An outward looking economy, that is integrated with the global economy, is necessary to turn around the country’s debt ridden economy, Prime Minister Ranil Wickremesinghe said yesterday.
He also cautioned that the future is bleak if this was not done fast.
The Premier, addressing the 32nd Sri Lanka Economic Association Annual Sessions, at the Center for Banking Studies auditorium in Rajagiriya, presented his views on what he thinks should be the focus in the coming years to uplift Sri Lankan economy.
While inviting the ideas and suggestions on what short term measures the Government can do to create employment and increase income of the people, the Premier pointed out that the Government has accepted the challenge to reach those targets mainly through the existing enterprises in Sri Lanka.
“We have to reach those targets with many inefficient state owned enterprises.But some of them can be made efficient. But it will take some time.We are also tackling the question of inordinate bureaucratic delays, but some of these will bring results in the medium term and the long term. What do we do in the short term?” he questioned the audience while stating that the private sector should not be prevented from coming forward.
“Stabilising the economy is not an option for us but a necessity and we have succeeded it. The Central Bank had a tough job in the last two years and it will not be any easier as our biggest loan repayments are coming in 2018 and 2019.We have the highest debt in the region and that is sucking up all resources of the Government.Expansion of non-trade activity and the drop in exports have contributed to worsen the situation,” he noted.
“The National Government is not the easiest form of Government, but nevertheless it gives certain stability despite the minor policy differences and frictions that are coming up. It gives us the opportunity of laying down a framework which will be followed thereafter.There will be no ‘U’ turns,” he added.
Wickremesinghe proposed that Sri Lanka needs to liberalise and open up the economy further in the short term while helping local industries to be more competitive and export oriented. “Some in the domestic manufacturing sector are worried of liberalisation, but most of them have the potential to be competitive. While we think on the medium and long term, let’s work now in the short term because that is where the results will come immediately,” he remarked.
The Premier pointed out the capital market formulation in Sri Lanka and liberalisation of exports will make Sri Lanka the most open economy in South Asia.
Commenting on long term economic plans, Wickremesinghe highlighted the need to exploit the country’s strategic location in the middle of the Indian Ocean. “If we can develop the Colombo, Trincomalee and Hambantota harbours, we will be the logistics centre of the Indian Ocean. Expansion of the Colombo harbour would mean that Sri Lanka will be the transhipment hub to India for the next 25 to 30 years. The best harbour in the Bay of Bengal is the Trincomalee harbour. There is potential for these two harbours to ensure closer economic cooperation between the five Southern States of India and Sri Lanka,” said the Premier while stressing that future markets are going to be around the Indian Ocean.
Special Assignment Minister Dr. Sarath Amunugama, Economic Affairs and Policy Planning Deputy Minister Dr. Harsha de Silva and Central Bank Governor Dr. Indrajith Coomaraswamy were among the many distinguished guests attended. The Asian Development Bank launched the book “The Sri Lankan Economy: Charting a New Course” at the occasion and the first copy was handed over to the Prime Minister.