Govt. focused on reviving investor confidence, developing capital markets

 Newly-appointed State Minister for Finance, Capital Markets, and State Enterprise Reforms Ajith Nivard Cabraal assuming duties yesterday at the Finance Ministry premises. Treasury Secretary S.R. Attygalle is also pictured – Pic by Upul Abayasekara

• State Minister Cabraal says Govt. ready to tackle economic recovery 
• Says range of reforms needed, including expanding capital markets

By Asiri Fernando

The Government is keen to revive investor confidence and improve the ease of doing business as the Finance Ministry maps a path to economic recovery and debt management, State Minister of Finance, Capital Markets and State Enterprises Reform Ajith Nivard Cabraal said yesterday.

“The public has given a great mandate to President Gotabaya Rajapaksa and PM Mahinda Rajapaksa and we thank them for it. The public has provided the political stability needed to create economic recovery and growth. We all know the importance of political stability to this end,” he said.

Cabraal made the comments after he assumed duties at the Finance Ministry last morning. The former Central Bank Governor pointed out the landslide victory by the SLPP was a strong indication of political stability, which should revive confidence of investors and the business community. Cabraal opined that improving the business climate was vital for economic recovery.

“I have been entrusted with the Finance Ministry at a time the country is facing significant challenges. I stand ready to take on the challenge,” he said.

Cabraal pointed out that progress made by all ministries would be measured by an outcome-based management system and that all ministries had a ‘to do’ list in the form of the President’s manifesto which needs to be enacted. “The President’s vision is a people-centric economy; as we rebuild the nation’s economy, we will also focus on the well-being of the people,” he added. 

“We as the Finance Ministry have been given a list of outcomes to achieve and we will work towards it. The days of giving excuses are over,” Cabraal said.

The State Minister added that the planned economic rejuvenation needs to have an impact on all districts and that per-capita income should be increased while inflation and unemployment must be reduced. He stressed that Sri Lanka needed work with the world at large in navigating around the challenges posed by the COVID-19 pandemic. 

“We need to bring financial stability, we need to stabilise the rupee, reduce the budget deficit and keep interest rates at a competitive level. We need to do all this while supporting local entrepreneurs and SMEs. Investors have to be encouraged. All of this needs to be done in parallel, even though some of them will have an impact on the other. However, that is the challenge we face today and that’s the challenge we have taken up,” Cabraal stressed.

The Finance Ministry has been tasked with strengthening financial inclusion and has planned to rebuild confidence in the local banks and financial institutions, he said.

“I think there are five or six financial institutions that have collapsed or are in a weakened state; we can’t rebuild the economy with financial institutions in a weak state, we will remedy this situation,” Cabraal opined. The Finance Ministry is also planning a range of measure to protect local entrepreneurs and industries.

The Government will also focus on developing capital markets and bring in necessary polices to allow capital to flow in. Cabraal stated that the Ministry was keen to expand the Government securities markets, pointing out that in by the end of 2017, the Government bonds market had an investment of $ 3,400 million, which had declined to $ 200 million at present.

“We see this situation as an opportunity, not a weakness to improve the investment in our bond market,” he argued.  The Finance Ministry will also support the move towards to build high-tech products in Sri Lanka, as per the manifesto of the President.