More challenges in line for the new government
While the country witnessed the much awaited and delayed Parliamentary election last Wednesday, many challenges are in line for the new government, regardless of who comes into power. Growth and debt challenges lie on one side, while the COVID-19 impact and recovery plans lies on the other. 
The Sunday Times Business Club (STBC) last week (July 30) organised a panel discussion on ‘Challenges for the new government’ with two panellists Shiran Fernando, an economist and Jehan Perera, a political affairs analyst, making presentations.
During the discussion, Mr. Perera highlighted the need for a strong government. “Getting rid of the 19th amendment to the Constitution of Sri Lanka is a dangerous thing to do. The last government made a lot of promises by changing the constitution, but did not deliver them. The 19th amendment reduced the powers of the president and made it on par with the Prime Minister and Parliament. Will the power balance go in favour of the President strengthening his powers which ultimately reduces the power of Parliament with this election?” questioned Mr. Perera while adding that the 19th amendment by far has a centralised power.
Economist Shiran Fernando stressed that regardless of who comes into power, the economic challenges will remain the same. “There are challenges in the country’s growth and debt, challenges in the international sovereign bond and reserves for the new government to go forward. 70 per cent of the GDP is resilient on consumption. In the past the country grew on sectors such as construction and infrastructure. Now the focus is drawn towards agriculture which the government needs to really think about.”
He also stated that there is no budget in place for next year due to the COVID-19 pandemic and elections getting delayed. Sri Lanka’s foreign exchange reserves will remain at US$ 5-6 billion in the next few years. “It’s a question of how are we going to refinance this strategy,” noted Mr. Fernando.
The government needs to come up with a policy reforms agenda. The President is keen on digitisation which is a very good thing. More focus has to be given on the trade policy while there is global protectionism going around, Mr. Fernando stated.
He also mentioned that import duty might not be restricted to a certain sector in Sri Lanka. COVID-19 has put a spotlight on countries like Sri Lanka which may come out and diversify. New Zealand is looking at Sri Lanka as a gateway to South Asia.
During the question and answer session, Mr. Perera reiterated that by and large the government has been able to contain the pandemic very well though there are doubts expressed in the veracity of the statistics revealed.