By Sarah Hettiaratchi, Project Executive - Pathfinder Foundation

Since the change of government early this year, the country’s new leadership has announced a few mega development projects, which when implemented, can catalyse economic transformation. The Pathfinder Foundation (PF) in this article wishes to highlight the links between the high priority mega development projects and the objective of establishing Colombo as an important world class financial centre.

The development of financial centres is of great interest to businessmen and policy-makers around the globe. Not only does it help to develop the basic infrastructure within the area, it also provides significant benefits to a country’s economic growth and prosperity of the people. A well-functioning international financial centre is a vital component of an economic infrastructure needed to not only for effective inter mediation in the domestic economy but also to promote Sri Lanka as a regional/ global financial hub.

The history of State-Owned-Enterprises (SOEs) goes back to British colonial rule. Even after the Independence, ownership and management of commercial enterprises by the state were, justified by the parties identified with socialist ideology. State involvement in businesses increased due to regimes which gained power on a populist agenda. This trend was reinforced by a wave of thinking which advocated insulating developing countries from the vagaries of an international economic system which was dominated by advanced countries and their MNCs. These statist economic policies steadily grew and gathered further momentum in the 1970s when government policy, in the name of socialist or progressive reforms, sought to gain control of the “commanding heights of the economy”. However, Sri Lanka’s production /distribution of goods and provision of certain services, including mass transportation, was rolled back after the election of the J R Jayawardena government in 1977. Successive governments, up until 2005, privatised a considerable number of SOEs. Since then, however, the process has come to a halt. As a result, SOEs still account for a significant share of the economy and their losses and inefficiencies substantially contribute to the retardation of growth and development of the country.

By Sarah Hettiaratchi, Project Executive - Pathfinder Foundation

The new government, elected to govern the country for the next five years, has vowed to implement its flagship Megapolis project which was included in its election manifesto. It was reported that the conceptual plan was initially mooted in 1991 by the then young Sri Lankan Minister of Industries, Science and Technology, Ranil Wickremesinghe, when he made a presentation in the presence of the visiting Japanese Prime Minister, Hon. Toshiki Kaifu. The objective of the presentation was to seek Japanese government assistance to implement this mega project. In spite of this initiative, further development of the concept came to a halt with the change of the government in 1994. Once again, during the 2001-2002 period the same urban development concept was considered for implementation, at least on a phased basis, giving priority to reclamation of the sea near Galle Face and areas adjacent to Colombo 03 to develop an extended city within Colombo. The new government is now ready to embark upon its flagship project as the Western Region Megapolis Project (WRMP) which will help transform the entire Western Province, enveloping the Colombo, Gampaha, and Kalutara districts and positioning Colombo as the best city in the South Asian region.