Long way to go to address economy’s deep-seated structural imbalances - Treasury Secretary

Whilst Sri Lanka has achieved a degree of economic stability in the current context, the country is far from a stable equilibrium, Finance Ministry Secretary Mahinda Siriwardana stated.

"There is a long way to go to address the deep-seated structural imbalances in the economy. Economic reforms to establish stability have been front loaded and required legislation such as the Public Financial Management Act, Public Debt Management Act, and Central Bank Act has already been enacted," he added. Mr Siriwardana made the remarks during his speech at the farewell ceremony held for Deputy Secretary of the Treasury Priyantha Rathnayake yesterday. 

The second generation of reforms to unlock economic growth now need to be implemented, the Treasury Secretary observed. "This includes trade reforms, investment reforms, measures to improve the ease of doing business and to unlock the full potential of economic infrastructure such as the telecom sector and energy sector reforms. Trade and investment reforms are critical to ensure the required non-debt creating inflows to support long term external debt sustainability. Unless the required reforms are crystalized, fiscal discipline becomes entrenched, and the structural imbalances eliminated, Sri Lanka’s economic progress could be seriously hampered, given the lack of sufficient economic safety buffers," he added. 

In order to arrive at a sustainable solution, it is also necessary for Sri Lanka to get the maximum out of the new social contract that is being created by the new administration. The ongoing transformation is expected to change various decades-long economic, social and political practices and traditions in the country. In this context, the effective management of the economy based on contemporary domestic and international developments, and with a professional approach is critically important to preserve the hard-won gains in ensuring economic stability while improving governance and put Sri Lanka strongly on a path to economic recovery to achieve a higher, sustainable, green and job-rich growth to address poverty and inequality, and ensure much needed social protection and social justice, along with political stability in Sri Lanka, Mr Siriwardana also said. 

What is undeniable is the fact that Sri Lanka can no longer carry on in a “business as usual” manner, he warned. "As a country, we have to be able to adapt to a changing environment. Going forward, Sri Lanka must adopt a path of fiscal and macroeconomic discipline. The governance weaknesses and corruption vulnerabilities must be eliminated, which is one of the highest priorities of the new administration along with the recovery of stolen assets. And, as a country, we must strive to stand on our own feet whilst integrating with and competing with the rest of the world," he stressed. 

He paid tribute to DST Priyantha Rathnayake and his other colleagues at the Treasury who he said are among the many unsung heroes in the public service" during the last two and half years.