NEC chaired by President to present new economic plan

• The plan will be presented by next week, says President’s Media Division
• Clear deviation from status-quo from the UNP-led economic policy planning 
•  In the run up to LG elections, President said he would take over economy to ease cost of living 

The President addressing the National Economic Council 

The National Economic Council (NEC), chaired by President Maithripla Sirisena, will present a new economic plan next week to address the key economic issues of the country, the President’s Media Division said in a brief statement yesterday. It said the NEC met for the 8th time yesterday at the Presidential Secretariat and discussed short, medium and long-term programmes required to bring about the urgent changes to the 
 country’s economy.

Interestingly, the statement is a clear deviation from the pre-local government elections era, where economic policy announcements were always presented by Prime Minister Ranil Wickremesinghe.  In the run up to the local government elections, President Sirisena said he would take over the economic management of the country in order to reduce the cost of living burden on people. 

Political analysts opine that higher cost of living was a major reason for the embarrassing electoral drubbing received by both Wickremesinghe’s United National Party and Sirisena’s Sri Lanka Freedom Party.

However, Central Bank Governor Indrajit Coomaraswamy recently said Sri Lanka cannot afford any fiscal side slippage—possibly stemming from handouts populist measures— given the country’s extremely tight debt servicing conditions. 

“To be frank, there isn’t scope at all to loosen fiscal policy. The fiscal consolidation trajectory that was built  into the government’s 3-year mid-term budgetary framework; you can go up a little bit, it’s okay but basically if you go beyond that framework, it would be very challenging in terms of managing the debt dynamics,” he said.

Sri Lanka is now in one of the worst debt servicing cycles, with domestic debt servicing hitting a peak this year, and foreign debt servicing to spike from 2019 to 2022 with over US$ 3 billion in repayments each year— around double the norm over the past few years.

Prime Minister Ranil Wickremesinghe and Ministers Sarath Amunugama, Nimal Siripala de Silva, Managala Samaraweera, John Seneviratne, Sajith Premedasa, Rauff Hakeem, Malik Samarawickrama, Faizer Musthapa and Naveen Dissanayake were present at the council meeting.
Presidential Secretary Austin Fernando, Prime Minister’s Secretary Saman Ekanayake, NEC Secreatary General Prof. Lalith Samarakoon, Treasury Secretary Dr.R.H.S.Samarathunga, National Policies and Economic Affairs Ministry Secretary K.D.N.Ruwanchandra and Central Bank Governor Dr. Indrajit Coomaraswamy were the key officials who attended the meeting.   

NEC, which was set up in September 2016 with the approval of the Cabinet, which supersedes Prime Minister Wickremesinghe’s Cabinet Committee on Economic Management (CCEM), is mandated to advice and guide the government on matters relating to the country’s economic policy, and coordinating such policy among state institutions.

NEC is also mandated to create necessary mechanisms for the implementation of such policy. 

The current NEC board, which meets bi-weekly comprises of President Mithripala Sirisena (Chairman), Prof. Samarakoon (Secretary General), Prime Minister Ranil Wickremesinghe, Finance Minister Mangala Samaraweera, Secretary to the President, Secretary to the Prime Minister, Secretary to the Cabinet, Central Bank Governor, Finance Ministry Secretary and National Policy and Economic Affairs Ministry Secretary.