Home / Front Page / The Banker mag picks Ravi K as Finance Minister of the Year, Asia-Pacific

The Banker mag picks Ravi K as Finance Minister of the Year, Asia-Pacific


Comments / 2462 Views / Tuesday, 10 January 2017 00:47


Finance Minister Ravi Karunanayake has been selected as the Finance Minister of the Year for Asia-Pacific by the prestigious The Banker magazine for his efforts to steer Sri Lanka into a new era of economic reform and a change of mindset.dft-1-41

The Banker says Karunanayake secured a $ 1.5 billion International Monetary Fund (IMF) loan program that the country needed to avoid a balance of payments crisis, replenish reserves and rebuild confidence among international investors.

“We were not desperate to go to the IMF. But [to others], securing an IMF loan [is a mark of] financial discipline, so our prime objective was achieved. We wanted to show that it is best to have abundance of prudence,” says Karunanayake.

Sri Lanka’s latest bond issues in the international capital markets suggest Karunanayake has indeed reached his objective. In 2015, the sovereign issued a $ 1.5 billion dual-tranche note – its largest since 2007. A year later, it printed a second bond of the same size, with order books of $ 6.6 billion, despite market volatility after the UK voted to leave the EU.

In line with the IMF program, Sri Lanka is also working towards fiscal consolidation. Sri Lanka’s budget deficit has dropped from 7% when Karunanayake took office in January 2015 to 5.6% in 2016 – just below expectations.

After a visit in September 2016, the IMF said Sri Lanka’s tightening of fiscal and monetary policies has been effective and that it met the IMF program’s targets through to the end of June 2016.

Meanwhile, Sri Lanka’s total government revenue grew from Rs. 1,195 billion ($ 8 billion) in 2014 to Rs. 1,455 billion in 2015. Tax revenue rose from Rs. 1,050 billion to Rs. 1,356 billion in the same period. This is crucial for Sri Lanka, which has a very low tax revenue-to-gross domestic product ratio.

To raise tax revenue further, Parliament has passed a bill to increase value-added tax from 11% to 15%. Karunanayake is also keen to continue simplifying the tax system as well as change people’s mindset towards taxes.

“We have inculcated in the minds of the people that paying taxes is not something bad, but a must for the country. Every person needs to pay a reasonable charge instead of relying on the Government for everything,” he says. As a result, Sri Lanka’s tax records have grown from having 700,000 files in January 2015 to having 1.4 million today. (Colombo Gazette)

 


Share This Article


COMMENTS

Today's Columnists

Too clever by three quarters on bonds

24 January 2017

‘Monk’s petition on eve of bond debate in House’ was the caption of a front page story in the Sunday Times of 22 January. The UNP has sent their emissary to Hulftsdorp together with footnotes. There is a palpable air of duplicity...


Steamrolling of Central Bank by Minister of Finance: An unsavoury development?

23 January 2017

An unsavoury rift between the Central Bank and Minister of Finance A growing rift between Finance Minister Ravi Karunanayake and the senior management of the Central Bank is surfacing now, worrying both financial markets and prospective fo...


Sustainability: How that translates to agriculture

23 January 2017

Once cultivated, traditional paddy that is grown organically will establish its own markets based on the consumer demand   For the longest time the word “sustainable agriculture” was a catch phrase only. I...


Yahapalanaya lapses – Is Mahinda the option for Muslims?

21 January 2017

Former Minister, Speaker and Premadasa/Rajapaksa loyalist and National List nominee Parliamentarian A.H.M. Azwer along with a few other Muslim Mahinda diehards claim that Yahapalanaya under President Maithripala Sirisena and Prime Minister Ranil W...


Columnists More