SL committed to achieving microeconomic and debt sustainability, Semasinghe tells int’l forum

The Sri Lankan government remains steadfast in achieving microeconomic stability and debt sustainability, Finance State Minister Shehan Semasinghe told an international forum yesterday, indicating the island nation is on track to come out of the ongoing economic crisis.

He expressed confidence that going forward, Sri Lanka expects to harness the full potential of a new economic model based on an export-oriented competitive economy, an environmentally friendly blue-green economy and a digital economy.

“We are focused on achieving higher levels of productivity through a diversified economy and taking steps to enhance the policy, legal and institutional framework to achieve these objectives,” Semasinghe said, addressing the Sustainable Development Conference hosted by the Sustainable Development Policy Institute of Pakistan in Islamabad. 

In an effort to improve Sri Lanka’s trade integration with its regional peers, the state minister shared that the relevant authorities have resumed efforts to integrate with key markets through increased competitiveness based on improved innovation, quality and sustainability.   While listing out the measures taken by the government so far to fulfil the twin objective of moving towards economic revival while realising the Sustainable Development Goals (SDGs), Semasinghe expressed confidence in the country being on track to deliver on both agendas. 

One such effort that would help the government in this regard is the operationalisation of a sustainable finance roadmap, currently underway, which would enable financing institutions to identify reinvestment opportunities and mobilise financing for climate action and sustainable development, he pointed out.

“Innovative mechanisms become imperative to synergise the government, private sector and capital markets to generate the additional resources needed to finance SDGs with the support of our international development partners.

“We are exploring innovative and alternative financing tools to attract new levels of financing flows towards the environment, social and governance sectors,” Semasinghe said.  Having defaulted on its foreign debt in May, Sri Lanka is currently in discussion with its official creditors to restructure its foreign debt. Sri Lanka’s foreign debt currently stands close to US $ 50 billion. Sri Lanka in early September entered into a staff-level agreement with the International Monetary Fund (IMF) for a US $ 2.9 billion bailout package. However, the activation of the IMF facility is contingent on Sri Lanka securing financing assurances from its creditors to make the country’s debt sustainable.