Jayasundera in late 2006 and early 2007, to jointly decide on this all important priority. Based on such discussions, we decided that we would take the necessary initiatives to improve investor confidence so as to ensure the continuous investment via the Government and the local private sector, whilst specifically targeting new foreign investment. Accordingly, many initiatives were implemented, and over a comparatively short period of time, such efforts started showing results, and the country started to record a steady inflow of foreign investment through major government projects, investments in Treasury Bills and Bonds, and investments in international sovereign bonds. This regular flow of investments enabled the economy to record sustained high growth, even whilst the conflict was raging. As a consequence, Sri Lanka recorded an average growth of 6.7% through 2006 to 2012, which was one of the most difficult periods in our history. In fact, the growth levels of 2006: 7.7%, 2007: 6.8%, 2008: 6%, 2009: 3.5%, 2010: 8%, 2011: 8.2%, and 2012: 6.4%, were the highest ever in any seven year period in our history! That meant that our joint strategy had paid off, with sustained growth being recorded. With such sustained growth and with the pipeline of continuous investments, the economy was gradually transformed to a more stable level, and with that, all other key factors in the vicious cycle also began to change for the better. Initially, certain critics did not believe that we would be able to escape from the vicious cycle that had trapped the country for decades.
To do so, let us initially examine a snap shot of our economy in 2005. Growth in 2005 was 6.2%, with the average growth for the 7 years, 1999 to 2005, being 4.3%; Foreign reserves were around $ 2.7 billion, or about the equivalent of 2 ½ months imports; The country was at the mercy of a ruthless terrorist group and on the brink of war; Unemployment was at 7.2%; Poverty was at a level over 15%; Inflation was on a sharp rising trend; The banking system was vulnerable and displaying several worrisome cracks; Public debt to GDP level exceeded 90%; Per capita income was under $ GDP was around $ billion; The Western Province share of GDP was an overwhelming 51%; Infrastructure development was almost non-existent; The fiscal deficit was over 7% although very little infrastructure development work had been carried out. All in all, a rather bleak picture, and worse still, a bleak outlook.