A Budget That Destroyed Dreams Of Middle Class
by Ifham Nizam
Prime Minister Ranil Wickremesinghe recently stressed that the island nation needs some USD eight billion to strengthen its economy.
The Premier told Parliament that Sri Lanka received between USD 600 and 700 million this year but it needs more than that to have a stable economy.
He said that the Government will look to get that USD 8 billion by expanding its trade market and will sign trade agreements with China, India, Singapore and several other countries.
The Prime Minister also said Sri Lanka will also look to the US under its new administration to sign a trade deal.
Sri Lanka is also looking to regain the GSP Plus trade concession from the European Union to help push trade between Sri Lanka and the EU.
Wickremesinghe also noted that the special economic zone in Hambantota to be setup with China will also help Sri Lanka’s economy.
The tourism industry will also see a boost through the development of Sri Lanka’s ports and airports, he said.
However, members of the Joint Opposition and parliamentarians represent ting other parties strongly believe that the country could come out of the economic mess only through clear cut polices by thinking out of the box, rather than going by old policies.
Mahinda Yapa Abeywardena-Joint Opposition
I don’t think these fellows can come out of the economic mess. They are making tariff steps by planning to privatize institutions like the Central Bank. In my opinion one of the biggest blunders is sidelining economically powerful nation, China.
This is not a positive sign for Sri Lanka because China has been a long time friend and supported the country immensely.
It is the first time in the Sri Lankan history, may be in the world, an ambassador comes hard on a Finance Minister and financial management of the country.
There were a lot of criticism to President Mahinda Rajapaksa when he initiated a number of projects. Any project takes time to yield results. Is the present government benefitting from the projects initiated by the Rajapkasa regime? Classic example is the Mattala. Now there are initiatives for Rs. 550 billion. Would anyone invest if it is not viable?
Dr. Nalin Jayatissa-JVP Parliamentarian
I am glad to hear that the good governance regime coming out with a statement on the country’s economic crisis or economic mess up. But this genuine effort won’t last…they are honest about it merely to say that the economy was on a negative trend due to the whims and policies of Rajapaksa regime. But they can’t go on saying this because in two years it is not the policies of the Rajapaksa but the government’s. There would be loads of lies in the future.
Even now they can’t come up with fresh proposals but that of 1977’s J. R. Jayewardene’s and Finance Minister Ronnie De Mel’s initiatives. For the last four decades it has been the economic agenda or the policies of the International Monetary Fund (IMF) and other relevant agencies. 1977’s open economic policy is not an answer to the economic mess. Most of the investors came here, went away leaving nothing…at times having massive loans to the banks. Government should not be bothered about bringing investments like USD 50 to USD 60 million.
JVP believes in a proper plan …to increase production locally by giving tax benefits, etc. All in all we don’t see a proper solution by the government to come out of the economic mess.
As usual there is nothing new to strengthen the country’s economy, needless to say, that there is nothing solid and the Finance Minister is following the same route his predecessor did, under a different regime.
Since independence, only leaders changed but not their ways of thinking. If Sri Lanka is a train, it got a new engine in 1977. Since then 39 Finance Ministers presented diverse budgets in this House. The Prime Minister confirmed to the House he will be continuing the third wave of changes his predecessors introduced – this Budget will be supported by those who were a part of the Rajapaksa regime. Social market economy is your aim, your third and the last wave. This is nothing but a Budget that destroyed the dreams of the middle class.
Dinesh Gunawardena-Leader, Mahajana Eksath Peramuna
The country can recover from its economic mess but will have to get away from economic mismanagement. First we should contribute to build the confidence nationally and internationally.
There should be inquiries into massive corruption. Immediate inquiry into the bond scam. Sri Lanka also has to give prominence to its Tea, Rubber, Coconut and other products which are being imported today and the huge tax exchange that has been much greater.
The Government has presented a budget similar to the previous one which doesn’t solve the burning issues of the people.
The budget has further depreciated the rupee and increased the tax burden on the people. The budget has not proposed any solutions for the foreign debt crisis. It has not given any relief to the people.
Lakshman Yapa Abeywardena-State Minister of Finance
As a result of the world economic downturn, Sri Lankan economy as well as economies of most other countries have been affected. Not only the rupee value but also the values of the Yen, Yuan, Australian Dollar, etc. have depreciated.
The government’s revenue has dropped to 12 percent of the GDP –Gross Domestic Product. This rate should be increased at least to 20 percent. Otherwise, the country will have to face difficulties. About 40 percent of government revenue is consumed by four state institutions. They are Sri Lanka Transport Board, Railway Department, Petroleum Corporation and Electricity Board. Besides, a considerable amount is spent on paying salaries and pensions of around 1.4 million state employees and 0.5 million pensioners. International Monetary Fund’s (IMF) funds are not allocated for development activities of any country. IMF funds are allocated for monetary management of a country. But the World Bank and Asian Development Bank funds are allocated for development activities.
A mechanism for economic transformation will be implemented soon aiming to strengthen the economy. Even though the SLFP is against the privatization, there is a burning need of implementing an effective and efficient management system for government institutions, which are running at a loss. SLFP is against privatization, but the management of these institutions should be streamlined so as to convert them into profit making institutions.
Kabir Hashim -Minister of Public Enterprises Development
Sri Lanka needed economic policies that moved the country forward and not ones which led to stagnation.
The country’s economic woes are ones that we inherited from the previous government. We lost many benefits during the previous regime like the GSP. Problems that could have been solved easily were allowed to aggravate and now we have to tackle them.
It was poor management of the economy by the Mahinda Rajapaksa regime that eventually forced the former President to hold an early presidential poll.
The former President knew his government was going bankrupt and the only solution was to call an election.
Jeevan Kumaratunga-A former MP and Minister
I would say there were good and bad economic moves by the government. I see the bad economic management more than the prudent measures when it comes to stabilize the economy.
Some of the bad economic moves or management has had a negative impact on the economy. Despite positive decisions taken, I see dangerous decisions would be taken in the future.
Government stopped some big projects. This resulted in income generation being trimmed.
Some of the projects are a must for a country like ours. If not further taxes on masses to cover up. No government should burden the common man.
