Created: Wednesday, 21 August 2013
Statement by Ambassador Dr. PalithaKohona
Permanent Representative of Sri Lanka to the United Nations
High-Level Conference on middle-income countries:
“Challenges to Sustainable Development and International Cooperation: the Role of Networks for Prosperity”
San Jose, Costa Rica, from 12 to 14 June 2013
“Integrating middle-income countries into the post-2015 development agenda”
Mr. Chair, Excellencies,
I convey the greetings of the Government of Sri Lanka to you and thank the Government of Costa Rica for hosting this historic conference in San Jose. I also thank UNIDO for inviting me to be a speaker at this important discussion in recognition of Sri Lanka’s experiences as a Middle Income Country (MIC).
In the recent past, many countries have achieved middle income status. However, graduating from Least Developed Country status and being comfortable is not an easy task. Some MIC qualifiers may even be reluctant to graduate due to certain challenges associated with consequential economic issues.
External factors have stunted the progress of certain LDCs. The internal stability of many has been affected due to their high dependency on internationally priced external supplies of essentials such as food and energy. Instability in traditional economic powerhouses, and constraints on aid and soft loans, has further intensified global poverty and hunger, pushing many deeper into poverty. Unemployment and underemployment has intensified, causing civilian protests in the streets in both the North and the South. Even today, at least 80% of the global population lives on less than $10 a day. Over three billion people live on less than $2.50 a day and the number has increased in recent years. More than 80% live in countries where the income disparity is increasing. Meanwhile, only 5% of global income is available to the poorest 40% of world population. The top 20% enjoys over 75% of the global income.***
Against this background, let me outline Sri Lanka’s development experience, as several key elements of our journey to middle-income status would be useful in our analysis, especially to prepare ourselves for the post-2015 period.
Many socio-economic achievements qualified Sri Lanka to be upgraded to middle income status by the International Monetary Fund (IMF) in January 2010. Despite having faced a long drawn terrorist conflict and the devastation caused by the December 2004 Indian Ocean Tsunami, not to mention the global food, energy and financial crises, Sri Lanka has been able to demonstrate three main successes:
(i) Enjoying a per capita income well above the International Development Association (IDA) threshold for a number of years;
(ii) Having the capacity for durable and substantial access to international financial markets; and
(iii) Not facing serious short-term vulnerabilities.
Sri Lanka has also realized many of the MDGs and is on track to bridge the remaining gaps. We have incorporated the MDG key performance indicators into our national budget policies. Moving further along the ladder of development is our goal. To do so sustainably is our commitment.
Engaging the grass root level of society, while actively utilizing participatory development approaches, along with safety net programmes targeting poverty-stricken communities, was a continuous tool used by successive governments. Nourishing the social capital has enabled Sri Lanka to rise to a higher level in the regional and international planes.Currently the government is implementing a proactive policy of encouraging the country’s youth in policy formulation as we prepare for the 2014 Global Youth Forum. The country has recorded a GDP growth rate of 6% to 8.2 % for the last three years despite the global economic downturn and the contraction of our traditional markets. GDP factors indicate a noticeable shift of economic activities away from the urban centers, reflected in a significant drop in rural poverty. The government has also successfully launched the massive task of rebuilding the livelihoods of the people in the former conflict affected areas and those areas have experienced rapid development, particularly in agriculture, fisheries and tourism.Sri Lanka’s tourist intake doubled between 2009 and 2011.
A contributory factor, to Sri Lanka’s success has been our education system, which provides free universal access, from primary to tertiary levels, facilitating our comparatively high level of human development. Sri Lanka’s literacy rates are among the best in the developing world. Recognising the importance of a dynamic education sector to support the growth momentum and meet the changing demands of the economy, a set of new policy initiatives are being developed by the government at present.
Providing universal access to a state-funded and operated healthcare system, Sri Lanka has developed a comprehensive annual health plan in line with the Health Master Plan. Sri Lanka enjoys excellent healthcare indicators. Again, a significant contributor to our progress.
Sri Lanka has launched massive development programmes at macro level, including the construction of infrastructure facilities such as harbours and airports, communication networks, highways and townships, with a view to making the country the regional hub in five sectors; shipping and aviation, energy, commerce and finance and knowledge/ICT. A booming tourism sector is also a key component of our development strategy.
