Prez pledges new economic order in budget

• Public Service to be reformed 
• Talks with IMF, India , China hopeful 
• Five SOS - Hilton, Water’s Edge, Telecom, Sri Lanka Insurance, SriLankan Airlines  to be privatized soon 

 By Yohan Perera and Ajith Siriwardana

President Ranil Wickremesinghe, in his maiden budget for 2023, pledged to introduce a new economic order to suit world trends and highlighted that Sri Lanka will embark on this new path through the 2023 budget. “The economic order which was introduced in 1978 is no longer valid. Our aim now is to take the country towards a new economic order. Sri Lanka will move towards a social market economy through the budget,” the President said. “It is important to look where we went wrong and where we have made mistakes. Governments which have ruled the nation since independence have focused on social welfare. Governments concentrated on making popular decisions rather than the right decisions. Popular decisions made the government popular temporary. We cannot go along this same path anymore. It is essential to go on a new path. The budget 2023 is designed to move out of this habit of depending on the government for everything. We have made right decisions rather than popular decisions in presenting the budget,” the President said.

“The budget does not comprise the economic reforms which the IMF has proposed. It will comprise proposals which are midterm measures to stabilize the economy. Our objective is to convert Sri Lanka into a developed nation by 2040.  The budget therefore comprised of export based proposals, proposals to build a green economy and digitalization.
“To ensure a better future for the youth of our country, let’s create a new economy tailored to meet the expectations of the youth through a new approach that goes beyond traditional protests, struggles and strikes,” the President stressed.

“Our aim is to convert the capital deficit into a surplus in the coming years, We also intend to increase tax revenue. It is currently around 8 percent of the GDP. Sri Lanka’s tax revenue is one of the lowest in the globe. We need to rectify this situation.

The budget 2023 proposals included setting up of new institutions such as a Data Protection Authority, National Development Committee, Export Development Office, Special Tax revenue Commission. The President proposed a health insurance scheme for both state and private sector workers. “We propose to amend the Employee Trust Fund (ETF) Act to use ETF funds for the health insurance scheme for the private sector workers,” he said.

The President proposed a new single labour law, opening of tax files for everyone over 18 years of age, phasing out of CESS in three years , new body to reform state sector institutions.
“This assembly should not forget that youth and the people alone have given a challenge. This is to decide whether we are going to get out of changing parties which rule the government  from time to time. Are we going to take up this challenge? he questioned.

“ Help us to build the new economy ,” he requested all MPs while reiterating that Parliament should appoint the proposed sectoral oversight committee,” he said .
The president sounded optimistic and said economic recovery would be possible through the measures envisaged.

“Negotiations with the International Monetary Fund are currently in progress. We are in dialogue with India and China on debt restructuring. We are confident that these discussions will lead to positive outcomes,” he said 

He said,”I recollect another personal experience of mine. In 1991, when I was the Minister of Industry, the Minister of Industry of Vietnam came to Sri Lanka. He wanted to study our open economic system and industrialization strategies. I made him aware. He was given the opportunity to discuss with the officials of the Greater Colombo Economic Commission. In 1995, Sri Lanka’s foreign reserves were USD 2.1 billion. Vietnam’s foreign reserves were USD 1.3 billion. The minister of Vietnam studied our methods and went to his country. What is the situation today? In 2021 Vietnam’s foreign reserves are USD 109.4 billion. Sri Lanka’s foreign reserves are USD 3.1 billion,” he said.

•High economic growth of 7 to 8 percent, increasing  international trade as a percentage of GDP by more than 100 percent, annual  growth of US$ 3 billion from new exports from 2023 to 2032, foreign  direct investment of more than US$ 3 billion are expected targets in the budget .

The President proposed to reform the public service based on recommendations of a committee to be appointed.

He said the state owned enterprises - Sri Lanka Insurance, Telecom, Hilton and Waters Edge - will be restructured.