Targeting exports and investment, the Government will introduce several laws including possible new legislation to improve the ease of doing business, Prime Minister Ranil Wickremesinghe said yesterday.
Speaking at the International Organisation of Securities Commissions (IOSCO) GEM Annual Committee, which was hosted by the Securities and Exchange Commission of Sri Lanka, Wickremesinghe acknowledged 2018 and 2019 would be crucial years for Sri Lanka but was upbeat over the economic prognosis due to reforms and expectations of increased investment.
“We want a new monetary law which will have the Central Bank focusing on the essential items and not being involved in peripheral activity. Secondly, we have the liability management law and we are already working on creating a national debt office in the Ministry of Finance. We are already working on two laws, one for the Securities and Exchange Commission (SEC) and another on the demutualisation of the stock exchange, which have been approved by Cabinet,” he said.
“These are in the draft process. We are also coming through on a program to encourage the ease of doing business, a new law may be necessary on how we deepen it.”
As Sri Lanka will squarely be at the centre of countries with expanding economies by 2050, the Prime Minister also called on the industry to map out how capital markets can be broadened to provide much needed capital for growth and investment.
“A taskforce on investment, legislation on the single window clearance committee is also ready and being drafted. With this we are looking at exports and our competitiveness, our services, tourism and logistics sectors.”
He also pointed out that the Government has enhanced the capacity of the Customs and Inland Revenue and Excise departments, bringing in new technical measures to increase revenue collection. This will be supported by a national debt management strategy that will provide a fixed timetable of when the State will come to the market to raise funds when repayments are due. Once revenue was at a stable level the Government will consider rolling back the corporate tax rate from the current rate of 28%-25% or lower.
“We are on the right track. We have strengthened the external situation of our country to better face global market vulnerability. We are creating a series of measures to attract non-debt creating inflows, particularly for exports and FDI. We are entering into bilateral economic partnerships with a number of countries to enhance market access.”
Steps taken this year will drive investment in 2018 Wickremesinghe said, highlighting the $ 1.1 billion from the Hambantota port and inflows expected for the Port City. A further $ 600 million is expected as investment for the harbour. He insisted these were positives despite the barrage of publicity the port handover generated locally and internationally.
“We have received a lot of free publicity for the harbour and it requires no more, that is one advantage,” he quipped. “We told the joint venture we should be able to charge you for publicity.”
“With the Mattala airport we would do the same and hope to have it off our balance sheets by next year. We also expect some basic investments to come into the area, including a dockyard, refinery, steel and cement plants and LNG plants. The latter will be one of three Government-to-Government plants with two more to come in Colombo and a tender for one more LNG plant. This is all money that will come in next year not looking at other investment, which includes $ 1 billion to come in from the next stage of the Port City,” he said.
Nonetheless, Sri Lanka will continue to face challenges, the Prime Minister conceded, with climate change having an increasing impact on growth. As Sri Lanka has traditionally depended on good weather for its agriculture sector, continued extreme weather will put pressure on the economy to evolve into non-climate or climate resistant sectors, he said.