Sri Lanka set for progress after years of conflict and political instability: Mangala

Sri Lanka, under the Unity Government headed by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, is poised for economy progress after long years of conflict and political instability, the country’s Finance Minister told the World Bank.

Minister of Finance and Mass Media Mangala Samaraweera expressed these views to the Vice President of the World Bank, Annette Dixon, during their meeting in Washington on the sidelines of the World Bank/IMF Annual Conference.

Dixon has been in her current position since December 2014, managing the World Bank’s engagement in South Asia to end extreme poverty and boost shared prosperity. She is also mandated to lead relations with eight countries including India, the institution’s biggest client. She oversees lending operations and trust-funded projects worth more than $ 10 billion.

Samaraweera said that the Sri Lankan Government has been addressing key democratisation issues, with democratic institutions maintaining checks and balances which are becoming deeply-rooted.

“We are celebrating 70 years of parliamentary democracy in Sri Lanka this year and the economy will be revitalised on the strong pillars of reconciliation and democracy with far-reaching reforms,” the Minister emphasised.

The Minister also briefed Dixon on Sri Lanka’s current political and economic dynamics. The Government’s policy plan for the next eight years, titled ‘V2025 - A Country Enriched’, was announced recently. It envisages economic prosperity for all Sri Lankans based on the principles of a social market economy. Furthermore, Samaraweera said that his maiden Budget proposals for 2018 would be presented in Parliament on 9 November.

 Sri Lanka intends to strengthen the policies suitable for a higher middle income, export-oriented economy. In order to achieve this target, the Finance Ministry has been convening high-level meetings with public and private sector stakeholders while gathering innovative ideas from diverse partners in order to broaden this scope.

The Minister, conveying his stance on reforms, said that the Government endeavours to undertake a comprehensive reforms agenda in the legal system. The new Inland Revenue Act was introduced last month.

“Currently we are evaluating the Customs Ordinance of 1869, as well the Excise Ordinance of 1912. Also, extensive reforms are needed in our labour laws, housing and land laws,” said Samaraweera.

Sri Lanka graduated from International Development Association (IDA) eligibility to International Bank for Reconstruction and Development (IBRD) eligibility in July 2017. The Minister conveyed his appreciation of the World Bank’s transitional support to face the interim period without an adverse impact on the economy. 

Under the Competitiveness Development Policy Loan, the World Bank provided $ 100 million to Sri Lanka in 2016. The money was utilised for policy and institutional reforms. The eight priority reform areas achieved progress, including the enactment of the Right to Information Act. Action is underway on the National Audit Bill and the introduction of the Debt Management Unit (DMU). 

In conclusion, Finance Minister Samaraweera informed the World Bank Vice President that comprehensive public sector reform agenda was underway to improve the performance of state-owned enterprises (SOEs) for better financial discipline, transparency and accountability. 

The Government prefers to dispose of nonstrategic and underutilised State assets, including SOEs.

Dixon said that several options have been tabled following a prime ministerial level meeting in March 2017. Both the Sri Lankan Government and the World Bank should work together to devise a comprehensive plan for the betterment of the Sri Lankan economy. 

A World Bank project on the environment is being implemented in the Kelaniya river basin. $ 152 million has been allocated for 2017 and the balance $ 100 million will be disbursed in 2018.