INSUBCONTINENT EXCLUSIVE:
noted that two key objectives have been incorporated, ensuring that all citizens have an adequate standard of living and promoting rapid
development across the country through public and private economic activities aimed at social objectives and the public good.President
Wickremesinghe highlighted that the recently submitted Economic Transformation Bill is designed to achieve these ambitious goals within the
framework of the constitution
He asserted that this legislation underscores his adherence to constitutional principles, thereby countering any accusations of
in the region have recently held elections, resulting in the formation of new governments
The President emphasized the importance of this election, suggesting that it will decide whether Sri Lanka continues the cycle of changing
governments every five years or sets a course for sustained national progress.President Ranil Wickremesinghe highlighted the International
He noted that Sri Lanka has met all its quantitative targets for the end of December 2023 under the current economic program, with the
exception of the indicative target on social spending
recover swiftly from its economic crisis, President Ranil Wickremesinghe expressed that the current situation has exceeded his expectations
He attributed this success to the dedicated efforts of the Central Bank of Sri Lanka, which played a crucial role in guiding the nation
through challenging times by enforcing policies that curbed expenditure.He also expressed gratitude to the Government and Reserve Bank of
India, as well as the Government and Central Bank of Bangladesh, for their financial support, which he described as lifesaving
outlined future plans for Sri Lanka, including the introduction of the new Central Bank Act aimed at ensuring monetary stability
He also mentioned upcoming legislation such as the Public Debt Management Bill and the Public Finance Bill, which are expected to bolster
financial and monetary stability in the country.The President underscored the importance of combating corruption and detailed the
Actually, it was better than what I anticipated
All quantitative targets for the end of December 2023 were met, except the indicative target on social spending
Most structural benchmarks due by the end of April 2024 were either met or implemented with delay.The work we have been doing in the last
I was confident, and I am fortunate to have had a team that shared this confidence
I must acknowledge the role played by the Central Bank of Sri Lanka in guiding this group, especially under very difficult circumstances
They upheld policies requiring a curb on expenditure, something unfamiliar in Sri Lanka for a long time.I must also extend my thanks to the
members of the Secretary and the Ministry of Finance, who, along with the Central Bank, were responsible for formulating the policy and
handling the pressures of budgetary restrictions that the Central Bank did not have to face
Additionally, I must thank the Government and the Reserve Bank of India and the Government and the Central Bank of Bangladesh
That three and a half billion and that 200 million were lifesavers
Maybe this hotel would have burned down.Their support allowed us to obtain some fertilizer, which we received as aid from USAID, and
assistance from the World Bank
banking amid multifaceted global economic challenges
This topic requires in-depth discussion for this region
I need not elaborate on the role monetary policy has played since the 2009 crisis and the measures needed to recover from COVID
the challenge that can be posed by the BRICS? These are concerns for all of us, and South Asia should take a similar stand, especially with
the move towards de-globalization after years of being urged to globalize
What happens to the international monetary system? But I will not go into detail on those.I thought of speaking a few words about what Sri
Lanka has achieved and what we plan to do in the coming years
To illustrate the depth of the crisis, let me provide a few facts
The fixed exchange rate at that time was 3 rupees 32 cents
In 1978, when I was in the Cabinet, we did away with the fixed exchange rate and moved to a floating exchange rate, which was 16 rupees per
By 2009, we had reached 116 rupees to a dollar, despite expansive schemes like the Mahaweli Development Scheme, which required money
The IMF stated there was a moderate risk of external debt distress.After 2009, when the war was over, the Mahaweli Scheme made us
self-sufficient in rice, saving foreign exchange
Our free trade zones ensured our manufactured goods were exported, and we had a thriving tourist industry
By 2024, people expected the rate to reach 400 rupees per dollar
So, the story from 1949 to 2024 highlights that the growth of the economy often relied more on printing money than on central bank policies
As a borrower, we either borrowed money or printed it.Fortunately, I was in a good position because my family was involved in printing, so I
The new Central Bank Act, which we have presented, aims to ensure monetary stability
The central bank cannot grant credit to the government
There is no way to obtain loans from the central bank, nor can money be printed or taken from the state bank
This forces us to look at how to raise revenue
Additionally, there are inflation targets.We have three laws: the Central Bank Act, the Public Debt Management Bill, and the Public Finance
Bill, both of which will be passed by Parliament
These will form the framework of our financial and monetary stability
Once we carry this through, I see Sri Lanka achieving stability in monetary and fiscal affairs for the next decade or more.The second issue
Corruption has been a significant issue in Sri Lanka, and everyone talks about how to address it.No one tells us how to catch them
So my government has come to an agreement and discussed the matter with the IMF
We also required their help, and we brought the governance diagnostic report
Many laws have to be passed
One has been passed, the Anti-Corruption Act
The second one, proceeds of crime legislation, is now being drafted to be sent to Parliament
There are a series of other laws that are required
By 2025, we will have the strongest anti-corruption system in South Asia and even, I think, in Southeast Asia, except for one or two
So this brings us to the next part of the issue
The next issue is the one that worries all politicians: jobs
How do you create jobs?There are a large number of people in our country who expect jobs
As the level of education goes up, they are not satisfied with just a menial job; they expect satisfactory jobs
In our country, virtually everyone has a mobile phone or two at most
But what is the expectation of a job? We have to realize that our per capita income also has to increase as we find jobs in this area
This is also a growth area
One of the World Bank reports on growth for 2024 states that growth in South Asia is expected at 6% for 2024
Are we going to get stuck with jobless growth, destabilizing the system? Or are we looking at growth?This is what I thought we should
We pass various enactments creating one authority or abolishing it and creating another one, but the total framework is not created by us
