A highly competitive export-oriented economy is the only way out: President | Print edition

Views) :

President Ranil Wickremesinghe was the chief guest at the Professional Association Organization’s Annual Conference and Awards Ceremony held at the Cinnamon Lakeside Hotel in Colombo on Tuesday. Excerpts from his speech.

There is a profession that you have all left aside within the OPA (Organization of Professional Associations). Professional politicians and I don’t think you’ll be eager to have us either, which is completely understandable.

We agreed on some issues, disagreed on many others, but you are people who have made lasting contributions to the economy and to society. Today you gather here not only to witness the 3rd National APEX Awards, but at a time when our country is facing a crisis unprecedented in our modern history and the economic crisis began when our fragile economy was able to recover in 2017 to have a primary budget surplus, and then we were hit by a number of other events.

President Ranil Wickremesinghe addressing the takeover event on Tuesday

The 52 day gap when the government was overthrown, followed by the security issue that was the Easter bombing, followed by a political economic issue of tax cuts in 2019 and in 2020 we were hit by Covid and as and when. Bad decisions were made about fertilizers and a decision to maintain an artificial exchange rate. All this caused the crisis that we faced in January and February of this year.

This economic crisis, in turn, led to political contestation, first led by youth and the middle class, then taken over by more violent extremists who drove out young idealists. We have witnessed two outbursts of violence. The second aimed to paralyze the machinery of government.

I don’t need to tell you how bad the economy is. At some point when I became finance minister, I discovered that I was richer than the Republic of Sri Lanka when it comes to foreign currency. Most of you were. Because that day we had nothing, and I had US$1,000 at home that I had saved from a trip. So I was over 1000 times richer than the Republic. But if you take a person like Mr. Sanjeev Gardiner, he would have been about a million times richer than the Republic.

Nevertheless, that was what we were. There were times when we were looking for two to three million dollars just to pay a bill. We’re out of that step now, thankfully. But we are not out of the woods yet. We cannot continue to be an import-dependent economy with a trade balance that is unfavorable to us. What are we going to do now? It is stabilization. We are currently discussing with the IMF to finalize an agreement at the staff level and we are at the stage of serious things. So when you set the benchmarks and goals, a quarter of a percent can be the difference between prosperity and disaster. When that is completed, the staff level agreement will come into effect and that will give us confidence, the money will come from other donors, other multilateral organizations, and some investors would not mind taking the risk. The Lazards are preparing the debt sustainability plan, but first we need to discuss it with our official creditors.

Now there are two groups, the West who thinks of a haircut and the Chinese would like to provide additional loans to repay these loans. So there has to be an approach and we are talking with Japan about how that could be done and we will talk with China. We have already started talks with India and more will follow. The most difficult question is: how do you deal with private creditors? The money invested does not only come from multi-billionaires. Lots of money comes from pension funds and other income, banks and a haircut means these retirees have to take a wharf.

We know the situation in which we find ourselves where the EPF is worth half of what it was worth three years ago. So will they take this cut? That’s what we have to decide. Once we’ve done that, we need to increase revenue. Crown corporations can’t operate at a loss, so we made up for the grants they made earlier. We have to raise taxes and the banks will be very uncertain. There will be bankruptcies and small and medium-sized businesses will be affected. That we have to face; and the government is preparing measures for this. But let’s make sure it’s only for the short term and not even for the medium term.

For that, we must at the same time look at our stabilization. If we act quickly, it would be a short period. If we continue to argue, we will all suffer. This model therefore needs to be changed. First, we have to pay a large amount of foreign debts. We must become an export-oriented economy, in which we continue to earn more and more foreign currency. To do this, we must become more competitive, the state sector and the private sector.

