Friday Apr 26, 2024
Friday Apr 26, 2024
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President Ranil Wickremesinghe
President Ranil Wickremesinghe yesterday said work is in progress to modernise and strengthen the economy whilst bringing stability in the short-term and proposed a series of broader goals and policy transformations.
In his policy statement after the ceremonial opening of the third session of the ninth Parliament, Wickremesinghe provided the nation a quick analysis of why the economy collapsed and what efforts are underway to rebuild it.
He told Parliament that presently, the immediate requirement is fuel. While appreciating the international assistance in addressing the fuel shortage, it is timely that we now initiate a system for such importation from our own export income and foreign remittances.
We also have to limit selected imports in order to balance the payments for fuel. On the other hand, fuel supply has to be curtailed. These hardships would need to be borne until the end of this year.
“Due to the economic crisis, we are facing various difficulties. I look forward to the support of the nation to rid the country of these troubles,” the President said adding: “We need to move towards long-term solutions in order to overcome these difficulties.”
He said a strong foundation needs to be laid so as not to repeat this kind of economic crisis in the country. The economy should be modernised. Economic stability should be established and transformed into a competitive export economy.
“In this context, we are now preparing the necessary reports, plans, rules and regulations, laws and programs,” Wickremesinghe said and explained the planning framework which will be the basis for the country’s future journey.
He said within this framework, detailed information about the programs being implemented will be presented through the Interim Budget and the 2023 Budget to be presented to the Parliament.
As a preliminary step, the Government is negotiating a four year program with the International Monetary Fund (IMF) and will continue discussions from this month. He hopes to conclude the staff level negotiations expeditiously and successfully.
The finalisation of the debt restructuring plan has commenced in collaboration with Lazard and Clifford Chance, who are international financial and legal experts. We would submit this plan to the IMF in the near future, and negotiate with the countries who provided loan assistance. Subsequently, negotiations with private creditors would also begin to arrive at a consensus.
“We are also looking at formulating necessary policies, rules and regulations, and programs, to strengthen the export economy. Our ultimate goal is to re-establish that past legacy to create a strong and developed green economy,” Wickremesinghe said. He expects a turnaround in tourism from August and necessary initiatives are being taken to attract more tourists to Sri Lanka.
“I am committed to making effective changes for the future of the society. The foundation is being prepared to rekindle the middle class. Benefits are distributed fairly to the entire society, through a social market economy. I am taking measures to establish a Social Justice Commission for this purpose,” the President said.
He also told Parliament that the time has come to do away with loss-making State enterprises. “Four or five decades ago, there was an economic concept of State enterprise. However, it is now widely accepted that this concept is ineffective. Even former socialist countries now encourage private enterprises.
“If our country continues to nurture State-owned loss-making enterprises the country will take a further downturn. Therefore, we have to make policy decisions on getting rid of such enterprises,” the President said.
He also said the strategic geographical location of Sri Lanka is extremely important and the country should make best use of this favourable position.
“Bearing this in mind, our future corporate laws and policies should be formulated. A country cannot be sustained by taking loans, and therefore should reduce the borrowings to the extent possible. Therefore, I am joining with Hon. MPs in compiling rules and regulations and policies that will allow our country to get maximum benefit from the Indian Ocean centric new economic power,” Wickremesinghe said.
He also urged all parties to get rid of traditional thinking in striving to build the Sri Lankan nation. “Some groups stand idle while taking commercial loans at high interest rates and oppose investments that are beneficial to the country.
“The enormous loss caused to our country due to the opposition to foreign investments because of hearsay, without checking, cannot be qualified. However, people are aware of the losses caused to the country due to corruption and fraud,” Wickremesinghe said.
During his policy statement the President also posed some pertinent questions. “Why did our economy fall into such a low level? Why did we inherit negative results? Was it due to mistakes made by individuals? Or due to policy deficiencies?
“How were individuals allowed to manipulate the economy as they wished? Can the economic policy of a country vary from person to person? Is it favourable for the country or else harmful to change policies from time to time?
He said the new Government has examined this situation in depth. “As a remedy, we are preparing a National Economic Policy for the next 25 years. It lays the foundation for a social market economic system, securing development for the poor and underprivileged groups and encouraging small and medium entrepreneurs,” he said.
“Our aim is to create a surplus in the primary budget by the year 2025. Our effort is to raise the economic growth rate to a stable stage, in order to establish a solid economic foundation by the year 2026. Currently, public debt is 140% of Gross Domestic Product (GDP). Our plan is to bring this down to less than 100% by the year 2032.
“If we build the country, the nation and the economy through the national economic policy, we would be able to become a fully developed country by the year 2048, when we celebrate the 100th anniversary of independence,” Wickremesinghe said.
“When I draw long-term plans in this manner some ridicule me. Yes, I am not like other politicians. I have long-term plans. My planning in not for my own betterment, but for the young generation of today. I clearly know that I would not eat the fruit of the tree that I plant. But tomorrow, our children of the future generations will enjoy the fruit.
“I would also like to make a special reference on the foreign policy of our country. Due to the instability of the foreign policy, we faced many disadvantages and setbacks in the international arena. I will change this situation. All countries of the world are our friends. We have no enemies. We do not belong to any group. I will ensure the adoption of a cordial and friendly foreign policy with all countries,” the new President assured.
