka the state dis-saves (runs a deficit on the current account of the budget and borrows for investment and part of current spending), and drags down the national savings ratio. Last year seven state enterpri