Ravi K reassures P’ment on economy

Thursday, 28 January 2016 00:57 - - {{hitsCtrl.values.hits}}

Oil price stabilisation account to be established next week
Six former investors to return to Sri Lanka to start business
Davos visit a major success with 63 meetings
Govt. settles Rs.128 billion worth of pending local payments out of Rs. 258 b

By Ashwin Hemmathagama – Our Lobby Correspondent

Minister of Finance Ravi Karunanayake assured Parliament yesterday that leading the country to a safe but steady path is among the key priorities of the current Government.

Moving an Order under the Customs Ordinance, six Orders under the Special Commodity Levy Act, and a resolution under the Inland Revenue Act, Karunanayake explained the recent actions of the Government to settle pending payments for local parties for services rendered for several years during the Rajapaksa regime.

“When we took the over the Government a balance of non-paid moneys amounted to Rs.258 billion. We have already settled Rs.128 billion. These were the payments mostly due for the local constructions and the road development projects. We have shouldered your burden without borrowing money. We have reduced debt,” Minister Karunanayake said.

However, he said, global turmoil of diverse natures has adversely affected the Sri Lankan economy, which would force import substitution. “Import substitution will be given prominence in the days to come. Benefits will be offered for local productions. We would expect your suggestions to identify local industries suitable to receive these benefits,” he said.

“We have a vision for Sri Lanka. We will drive the nation down a safe path despite the global issues. We never expected the Chinese economy to crash. The devaluing of Chinese currency and the concerns in India has created ripple effects for Sri Lanka. IMF supports us to manage our economy the way we want. We no longer request loans but investments. We are expecting to bring these investments to all corners of our country,” added Minister Karunanayake.

Highlighting pitfalls of the past the Minister said: “The Ministry of Defence construction in Akuregoda would exceed the estimate of Rs.58 billion. Contractors are in darkness.”

Focusing on last week’s successful visit to World Economic Forum in Davos, Switzerland Karunanayake said: We had 63 successful investor meetings in Davos and convinced many investors to come here. Six companies who left Sri Lanka in 2005 have agreed to come back.”

The Finance Minister also touched on fiscal challenges during his speech in Parliament. “ The direct tax payers’ amounts to 1.8% of the total population. We have passed the benefits of reduced oil prices before. You were unable to do any reductions. You were only capable of wasting public money on hedging gambles. We will create an oil price stabilisation account. We expect Cabinet approval next week.”

Govt. eyes $ 1 b ADB developmental boost

The Asian Development Bank(ADB) has pledged to increase financial aid for development activities in Sri Lanka.

The commitment for increased aid was made by Asian Development Bank Executive Director Won- Mok Choi during a meeting held on Tuesday with Finance Minister Ravi Karunanayake in the Parliamentary Complex and accordingly Sri Lanka is to receive $ 1 billion from the ADB for the year 2017.

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Finance Minister Ravi Karunanayake with ADB Executive Director Won-Mok Choi during their meeting in the Parliamentary Complex

The aid in the form of a soft loan will mainly be channeled for the development of highways, water supply and small and medium scale enterprises. Since 1960, the Asian Development Bank has stepped in to support various development initiatives in the country with support usually in the range of 500 to 700 million US dollars. However, taking cognisance of the favourable environment in the country for development, the ADB has decided to increase the allocation.