Bandula says only prudent economic reforms can tackle crisis, not political slogans

• Cabinet approval for joint measures by Finance, Trade, Commerce, and Food Security Ministries to assure importation of essential items
• Claims Sri Lanka failed to secure one-tenth of FDIs attracted by neighbouring economies
• Asserts country has not only chased away foreign investors but also local entrepreneurs to invest in other countries
• Justifies decision to increase Govt.’s debt ceiling for 2023
• Reveals 37% of Sri Lanka’s foreign debt will mature within next 5 years, while 51% of total foreign debt matures in six to 20 years and balance 12% after 20 years
• Says Sri Lanka’s debt repayment duration extends to 2048, a century post-independence

Cabinet Co-Spokesman and Minister Bandula Gunawardena

By Charumini de Silva

Cabinet Co-Spokesman and Minister Bandula Gunawardena yesterday said the country can only overcome the dreadful situation through a prudent economic reform program, insisting that there is no political solution.

Speaking at the post-Cabinet meeting media briefing yesterday, he stressed the need to adopt strategic policies and measures to ensure sustainable growth, emphasising that mere political slogans would not suffice.

“During the Cabinet meeting President also emphasised that manufacturing economy was the best solution to overcome the over dependency on imported goods, amidst foreign exchange,” Gunawardena added.

Accordingly, the Cabinet of Ministers approved joint measures by the Finance Ministry and the Trade, Commerce, and Food Security Ministry to assure the importation of essential items. “The focus on importation of essential items aims to address the challenges posed by the ongoing foreign exchange crisis,” Gunawardena added.

He also highlighted the significance of developing a robust manufacturing economy as a solution to reduce the over-dependency on imported goods. 

Minister Gunawardena acknowledged that striking a balance between safeguarding local farmers, producers and attracting foreign investors has been a complex challenge for successive governments. 

“We as a country have failed to secure one-tenth of the FDIs that India, Singapore, Malaysia or Vietnam has been able to attract. Over the years Sri Lanka has become a country that not only chases away foreign investors but also local entrepreneurs to invest in other countries,” he claimed.

Gunawardena also justified the recent decision to extend the debt ceiling, stating that operating without increasing the debt limit would be impractical, given the current circumstances where the Government is unable to borrow or print money. 

Appropriation Bill for 2023 initially granted the Government a debt ceiling of Rs. 4,979 billion and it was amended on 20 July to increase it to Rs. 13,979 billion.

“The extension of the debt ceiling is seen as a necessary measure to manage the country’s financial commitments effectively. If anyone has better suggestions to operate without increasing the debt limit, the Government is all ears,” he added.

Acknowledging the challenging path ahead, Gunawardena revealed that Sri Lanka’s debt repayment period extends to 2048 – a century after the country’s independence. “Around 37% of Sri Lanka’s foreign debt will mature within the next five years, while 51% of the total foreign debt matures in six to 20 years and the remaining 12% matures after 20 years. Regardless of parties and affiliations, the Government in power is legally bound to settle foreign debts at maturity till the year 2048,” he explained.