Opposition Leader MP Mahinda Rajapaksa assuming duties at the Opposition Leader’s office in Parliament yesterday. Speaking at the occasion, MP Rajapaksa said he had “no plans to stay long in the Opposition Leader’s Office”.
- Says Govt. will have to adopt dynamic economic policies to achieve growth and meet debt repayments
By Nuwan Senarathna
Sri Lanka Podujana Peramuna (SLPP) yesterday called on the Government to adopt a multi-pronged approach for developing the economy by promoting investment, import substitution, and reducing losses of State Owned Enterprises (SOEs) to reign in public expenditure.
Focusing on the economic challenges before Sri Lanka, including moderate growth and high debt repayments in 2019, United People’s Freedom Alliance (UPFA) MPs Lakshman Yapa Abeywardena and Anura Priyadarshana Yapa called on the Government to maintain fiscal prudence when allocating funds.
In 2017, losses among 55 of the largest SOE amounted to Rs. 87 billion, according to the Finance Ministry. Think thank Advocata in its report on SOEs released in 2016 estimated that loss-making SOEs cost the taxpayer a colossal Rs. 636 billion between 2006 and 2015. The Government has outlined plans to target a 3.5% Budget deficit in 2019, with the document expected to be presented to Parliament on 5 March.
“Sri Lanka is going through a very tricky situation, especially since the Government failed to follow coherent policies after 2015. We all know they failed to govern the country well and regulate the economy to promote growth. Therefore we need a dynamic approach to tackle these issues,” MP Lakshman Yapa Abeywardena told reporters at SLPP headquarters.
He said policies should be implemented to improve the efficiency of SOEs and avoid unnecessary expenses in those institutes, usually triggered by corruption and mismanagement. Abeywardena pointed out that certain SOEs had been earning profits by improving productivity and efficiency.
Abeywardena noted the lack of policy consistency of the Government has caused the current economic situation of low growth. He pointed out the Government had failed to attract Foreign Direct Investments (FDI) during the last four years and promote industries.
Abeywardena also said tax policies introduced by the Government had hampered the public and failed to reach their goals. Higher tax rates have created unnecessary pressure on the business community, and pushed up the cost of living, according to him.
“The Government has imposed taxes on goods and services which are essential for the public, but compared to that, the income of the public has not gone up, therefore people have to face a difficult situation,” he added.
Lack of export diversification has been one of the biggest reason for exports growing at a modest pace and that has led to the depreciation of the rupee, he argued. He charged the Government has failed to implement policies to promote exports during the last four years.
“In a situation like this, the rupee will inevitably fall because there is excess demand for dollars than what the economy can support,” he added.
Abeywardena also raised concerns over debt repayments this year. He noted that if the Government failed to follow sustainable approaches, the country may be caught in a debt trap.
“Governor of Central Bank of Sri Lanka Dr. Indrajith Coomaraswamy had recently explained the current economic position of the country, and he had explained that amount of debt repayment we have to do to meet this year’s debt repayment. Therefore the Government should spend money wisely.”