- Prime Minister makes revolutionary and comprehensive economic policy statement to ensure meaningful and sustainable development
- Announces far reaching economic and social reforms to generate crucial employment and rise in incomes to people
- Moots fundamental economic policy changes and restructuring in public sector including privatisation via credible stock market
- Commits to prudent fiscal management with record low Budget deficit
- Assures support for socially responsible private sector led growth
- Highlights future high growth sectors with special emphasis on exports, local industries
- Minimise tax holidays, want foreign and local investors to benefit from be competitive via peace dividend and other benefits
- PM’s statement widely commended but analysts insist it requires strong leadership, political stability and a competent team to deliver
By Ashwin Hemmathagama, Our Lobby Correspondent
Prime Minister Ranil Wickremesinghe yesterday spelled out his economic policy priorities, as he unveiled the Government’s socio-economic program to make Sri Lanka a vibrant and successful global citizen.
The much awaited, comprehensive outline of future direction of the country was made in Parliament by the Premier in his Economic Policy Statement ahead of the unity Government’s maiden Budget for next year on 20th November.
The speech which received widespread applause within Parliament signalled that the Sirisena-Wickremesinghe unity Government means business or wants to get down to business post-Budget. This position of strength comes from the overwhelming mandate received on 8 January and reinforced on 17 August and after having restored Sri Lanka’s image internationally especially with regard to sincerity and commitment on post-war reconciliation.
The visionary economic policy statement found favour with a majority of MPs and those who believe Sri Lanka can get its economic policy right going forward. Initial response from the private sector and other stakeholders was one of confidence and hope. However such a bold vision would require strong leadership, political stability and a competent team to deliver, which most analysts confirm will be the key challenge.
Having succinctly recapped historic and recent ills of the country and political and economic policies, Premier Wickremesinghe’s presentation focused largely on the way forward, a journey he said would require revolutionary thinking, bold policies and initiatives to transform into a vibrant and prosperous nation.
“From 8 January onwards, we have been able to lift the people of this country up from their economic woes,” said Premier Wickremesinghe.
“The boasts of the previous Government about the increase in individual income levels was simply not true. Let us learn the lessons from the past. We will celebrate 75 years of independence in the year 2023. If we walk the right path, we have the potential to become one of the strongest economies of Asia. So let us seize the opportunity – let us rise higher towards our goal,” said Wickremesinghe.
“I would like to point out that all signs that assure us we are on the right track are here,” he said after listing a series of policy measures.
Wickremesinghe said that the economy that the unity Government plans to build must yield results for all. “An economy that will promote the benefits of development among all. An economy that will be friendly to all, beneficial to all. An economy that will pave the way for sustainable development,” he said.
“What we are hoping for is a lawful economic environment that will set the stage for sustainable development. We will incorporate a sustainable development entity that will provide the necessary framework and initiate the needed mechanisms,” said the Premier.
“The third generation of economic reforms envisioned by us as indicated here, is based on multifaceted economic mechanisms and the increase in trade development. Many qualified people prefer well-paying jobs that are given based on professional capabilities.
It is not viable to maintain a low paying production based economy,” he added.
In summing up the Prime Minister said “We need to make sure the golden era of prosperity that Sri Lanka had during the period from Manawamma to Maha Parakramabahu dawns again. We must enter the right path for this to happen, with accountability, patience and commitment. Only then can we create a better country for our future generations and lift our country to the rightful place it deserves.”
“This is why we need to make use of this opportunity. It is a collective responsibility for us all. I invite all of you to join hands with us and bear responsibility in making this vision a reality.”
Sri Lanka under global spotlight
Prime Minister Ranil Wickremesinghe yesterday suggested that Sri Lanka will increasingly come under positive global spotlight.
“We have been invited to participate in the world famous World Economic Forum due to be held in Davos Switzerland in January 2016 with the participation of over 40 heads of state and 2500 economists. Before that, we will have an economic summit in Sri Lanka – the highlight of this will be participation of world famous author and investor George Soros,” said the Premier.
“Additionally, the world famous Euromoney magazine will sponsor an economic summit in Sri Lanka in January 2016. All these activities will give Sri Lanka the opportunity to connect our economy with the world,” he added.
Market welcomes PM’s statement
Lanka Securities said yesterday that the Colombo bourse welcomed the economic policy direction set by the Premier Wickramasinghe and closed in the positive territory on Thursday. “Prime minister’s speech which was delivered near to the session close managed to lift the index from the 7,000 mark to close the day at 7,017.39 with a gain of 13.82 index points or 0.20%. S&P SL20 index bagged 9.50 index points (+0.25%) to end at 3,794.11,” it said.
“Though the investor reactions to policy speech can only be seen in full in the next session, it is expected that the positive policy reforms introduced to address economic issues would be well-received by the investors,” Lanka Securities added.
SC Securities said “Colombo equities demonstrated an upward trend today, with the announcement of basic economic reforms by the Prime Minister, in the parliament.”
Reuters said stocks ended firmer on Thursday led by blue chips, and stockbrokers expect the market to react positively to the Prime Minister’s medium-term economic policy statement, which focused on raising revenue through reforms.
The main stock index ended 0.2% higher at 7,017.39.
The day’s turnover was Rs. 779.8 million ($5.51 million), less than the year’s daily average of Rs. 1.1 billion.
Prime Minister Wickremesinghe, outlining the Government’s economic priorities ahead of the 2016 Budget announcement, said the Government would minimise tax holidays and aim to garner more revenues from the rich through direct taxes, a move that could be praised by the International Monetary Fund.
“All in all, it looks positive. This is what people have been waiting for,” said Dimantha Mathew, a research manager at First Capital Equities Ltd., adding that he expected the market to react positively to the Prime Minister’s statement.
The next trigger for the markets would be the budget scheduled for 20 November, analysts said.
Shares in Hemas Holdings Plc rose 3.13% while conglomerate John Keells Holdings Plc gained 1.40%.
Foreign investors, who have been net sellers of Rs. 3.71 billion worth of equities so far this year, bought a net Rs. 16.5 million worth shares on Thursday.www.ft.lk
