Sri Lanka’s President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe has launched a policy document for until 2025 with a more detailed three year plan.
“The gist of the argument is that for us to achieve our vision, we have to make Sri Lanka the hub of the Indian Ocean by creating a ‘knowledge based highly competitive social market economy’,” Deputy Economic Policy Minister Harsha de Silva said.
The so-called ‘V2025’ document called ‘Country Enriched’ envisages a peaceful nation where everyone has an “equal opportunity at prosperity”, he said.
Sri Lanka’s United National Party came to power promising to set up a social market economy, but in the first year it started slapping price controls.
The administration pursued a policy of unsound money, printing more than 200 billion rupees, releasing equal amount of locked up liquidity, busting the currency from 131 to 152 destroying real wages or workers and lifetime savings and putting foreign investors in bonds into flight.
A massive corruption scandal involving rigged bond auctions also rocked the administration.
However the central bank is now with a safe pair of hands. Meanwhile price controls are being taken off. Some food taxes have also been taken off, giving an opportunities for the less affluent to feed themselves at prices close to those enjoyed in South and East Asia.
More trade liberalization is also planned, but the administration faces challenges from vested interests that have enjoyed high prices and excessive profits from import duty protection. (Colombo/Sept04/2017)