Saturday Jan 11, 2025
Saturday Jan 11, 2025
Wednesday, 2 January 2019 00:00 - - {{hitsCtrl.values.hits}}
By Nuwan Senarathna
Sri Lanka Podujana Peramuna (SLPP) yesterday called on the Government to implement dynamic economic policies in 2019 to better manage economic challenges of high debt repayment and attract investment to develop the economy.
“This is a very bleak situation for the economy, especially since there were no coherent policies for the last three and a half years. My simple argument is that they cannot run the country. That is evident. But given the high debt repayments and other challenges, we hope the Government can do a better job than they have done so far,” MP Anura Priyadharshana Yapa told reporters at SLPP headquarters.
Yapa pointed out that the lack of policy consistency of this Government has been the reason for the current economy situation.
He noted economic policies should have been implemented to promote local industries to attain development goals so that they could increase exports and attract investment.
According to Yapa, tax policies introduced by the Government had failed to reach their targets. He claimed government policies had created a negative environment for investment by pressurising businesses to reduce their production to avoid unnecessary expenses generated by tax policies.
“Even though the Government increased taxes in 2017, they were unable to earn sufficiently higher revenue that justified the changes they made,” Yapa added.
Yapa pointed out in order to avoid negative affects generated by policy inconsistency, the Government should follow a dynamic economic approach. Yapa charged the United National Party (UNP) had not shown any interest in supporting local businesses, reduce imports through import substitution efforts and attract investment.
He also spoke about the currency depreciation which Sri Lanka experienced throughout 2018. Yapa pointed out that the lack of export diversification has been the biggest reason for the depreciation of the rupee.
According to Yapa, most of the issues with regard to the Sri Lankan economy has been the lack of export income generation compared to import expenses throughout the country’s history.
“In a situation like this, the rupee will inevitably fall because there is excess demand for dollars than what the economy can support.”
In order to face economic challenges arising due to lack of export earnings, Yapa called for the Government to implement projects to encourage small and medium scale industries.
“Small and medium scale industries will boost the economy in many ways. They will increase the Gross Domestic Production (GDP) and export earnings which will ease the pressure on balance of trade.”
He also emphasized the Government needs to implement policies to promote tourism in Sri Lanka as a foreign exchange generating method.
Yapa pointed out tourism would be one of the best options to face current economic challenges.
Yapa also said the Government should follow methods to reduce imports which reduce negative effects of the balance of trade.
“We have to be cautious when reducing imports to the country. We have to do that without hurting people,” he added.
He also raised concerns over debt repayments this year. He noted that if the Government failed to follow sustainable approaches, the country may be caught in a debt trap.
“This year the Government will have to get more dollar loans to redeem existing loans and pay the debt which could lead us to a debt trap,” he added. Yapa noted that Government has policies to repay debt while achieving development goals.
