Government to utilise all necessary tools to revive economy: Cabraal

Ajith Nivard Cabraal
Pic by Waruna Wanniarachchi

• Says President has already laid clear foundation for government’s policy framework 
• Asserts country’s capital markets require a policy able to attract foreign funds
• Notes increasing foreign holdings in govt. securities a key task
• State Minister tasked with facilitating the setting-up of main offices of int’l biz giants in capital city, Port City

By Nishel Fernando
The government is prepared to utilise all necessary tools to revive the country’s virus-hit economy and to restore the trust in the economy backed by clear-cut polices and their prompt implementation.

“We are hoping to utilise all necessary tools to stimulate the economy. We have already utilised many of these tools and we will have to utilise more as we move forward,” the newly appointed State Minister for Finance, Capital Market, and State Enterprise Reforms, Ajith Nivard Cabraal said.

He made these remarks at a press conference after assuming duties yesterday.

He emphasised that the immediate task of the Finance Ministry is to revive the country’s economy and to restore the trust in the economy with an ambition of creating a people-centric economy. 

Moreover, Cabraal stressed that formation of clear-cut policies and prompt implementation of them is also crucial for the country to overcome from the COVID-19 pandemic-infused economic slowdown.  

In this regard, he pointed out that the National Policy Framework ‘Vistas of Prosperity and Splendour’ of President Gotabaya Rajapaksa has laid a clear foundation for the government’s policy framework. 

He noted that the Ministry of Finance in particular has a crucial balancing act in achieving different objectives under the government’s policy framework, which ranges from achieving high economic growth to reducing regional income disparity to reducing budget deficit to maintaining competitive market interest rates to supporting domestic producers.

“We are ready for the balancing act to achieve desired economic outcomes,” he stressed. 

Meanwhile, the State minister asserted that country’s capital markets requires a policy that supports attracting foreign funds into the country, which is crucial for national development. 

He added that various forms of capital as well as debt including equity capital, seed capital, short and long term loan facilities need to be further develop the country’s businesses and industries. 

In addition, he highlighted that increasing foreign holdings in government securities would be a key task to be achieved. 

He noted that foreign holdings in Treasury bills and bonds have come down to US$ 200 million currently from US$ 3.4 billion at the end of 2014. 

He also pledged to strengthen the country’s financial institutions while reviving certain financial institutions that have almost turned out to be failed institutions. 

Furthermore, Cabraal also outlined that Sri Lanka needs a strategy to attract international business giants to key projects such as Colombo Port City. 

Cabraal has been tasked with facilitating the setting-up of main offices of international business giants in the country’s capital city and the yet to be completed Colombo Port City.  The State Minister also expressed support towards policies and strategies, which aim to protect and empower domestic industrialists and entrepreneurs.

Commenting on SOEs, he said the government would be taking measures to increase SOE  contributions to the economy. “Our government’s policy is not to privatise them, but to bring them back to the right track with appropriate polices,” he added. Moving forward, he expects that the State sector would adopt outcome-based management model similar to the private sector shifting away from inefficient management practices.