Reforms key to Sri Lanka becoming major export destination: President

Published : 10:27 am  November 2, 2015 | No comments so far |  |  (630) reads | 

By Chandeepa Wettasinghe

The country’s economy will require major reforms to strengthen local industries and enter export markets, President Maithripala Sirisena said at the Sri Lanka Economic Association Annual Sessions last week.

“Just like other countries, we will require economic policy reforms to strengthen our local industries, our readiness to enter international markets by strengthening and expanding local businesses, our balance of trade and to improve our foreign earnings, reserves and the currency,” he said. He said that even though the country has great potential, it has inherited a culture of being happy with the past instead of looking towards the future and that economists should predict changes and suggest reforms to the country’s socio-cultural, political and economic environment.

“So, for the reforms and changes needed for these, we will have to accelerate development in a productive manner, without backing down or wasting time,” he added.

Sirisena went on to say that poverty is the biggest challenge the country has to its development.

“We will have to achieve a lot to eliminate poverty, become a developed country and develop an environment of happiness where we can release the prisoners filling our prisons and develop a suitably good society,” he said.

He noted that Sri Lanka has achieved more than some other countries by introducing concepts such as sustainable development, green economics, knowledge-based economics, and innovation.

“This is due to the developed knowledge of our citizens, our literacy rates our ability to absorb and adapt to situations and for being born in a beautiful and important country. We should enter the international competitive markets in a fast and cultured manner,” he said. However, reverting to protectionist political rhetoric and appealing to the rural vote ahead of the upcoming local elections, he said that many of the country’s problems are also caused by foreign influences, and that Sri Lanka should grow its own food.

“In 2014, we had imported Rs.60 billion worth of food which could have been grown here. We forget our heritage and opt for foreign things. We must only embrace technology while protecting our culture and heritage,” he added.

President Sirisena regularly incorporates Buddhist chants into his speeches. A key message of Buddhism is that change is inevitable.

Economists say such protectionist policies will go against competitive advantages and productivity-based industries required for international markets and would likely continue to trap the 30 percent of the country’s labour force in the agriculture sector which accounts for just 10 percent of the GDP.

State agencies under parliament control

State Enterprises Development Deputy Minister Eran Wickramaratne called on the government to make state agencies operationally independent and pass on their control from the Cabinet to Parliament.

“The effectiveness of regulatory institutions, structures and processes are paramount to the success of public enterprise reform. 
Currently, regulators’ operational independence and accountability is sub-optimal, with most of these entities reporting to a line minister,” he said.

He was making the comments while delivering the keynote address at the Sri Lanka Economic Association Annual Sessions.“Instead of being accountable to just ministers, in reality the regulators should come under parliamentary oversight, and I think we have seen this in other countries,” Wickramaratne said.

Providing an example of the United States, he said that the heads of the Federal Trade Commission and the Department of Justice must be approved by Congress, which also sets funding for such agencies.

“Moreover, in India, the E.U. and in the U.S., the decisions of the competition agencies are subject to judicial review,” he added.However, Wickramaratne noted that even positions outlined in the constitution are not under parliamentary control.

“Behind the SL constitution, certain officers—for example the Auditor General—their practical terms of reference and remuneration—even though they’re in the constitution—are still set by government, rather than by parliament,” he said.

The Auditor General’s Department is responsible for not only the accounts of all government departments and agencies, but also for publishing the final, audited report of the government’s budget after implementation.

The country’s budgets have continuously been focal points of ill-management and controversy. Wickramaratne stressed that these high-profile positions should be independent in carrying out their duties.

“If they are to get independence, there should be direct oversight of parliament,” he added.

In the lead up to both the Presidential and Parliamentary Elections, this year, the incumbent regime had promised to make state commissions independent.