our economy. sixth, sri lanka must continuously improve its global rankings. as is well known, our country had been lagging behind in the world scene on many fronts, mainly as a result of our focus for nearly 30 years, being on just keeping body and soul together in the face of the deadly terrorist threats. as a result, up until a few years ago, our global rankings were quite dismal and low. of course, our rankings were somewhat high on health and education and very high on cricket! but unfortunately on many business related indices, we were lagging far behind many countries, and our scores in doing business, economic freedom, global competiveness, etc. were certainly not flattering. however, about 2 years ago, we started an initiative to carefully examine the criteria that is used to rank countries in relation to various indices, and taking the necessary steps to improve in each of these areas, and prove to the world that we really mean business! i believe if our efforts continue to prove successful over the next few years, and sri lanka materially improves its global rankings on many business indices, we would stand out as an economy with great promise and potential. that would also help us to be well positioned to truly gain recognition as a global hub. in this connection, let me relate a little story that may indicate sri lanka ’ s growing promise and potential. a few days ago, a high ranking official of one of a major multinationals met with me, and he told me that they are becoming increasingly frustrated by the very high costs that they have to bear in the top asian capitals of tokyo, beijing, singapore, hong kong, jakarta, manila and kuala lampur, which is making it increasingly expensive for them to do business in those cities. according to this official, their head office is therefore actively searching for alternate cities in asia with good quality infrastructure, high standards of law and order, efficient communication, convenient sea and air connectivity and excellent living conditions, in order to consider re - location of some of their regional offices. in that regard, he said to me that within the next few years, if sri lanka is able to display a high degree of improvement in each of these areas of interest to multinationals like them, sri lanka could very well be a strong candidate for consideration by such global giants, to locate their regional offices. in this conversation, what struck me first was that such a conversation would bis central bankers ’ speeches never have been even remotely possible,

countries, the efforts to mop up the post - crisis carnage have centred around the question of debt. high levels of household and corporate debt in some euro - area countries are continuing to stifle overall economic activity, particularly investment. but private indebtedness is not the only topic on the agenda – public debt also needs to be addressed. a string of euroarea countries have made huge progress in scaling back their fiscal deficits since the onset of the sovereign debt crisis – indeed, greece, ireland and others deserve plaudits for paring back their annual deficits by ten percentage points or more. but more often than not, countries are still crashing through the 3 % deficit ceiling. and if we factor cyclical gains and temporary measures out of the deficit numbers, then the structural deficits, as they are known, have been static at best or even going back up. essentially, the opportunity opened up by the low interest rates to bring down structural deficits particularly quickly was squandered. in the key area of labour market reforms, countries like italy, spain and france have made tangible progress in the right direction since the crisis struck. but employment could be boosted further still if france and spain, say, act even more decisively to address the divide splitting their labour markets into temporary and permanent employment contracts. the goods markets are another area where key decisions unleashing the forces of growth can be made. for instance, some european countries have rules which inhibit the growth of small enterprises. but when highly innovative small businesses are prevented from scaling new heights, this stunts economic growth. another case in point is the red tape involved in setting up a business, which is a major hurdle across much of europe and, i might add, especially so in germany. the world bank ’ s doing business report ranks our country 107th for red tape, alongside antigua and barbuda and behind nepal and ghana. so we ’ re not “ best practitioners ” in this respect, not by any stretch of the imagination. and there are other areas where germany would be unwise to rest on its laurels. potential growth is just a meagre 1. 3 %, and globalisation and the “ energy u - turn ” are exposing the economy to mounting competitive and cost pressures. more importantly, german society is feeling the effects of radical demographic change, which will take its toll on the country ’ s growth prospects. over time, the working - age population will diminish and the number