cent to 18 per cent between the two reference periods and that in the industry remained unchanged at 20 per cent. this has to be seen as both a weakness and an opportunity. we know that food prices have recorded an unprecedented increase in recent times. hence, there are immense opportunities arising from increased prices and resultant increase in production. at the same time, food security has to be ensured in order to avoid adverse consequences of increased food prices and also undue declines in stocks. given these limitations, the obvious strategy is to increase productivity. accordingly, attempts need to be made to concentrate on land, water, agricultural methods, seeds, harvesting, credit to agriculture, transport, harvesting storage, stable prices, value addition etc. to raise productivity in agriculture. if the growth is constrained by limited expansion in agriculture, can ’ t we focus more on the industry sector? of course, we can. unlike the agriculture, which is constrained with limited land availability, industry does not have capacity or demand limitations. even the nonavailability of raw materials or essential inputs or the domestic demand for the output no longer does inhibit industrial growth in view of globalization of trade and services and the advancements in information and communication technology. although the importance of the agriculture sector in sri lanka is reducing, the share of industry has been improving. by end 2007, the share of industry remained at around 30 per cent of gdp compared to 20 per cent in 1950. however, there are still risks and weaknesses in industry sector as well. the higher reliance of imported raw material, increased cost of economic infrastructure, higher wages per unit of output, overall increase in cost structure, intense global competition and possible abolition of various concessions certainly tells us there is an urgent need to improve productivity in the industry sector as well. the demand for the country's industrial goods will always depend on its comparative and competitive advantages. this requires local industries to raise productivity and efficiency in production so as to successfully compete with the rival producers in other parts of the world. since sri lanka does not have an unlimited natural resource base it would be difficult to enhance growth through industry or agriculture alone. as mentioned above, services sector is important for both industry and agriculture sector performance. hence, we need to focus more on services sector. however, the focus should be placed on a “ more productive ” services sector. although we always stress the importance of improving productivity in agriculture and industry sectors, a similar significance should be assigned to the services sector as well. despite the growing weight in

because you don ’ t want to miss the party. your children are in the back seat, giddy with excitement about seeing their grandmother. so you decide to go a little faster. you accelerate. after some time passes, you still think you are some distance from your exit. the children are now fidgeting in the back seat, and you don ’ t want to be late, so you decide to step on the gas a little more. now, you are speeding, hoping to get to your destination sooner. eventually, though, as you are flying down the highway, you finally catch a glimpse of the exit through the fog and rain, only now you are going too fast to safely navigate the off ramp. you are faced with two very unattractive options. one option is to slam on the brakes to make the exit. this strategy risks causing a multicar accident, as your abrupt efforts to slow down surprises drivers behind you who had expected you to continue at high speed. the result is an accident, perhaps injuries to innocent people, and maybe a severe traffic jam, diverting or delaying many others. the second option is to continue down the road to the next exit, turn around, and then backtrack to the right exit. this strategy means that you are late, you miss the party, you disappoint everyone, you pay extra for tolls and gas, and you incur numerous other costs in the process. monetary policy is sometimes criticized for such “ go - stop ” policies. policymakers step on the accelerator aggressively, only to slam on the brakes in order to change course. such an bis central bankers ’ speeches approach to policy can be highly destabilizing, creating added volatility for financial markets and the economy. i would add that constant acceleration only makes these risks even more hazardous. slamming on the brakes or abruptly changing course could disrupt the economy. failing to slow down and exit at the right time risks excessive inflation, which then has to be controlled. it also risks the misallocation of resources and capital, and perhaps even credit bubbles or other distortions that could pose problems for the economy. thus, in my mind, such an accelerationist approach to monetary policy is risky and the potential costs may be quite high. it is an approach most often driven by an excessive focus on the short run and perhaps some hubris that we will be able to successfully avert the risks such a strategy poses for the economy over the longer run.