Cannot deviate from the chosen economic path: President tells business leaders
The chosen path for the economy and the country at large is the correct one, and there is no turning back, President Ranil Wickremesinghe on Tuesday told a room full of business leaders in Colombo, at the Sri Lanka Economic Summit 2023.
“If I do not do this no one else is going to do it. If we don’t have a long-term agreement someone can turn it back. We cannot be auctioning non-existent resources. This is a radical restructure. There wasn’t any real consensus, but for how long are we going to be a beggar nation? Are the trade unions and political parties ever going to agree on this? We are asking for taxpayers from other countries (to pay) because we got it wrong.”
He added that to avoid another crisis within the next decade, each political party must work together to create change. Noting Sri Lanka’s urgent need to be competitive in the global economy, he highlighted transitioning into a digital economy that has local produce strong enough to compete with imports.
Talking about the low-hanging fruit of tourism, Mr. Wickremesinghe said that Sri Lanka should do away with the minimum room rates. “Which country has minimum rates? We have to open up to take tourism deeper into the city. So, don’t complain when the President’s House is shifted to Madiwela.”
Stressing key growth areas for the country, he said modernising agriculture for exports, tapping renewable energy in wind, solar, and green hydrogen, and opening the Eastern Province for tourism with regional flights, will be aggressively pursued.
Montek Singh Ahluwalia, a leading Indian Economist and former Deputy Chairman of the Planning Commission of India, said that if implemented, the IMF diagnostic report will make a good economic impact on the country. He said that Sri Lanka is the first country in Asia to do a diagnostic report which is relevant to other countries as well. He said that each country should ask what they can implement through this report. “This diagnostic report applies to many countries.” He warned that it is important to set up the institutions correctly. “They will not work if there aren’t the right people and the right structures in them.”
He said that democracy isn’t consensual but is confrontational and that the government should be insulated from politics.
Mr. Wickremesinghe said that the government will be bringing in the Revenue Authority and in two to three years’ time make significant changes in the economic structures.
Mr. Ahluwalia noted that the IMF has said that a cookie-cutter approach in implementing policies isn’t right. “It is important to concentrate on important things and to set up an environment that will help capital and investment flows. It is important to do things in a shorter time that will have a maximum impact over a longer period.”
The President said that the discussions on trade agreements are progressing. “We have indicated to Malaysia that we want an FTA. We have applied to the RCEP.” He added. The China FTA will need a longer time to negotiate.”
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