We need to transform into a highly competitive export-oriented economy. There is no other way out. We are a country of 22 million people. Markets must be found outside. We have to compete with other countries. We have to look for new markets. The only way out is trade integration. There is no other way. Either bilateral free trade agreements or regional trade agreements, more for Southeast Asia and East Asia. But we have to do it in our own region by 2050. From Saudi Arabia to Indonesia, there will be another 500 million people, maybe more. It’s a big market. So we have a market on our doorstep. I know you’ve had many fights with us over integrated trade agreements, but you won’t lose anything. If you don’t target this market, you have no future. All you have to do is watch and get out.

The government must present plans to help you. We have to find those big markets to be competitive and there are areas to look at like logistics. We can serve the whole region, if the port of Colombo, Hambantota and Trincomalee are properly developed. One of the areas, as you mentioned here, is agriculture. With 500 million more people to feed, why not modernize our agriculture, not (rely on) traditional agriculture? Many of you here can participate. Services, new technologies, developing tourism on a different level. We have to prepare for the 4th industrial revolution and you all know what these technologies are. How it can be used and how you can earn money.

This is what we want you to do, but it means the complete restructuring of our economy. When the public sector falls, we must have enough money and income to finance education and health, a new education system, social mobility comes from education, health system and housing; these are basic needs. We have moved towards the social economy of marketing. It’s restructuring what we have. Then the governance itself, everyone admits that this model has failed. Now, are we going to do the same policy again? To bring back the same model? This is the question asked by all those who engage in politics inside and outside parliament.

How are we going to restructure the whole system? First, let’s take the 22nd amendment and pass it. The minister is taking care of it and I totally agree. Then we try to make Parliament a government by having control commissions, by having a National Council. The control commissions are composed only of parliamentarians but can invite five youth representatives, who can put questions to the parties with the authorization of the president. Although they cannot write in the report, they have the right to put an addendum to the report as to their views.

It is far reaching. No other country in the world has allowed Youth Watch Committees to participate. We have to make it a success. Other Committees – there are about five committees covering Public Finance, COPE, Public Accounts Committee, we will be looking at a Ways and Means Committee, a Banking and Financial Services Committee, a Committee on Public Enterprise Restructuring, so they have to work in collaboration with the government. Parliament becomes the government. They become part of the government and with us willing to invite some of the committee members to come for cabinet meetings. The National Council which will be made up of all the party leaders to see where we can reach a consensus and try to arrive at a common minimum programme.

We also have to think about our electoral procedures. The ranked ballot system has done a lot of damage to the voting system. In this Parliament, we must have the capacity to invent a new system. We cannot pass it on to others. The baby is ours, and if we have taken it, we must carry it. And if possible, to go from there to go towards a new Constitution.

But there is much more. So parliament is a lot of legislation because climate change alone will take a few months for the legislation to pass. Women’s rights. However, parliament can’t do all of that, so we thought we’d ask the country. Former President Karu Jayasuriya and Mr. Victor Ivan came up with the idea of ​​Jana Sabhas to collect people’s ideas and pass them on. It’s a good concept. Especially those who went out on the road who wanted change, can come in and talk. And then there are also those who did not want change and they too can come and talk with the others who want change. It’s not something we politicians can do and we don’t think we have the credibility. Therefore, credibility is what we have established by giving it to outsiders. So in this area, where you can all participate, first economically and then socially. We need a strong civil society, a civil society capable of influencing and where young people are not left out. We want everyone to join us.

We have to sort out the issues between the ethnic groups because it has been going on for too long since the war ended in 2009 and there is no need to fight again. Let’s be like the Sri Lankans and also look at the diaspora. It is a strength and a source of investment. So I have decided to set up a Diaspora office which will deal with the Diaspora separately and the groups they have.

This is a part of the new Sri Lanka where we are expanding the horizon of economic activity and governance and I am sure you will all wholeheartedly participate in it and let us all come together because this is the last chance that we have. If we don’t do that, I don’t think there will be a fourth APEX National Award.

The best way to say you’ve found your dream home is to find it on Hitad.lk. We have listings of apartments for sale or for rent in Sri Lanka, whatever location you are looking for! Whether you live in Colombo, Galle, Kandy, Matara, Jaffna and more – we have them all!

Comments are closed.