Economic liberalization programme to go unhindered: Mangala

Mangala Samaraweera
Pic by Nimalsiri Edirisinghe

• Says shipping industry liberalization very much on the cards
• Stresses need to improve competitiveness of the economy
• Says economy stabilizing after political uncertainty

By Indika Sakalasooriya

Finance and Mass Media Minister Mangala Samaraweera yesterday vowed that the government’s economic liberalization programme will press ahead undeterred and the delayed shipping industry liberalization is very much on the cards.

“We will continue to build competitiveness by liberalizing the economy, where we see excessive control and cost, and our liberalization programme will go unhindered in the next few months—specially the liberalization of the shipping sector is very much on the cards now,” Samaraweera told the inaugural Breakfast Buzz series organized by the American Chamber of Commerce in Sri Lanka.

This was Samaraweera’s first official engagement with the country’s private sector business leaders after Prime Minister Ranil Wickremesinghe’s government was reinstated in December following a 52-day political crisis. 

The minister said building competitiveness in the economy by continuing the reform programme remains a key economic priority of the government. 

Samaraweera in his 2018 budget proposed to do away with the restrictions imposed on foreign ownership of shipping agencies to attract foreign investments to the country’s shipping and logistics sectors.

But the move was vehemently opposed by a powerful domestic shipping industry cartel. 

Meanwhile, the minister said since the reinstatement of Prime Minister Wickremesinghe’s government, the country’s economy has been brought back on to the right track after much hard work.

He pointed out that the loss of confidence caused by the prolonged political uncertainty resulted in a surge of capital flight, foreign reserve depletion, rupee depreciation and downgrading of the sovereign rating by all three international rating agencies.

Samaraweera said had there been no interruptions, Sri Lanka would have been able to enjoy a robust boost to the economy with the favourable developments in the domestic front, such as better weather and, declining oil prices and easing of its stance by the US Federal Reserve in the external front.  “Unfortunately, Sri Lanka was deprived of the opportunity to benefit from these emerging tailwinds as we got engulfed in a political crisis,” he said.

However, the minister stressed that a lot of damage caused by the political uncertainty has now been addressed and the economy has been stabilized. 

A lot of the damage of the coup has been addressed and the economy is stabilized. 

“External borrowings cost has declined by 200 basis points, assuming US $ 3 billion in fresh borrowings this year, which translates into savings of over Rs.10.8 billion.

“Foreign capital is now flowing back into the economy with Rs.8 billion inflows in government securities.

The rupee has appreciated 2.3 percent so far this year,” he said.

Samaraweera added that the government’s focus now is on rebuilding and repositioning the economy through responsible fiscal policies while enabling space for targeted growth support programmes such as Enterprise Sri Lanka and the rapid rural development programme, Gamperaliya.

Shipping Minister says yet to take final call on liberalization 

Minister Sagala Ratnayake at the launch of the news website

Ports, Shipping and Southern Development Minister Sagala Ratnayake yesterday told reporters in Colombo that he has not taken a final call on the proposed liberalization path for the country’s shipping industry.

Ratnayake said it should be done in a matter that does not adversely affect local businesses.

“Liberalization is essentially a good thing. But I am also of the strong belief that it should not make a negative impact on local industries. As the minister, I also have a responsibility to protect the local industry. It’s all about striking the right balance,” he stressed.

He said this during the launching ceremony of a maritime news website initiated by the Sri Lanka Ports Authority (SLPA) to disseminate up-to-date information on the ports and shipping sector — a move that would strengthen Sri Lanka’s image in the global maritime sphere.

Meanwhile, the minister said a master plan supported by the Asian Development Plan (ADB) would lay a robust foundation for the ports and maritime sector’s development until 2050. 
“We had a lengthy meeting yesterday on the master plan and its proposals for every port in the country. It is a comprehensive programme that will serve as a roadmap for the sector’s growth,” he said.

Ratnayaka also said the Oluvil harbour in the Eastern province would be handed over to the Fisheries Ministry to be developed as a fisheries harbour. 

He added the ministry understands it was the ideal plan for the Oluvil harbour which had too little prospects as a commercial port. 

“We are also in the process of deciding our course of action on the much-talked-about Eastern Container Terminal (ECT) project. I have requested the Ministry Secretary and the SLPA to present their observations on the matter. 

“They will have to evaluate whether it is financially-viable for the SLPA to invest in the ECT project or it should partner with an external party. Based on their recommendation, I will discuss the matter with the President, Prime Minister and the Cabinet,” the minister explained. 

Commenting on India’s involvement on the Kankesanthurai port development project, Ratnayaka said the matter was still under discussion.

“India will definitely support us on the ports and maritime sector. But, the level of their involvement is still being discussed. I think the Prime Ministers of India and Sri Lanka have discussed the matter at a very high level. I am still not aware of any final agreement.”