Encouraging small and medium industries using a range of microfinance facilities involving government and private financing institutions and a state-sponsored rapid skills development drive with the aim of employing rural youth and women are other components of the government’s strategy. The government has over the years encouraged the construction of industrial facilities away from urban centers. This has enabled rural folk to access work from their own homes and our cities never became overcrowded, as in many other industrializing countries.
Please permit me to outline some statistics to further demonstrate Sri Lanka’s achievements:
1. Food insecurity is no longer an issue for Sri Lanka and absolute poverty has been reduced to 8.9%. The aim of our Government is to make Sri Lanka a poverty free economy by 2016.
2. 85% of the population has access to potable water. Child and maternal mortality rates have been reduced to the levels of more affluent countries.
3. Consistent with the “education for all” goal of the UN, Sri Lanka has achieved a 98% literacy rate, with a higher rate for girls and women.
4. ICT literacy in the country is following a path of exponential growth with a target of 75% ICT literacy by 2016. Sri Lanka’s Network Readiness Index ranking has improved significantly. Cellular phone penetration stands at over 110%. Many developing countries are relatively advanced in this area, opening up opportunities for skills sharing. The era of simply being outsourcing centres is drawing to an end.
5. 91% of the population is connected to the electricity grid. “Energy for all” will be a reality in Sri Lanka before 2015. Sri Lanka will also rely on renewables for 20% of its energy needs by 2020, contributing to the goal of “Sustainable Energy for All”. Sri Lanka’s carbon footprint remains negligible at 0.6 tons per capita per year.
The progress achieved in the socio-economic indicators highlights the results of our human development initiatives. They illustrate the impact of the use of safety net programmes and caring economic strategies, which protect vulnerable communities from an over reliance on market forces.
We believe that the investments which brought these results were essential to build a healthy, literate, productive and entrepreneurial human resource base. The continued development of a strong local production base - both agricultural (12% of GDP) and industrial (30% of GDP) - is vital, even as our service sector, which currently stands at 58% of GDP, expands rapidly. A future-oriented capacity building and a related human resource development drive is in place, strategically identifying new and emerging global demands. These challenges are further intensified in the context of sustainable development. Our industries have adjusted well to these. For example, eco-friendly, carbon-neutral garment products have served niche markets and expanded access, even as industrialized countries continue to struggle from the global financial downturn. Sri Lankan made garments are marketed under the slogan “Garments without guilt”.
Considering that Sri Lanka is still at lower middle-income status, we have specific economic, social and environmental challenges to advance further. Unexpected weather patterns that trigger droughts and floods could cause damage to our food and energy production capablities. The internationally agreed sustainable consumption and production targets could create more challenges for Sri Lanka as well.
Sri Lanka’s historical development paths have reflected our own policy goal of sustainable development. Our vision for sustainable development promotes social equity to go hand-in-hand with economic progress. The Ministry of Environment developed the Sustainable Human Development Index (SHDI) in 2008 by adding elements such as environmental aspects, including quality of life, carbon emissions, bio capacity, the ecological footprint and poverty into the Human Development Index (HDI). This is now part of the National Sustainable Development Strategy. The National Council of Sustainable Development is chaired by the President of Sri Lanka himself.
The Rio+20 Outcome Document “The Future We Want” and GA Resolution No. 67/203 related to the implementation of Agenda 21, and other UN Conferences on Sustainable Development have also recognized the importance of MICs.
In order to assist the MICs, we need to strengthen inter-agency cooperation and coordination within the UN. The United Nations development system, in particular the funds and programmes, as well as the regional commissions must continue to study and address the specific needs of middle-income countries, especially in the context of the post-2015 UN development agenda. A reconfiguration of the global financial institutions must reflect the changed economic circumstances of the world. South-South Cooperation becomes an important element as we go forward, particularly since MIC countries themselves become aid donors. Relevant experiences and technologies can be shared. The persistent dependency on the North is no longer necessary, especially in view of the ongoing financial and economic challenges. The intensifying the role of MICs themselves must be a key element in the forthcoming Lima Conference.
The ongoing efforts to strengthen the role of the ECOSOC, in the context of sustainable development and the post-2015 UN development agenda, provide many opportunities for MICs for becoming partners in those vital processes, including implementation and follow-up.
I thank you Mr Chairman.