Triple E class budget now needs to sail

In shipping terms Triple E (EEE) stands for economies of scale, energy-efficient and environmentally improved vessels that was developed to cater to the market/industry demands.

In my analysis of the 2019 budget proposals, I feel the overall budget of Minister Mangala Samaraweera presented to the Parliament is balanced, given the domestic and external issues/pressures on managing an economy and it goes beyond the tradition. It also announces continuation of policy that were announced for 2018. 

The triple E, I see in this budget is that it has taken initiatives to support the Export industry, Entrepreneurship and Empowerment rather than offering handouts to the people which was the tradition in many post-independent Sri Lanka budgets. 

 

The first E: Exports

The export industry has been given greater emphasis and promised reforms in many areas; it is vital that as proposed the Customs Act is amended as it does bring in many issues time to time which does hamper the smooth sailing of the exports industry, investment climate and the supply chain. As proposed if the full reforms cannot be done in one go, a step by step approach is a welcome model provided it is executed fast as it is already four years delayed. The National Exports Strategy which has been now formulated needs to gather momentum if we are to achieve set targets of exports. The active role of the finance ministry is now vital to see through all reforms announced at the budget 2019 to accelerate export led growth.

 

The second E: Entrepreneurship

The entrepreneurship culture cannot be cultivated with talent alone; the credit schemes for ideas, innovation, further education and R & D, is a very timely proposal. Giving a hand to entrepreneurs and less privileged who find that access to credit in Sri Lanka a serious problem is noble gesture and will help the growth of SMEs which is back born of a strong economy. Many of our young generation school leavers coming out of schools without the ability to enter the limited slots of universities fall apart and become a burden to the system. This proposal gives the ability to self-start businesses and expand on education through the Rs. 1.1 million loan scheme proposed which I thought was an excellent idea as we are all aware that many are helpless and are financially weak especially among the rural population that cannot to come up in life without proper credit for education or startups. 

 

Third E: Empowerment

The proposed housing loans for young married couples, middle east workers are a major empowerment of the society to give them dignity and sense of pride and recognition of their problems. Poverty is not only the Government’s problem; all able citizens and businesses must work towards this goal of reducing poverty and improving the lifestyle of the citizens of this country which will help the economy to take a new turn beyond the $ 4,000 middle income trap stagnation. In this regard, I must also commend the courageous statement made by the finance minister on the sanitation and allocating Rs. 4 billion to help build and support the infrastructure. The fact about the current status of sanitation of the country disclosed by the minister is not only shocking but as a nation we should be sad and disgraced. This proposed scheme will help families as well as industries such as tourism. 

All good but a word of caution: Whilst congratulating the finance minister and ministry for the proposal of a rational budget beyond a populist budget for 2019, I have two observations to make; firstly it is time that we sail with the reforms or walk the talk faster than ever before as in the past many governments including the current have announced progressive steps but have failed to implement. It will be a measurement and a confidence builder if within one month of passing the budget 2019 actions can been seen on the ground by implementing the proposals.

Secondly, I would like to caution with the following quote: “The annual costs of international corruption amount to a staggering $ 3.6 trillion in the form of bribes and stolen money,” United Nations Secretary-General António Guterres said on International Anti-Corruption Day, 9 December.

Corruption can take many forms: Bribery, embezzlement, money laundering, tax evasion and cronyism, to name a few. Whatever its shape, corruption always comes at someone’s expense, and it often leads to weaker institutions, less prosperity, denial of basic services, less employment and more environmental disasters.”

If Sri Lanka need to be an enriched country, Government must ensure speed of reforms and eliminate waste and corruption; otherwise the Triple E type vessel might not sail!

(The writer is the CEO of the Shippers’ Academy Colombo, a graduate in economics, currently the Chairman of the Logistics Advisory Committee of the Export Development Board – National Export Strategy Project).