Sri Lanka will stage an economic and industrial revival : Bandula Gunawardena

Daily Mirror spoke to Higher Education, Media,  Technology and Innovation Minister Bandula Gunawardena on the economy  and how the country would be affected by the COVID-19 pandemic.

Q Sri Lanka has never defaulted her debt service  commitments up to now. But UNP leader Ranil Wickremesinghe says that it  is impossible for the government to raise US$ 3 billion for 2020 (Rs.550  billion approximately) in the midst of the economic crisis brought  about by the COVID-19 pandemic. He further says that in October alone,  we have to pay US$ one billion (Rs. 180 billion). How is the government going to address this major challenge?
The economic woes we are facing today are a making of the  Yahapalana government itself and Ranil Wickremesinghe must take the full  responsibility for the disaster as the Prime Minister as well as the  Minister of National Policies and Economic Affairs of the Yahapalana  government.   

The Yahapalana economic policy was very simple, which was  to import ‘everything possible’. With this disastrous and un-pragmatic  and anti national policies, Sri Lanka’s agricultural and industrial  sectors got a heavy beating. They issued import permits not only for  spices, fruits, vegetables, cashew, peanuts and all food commodities  even for candles, joss sticks, kites and Vesak lanterns and  demonstrated how an economy could be destroyed in a few years.   

Yes, our debt service commitment in 2020 is US$ 4.5  billion. President Gotabaya Rajapaksa has held several rounds of talks  with the Central Bank on the modalities of repayment and also has spoken  to our friendly countries and global financial agencies with the aim of  obtaining a moratorium.   

I am confident that top financial agencies like the World  Bank, the IMF, ADB and our friends like China, Japan, India, Korea, the  US, and the EU will no doubt rethink about Sri Lanka’s difficulties in  debt repayment amidst the disastrous global situation brought about by  the COVID-19 pandemic.   

The plus factor about Sri Lanka is that we have never  defaulted and also are determined to meet our debt servicing obligations  on time.   

Q Other challenge that needs immediate attention of the  government is the low GDP growth this year at 1.5%, reduced from the  early 2020 forecast of 2.2%. Your comments?
The low GDP growth is common to all the countries, small,  big and powerful in the aftermath of COVID-19. However, my belief is  that if Sri Lanka was able to maintain a healthy GDP growth in the past  few years like other countries in the region, we would have easily  absorbed the after shocks of the COVID-19 pandemic.   

While our neighbour India recorded a satisfactory 4.23% and  6.12% GDP growth in 2018 and 2019 respectively, Bangladesh achieved an  excellent 7.9% and 8.2% growth rate in 2018 and 2019 respectively.  Vietnam’s growth rate was also highly impressive with a 7.1% growth rate  in 2018 and 7% GDP growth in 2019.   

What was the situation in Sri Lanka with so called top  democrats, technocrats, strategists and economic pundits in power? In  2018, Sri Lanka’s GDP growth was a hopeless 3.5% and in 2019 it was down  to a precarious 1.6%. 

Q The industrial sector, tourism, Small and Medium  Enterprises, rural and domestic industries are the most affected from  the COVID-19 pandemic. How does the government expect to revive these  vital segments of the economy in a shortest possible period of time?
With the COVID-19 pandemic, most of the economic  fundamentals have been proved ineffective or outdated. Sri Lanka needs  to initiate a new ‘National Economic Resurgence’ based on human  resources. The concept of globalisation has collapsed as it brings no  solution to the current problems. Countries in the new world must go  forward with a nationalistic approach which India, has already adopted.     

For instance, Sri Lanka’s graphite is of very high quality.  But we export graphite as raw material and earn a small amount of  foreign exchange. What we must do is to make a new graphite based  product with value addition and give it a Sri Lankan brand and export it  to the global market as a product exclusively available only in Sri  Lanka.   
We need new ideas, inventions, research and attempts to  test the skills, abilities and creative capabilities of our people to  venture into new horizons of economic, industrial and scientific  progress. I believe that COVID-19 has created an enthusiasm among our  people at large and among the youth in particular. The government is  ready to provide all possible assistance to those who are bold enough to  try their luck in inventions and as the Minister of Higher Education, I  am personally taking a special interest to motivate and help our youth.    

Q The largest contributions to Sri Lanka’s foreign  reserves come from remittances from the expatriate Sri Lankan community,  garment and apparel exports, fish exports and the exports of tea and  rubber. At a time all export revenue has dropped to a trickle, what  incentives could the government offer to rekindle these sectors?
I believe that we must explore avenues to promote new  frontiers in tourism, train Sri Lankan youths in new professions, skills  and vocations and depart from the practice of sending Sri Lankans as  domestic helpers and unskilled labour.   

   Our youths can be trained as skilled labour in tourism,  surveying, as elderly care providers, nursing, Physiotherapy and in many  other vocations for which there is a big demand in the global job  market.   
On my part, as the Minister of Higher Education,  Technology and Innovation, I have taken steps to introduce technology as  a subject for the GCE O/L and followed up with an university degree  course in technology, 
given a science lab to each and every junior and  higher grade school, established a space technology centre etc.   
Sri Lanka has vast opportunities for educational, medical  and religious tourism which countries like India, Indonesia, Thailand  and Malaysia have already exploited. With the good name we have earned  among the global community for the successful controlling of COVID-19,  Sri Lanka can be promoted as a destination for medical, educational and  religious tourism. I believe that if we put a prudent, results oriented  and timely tourist promotion strategy, we would be in a position to  revive the tourist industry as early as the Christmas and New Year  vacation 2020 / 2021.   

Q Will there be a policy change or re-regulation of main  tools the Central Bank uses to raise foreign and domestic loans like  Treasury Bills, Treasury Bonds, Treasury Notes, Sovereign Bonds and  Development Bonds etc.?
The Yahapalana government increased all taxes and in fact  it was a tax hunt giving much pain to all tax payers. Instead, we have  taken measures to improve non tax income. For instance, the Sri Lanka  Railways (SLR) has vast swathes of lands under it but which are  under-utilised and unexploited. Some of them are highly valuable prime  lands. The government must set up a Land Management Authority for the  purpose of the use and management of these state lands for commercial  purposes and thereby increase state revenue.   

Q The government has done a good job in controlling the  COVID-19 pandemic in Sri Lanka in comparison to other countries in the  region. Do you think our national immunisation programme played a role  in the success of our fight against this viral infection?
Yes, indeed. With the commencement of the Expanded  Programme on Immunisation (EPI) Programme in 1978, focus was to control  childhood T.B., tetanus, whooping cough, diphtheria, polio and neo-natal  tetanus. In 1988, the focus shifted to disease elimination. In 1991, a  fifth dose of OPV was introduced at school entry to facilitate the polio  eradication process. Rubella, Hepatitis B and Hib containing  Pentavalent vaccines introduced to the programme gradually over the  years.   

Q How does the government plan to obtain support from the rich and friendly countries and global financial institutions?   
The government has already spoken to SARRC member countries  and mainly to India on how our economic and industrial revival could be  achieved in the aftermath of COVID-19 pandemic. I believe that Sri  Lanka also must establish a development bank with start up capital from  China. The global community must take a fresh look at the situation  created by the pandemic and adopt a similar policy decision to that  which established the IMF and the World Bank under the Breton Woods  convention to absorb the shocks of the WWII .