In many other countries, you find certain laws on economic development and regulating the financial system
We stick with the British policy of not doing it
Britain accepts a free market economy
our goals are.I thought we should bring in the third part of the legislation, which is the most important to me: How do we ensure economic
growth? What do we do? For Sri Lanka to attain growth, we have to transform our import-based economy into an export-driven economy
Sustaining the reform momentum and efforts to restructure debt are critical to putting the economy on a path toward lasting recovery and
rule onwards that created a colonial market economy dependent on plantations
In 1972, there was a breakup of capital formation and a strictly controlled economy
From post-1977, we started gradually liberalizing, but we did not bring the necessary legislation
A series of legislation brought in the 1972 economy, but we were chipping away after that
Each time we chipped away, there was some demonstration outside or a campaign against it
Nevertheless, we chipped away
I said, forget about that
Do it and be done with it
I have, in fact, incorporated two of the objectives: to ensure that all citizens have an adequate standard of living, and to create rapid
development of the whole country by means of public and private economic activity towards social objectives and the public good
First, I put down in the law that I am working within this constitution
No one can say that I am going outside the objectives of the constitution
These two provisions are more than enough to rewrite the economic policy of Sri Lanka
It has to be growth-oriented; others have failed.In clause 3, section 3, I put down that the national policy on economic transformation must
provide for the restructuring of the debt owed by the government
The public debt to GDP ratio shall be below 95% by the year 2032
The central government annual gross financing needs to GDP ratio shall be below 13% by 2032
That is what we agreed with the IMF
The central government annual debt service in foreign currency to GDP shall be below 4.5% by 2027 and thereafter
This is one part of the national policy on economic transformation, which has some of the factors to be provided in the national economic
transformation.The second part is the transformation of Sri Lanka to a highly competitive export-oriented digital economy
This is a legal obligation, including diversification and deep structural changes in the national economy to boost competitiveness
The law states that we must have deep structural changes
Achieving net zero by the year 2050, increasing integration with the global economy, achieving stable macroeconomic balances and sustainable
debt, modernizing agriculture to boost farmer productivity, incomes, and agriculture exports, and promoting inclusive economic growth and
social progress are also part of the plan.The cabinet of ministers, in formulating the national policy on economic transformation, must
ensure the following targets: GDP growth to reach 5% annually by 2027 and above 5% thereafter
Unemployment should be below 5% of the labour force by 2025
Female labour force participation should reach not less than 40% by 2030 and not less than 50% by 2040
The current account deficit of the balance of payments shall not exceed 1% of GDP annually
Exports of goods and services as a percentage of GDP should reach not less than 25% by 2025, not less than 40% by 2030, and 60% by 2040
Net foreign direct investment as a percentage of GDP should reach not less than 5% by 2030 and not less than 40% after 2030
The primary balance in the government budget should reach 2.3% of GDP until 2032 and at least 2% from 2032
Government revenue should reach at least 15% of GDP beyond 2027
The multi-dimensional poverty headcount ratio should be less than 15% by 2027 and 10% by 2035.These are difficult targets, but unless you
Otherwise, you must act within this framework
It also means that, as I have done earlier, we all work together
I meet with the governor, my economic advisor, and others weekly
But it means that we can now put together a mechanism
A legal mechanism has to come into place, either by cabinet vision regulations or by law
We have the central bank, the treasury, and economic advisors all working together to achieve this objective.Now, to begin with, I want to
ensure that the initial beneficiaries of the measures we have taken with the IMF are the ordinary people of Sri Lanka
They are the ones who suffered most
They are the ones who lost their jobs, had to mortgage their properties, and sell their land
To ensure that, I have said that we should ensure the money goes to the bottom
Stabilizing the rupee and bringing interest rates down has been one benefit
With the help of the World Bank, we have increased social welfare payments threefold
From 1.8 million families, it will go up to 2.4 million families
We gave government workers a Rs
10,000 allowance, and the private sector followed
The government ordered plantation companies, which had refused, to make a payment of Rs
It was a challenging course, and the court threw out the challenge
So we have ensured that money goes in.We also created a district development budget
These are decentralized funds to build roads in villages or put up buildings, which means giving money to small contractors and others in
A fair amount has been given to the people
Since 1935, the government has been giving out land for people to cultivate, but never ownership, only through a permit
Similarly, we have built houses for low-income families in and around the city of Colombo, which are again given for rent
We took a policy decision, which we are implementing now, that all lands given to average people for building houses or for cultivating will
now be given as freehold land
For those who have these low-income apartments, we will give title deeds, which means 2 million additional families are going to get this
These are bankable assets, so look at how the banking service expands and how you take it to rural areas.We are also bringing in new laws to
change vocational training because large numbers go into vocational training more than university as they look for employment
These are some of the measures we are taking to ensure that the lower end of the population benefits from the measures we take
It cannot be confined to a few at the top
We have already got hotels in the Maldives, and now we have investments in Bangladesh
We are seeing Indian investments coming into Sri Lanka
As we expand, I think we can deal with the economic issues relating to collaboration.We are at a very significant moment
In many of the countries, we have just won elections, and new governments have come in
In Sri Lanka, we are going in for elections
Is it going to be the usual way where we change the government every five years, or are we really going to deliver? The central banks have a
MD Golam Sarwar, Finance Ministry Secretary K
Mahinda Siriwardena, Governor of the Central Bank of Sri Lanka Dr
Nandalal Weerasinghe, Governor of the Reserve Bank of India Mr
Shaktikanta Das, Governor of the Royal Monetary Authority of Bhutan Mr
Dasho Penjore, Governor of the Maldives Monetary Authority Mr
Ali Hashim, Governor of the Rashtra Bank of Nepal Mr
Maha Prasad Adhikari, Governor of the State Bank of Pakistan Mr
