Colombo, August 3: In his inaugural address to the Sri Lankan parliament on Wednesday, President Ranil Wickremesinghe announced wide-ranging political and economic plans to retrieve the island nation from the depths of despair.
The President’s comprehensive plan includes the immediate formation of an all-party government, a National Assembly of all party leaders and a People’s Assembly composed of a cross-section of the citizenry, to deliberate on and advise the government on policies. The constitution will be amended to curb the President’s powers while increasing the parliament’s powers.
All this clearly stems from the prolonged agitation by the people for a total change in the system of governance. Though the “Aragalaya” movement was initially aimed at getting then-President Gotabaya Rajapaksa to quit, it had broader goals which the current President is planning to attain.
The President said that aggrieved parties and groups (called “protesters”) will be free to hold protests and assured them that they will be protected by the State. However, he made it clear that violent elements will not be tolerated.
On the economic front, the President’s plan includes reform of Public Sector Enterprises and envisages an openness to foreign investment to boost the sluggish economy.
On an All-party government, he said: “I once again request all parties representing the people in this Parliament to unite in the formation of an All-Party Government. I respectfully extend the hand of friendship to all of you. I invite you to put aside the past and come together for the sake of the country.”
The President said that he is working to establish a National Assembly (NA) consisting of political party leaders. The first task of the NA will be to arrive at a Common Minimum Program, he said. The goal of the Assembly will be to build Sri Lankan unity without animosities based on ethnic and religious differences, he added.
“Today, the majority of the youth chant slogans against racism and bigotry. Protests are being carried out mentioning the necessity of peace among ethnic groups of Sinhala – Tamil – Muslim – Burgher etc. Sinhalese youths say that all the ethnic groups including Tamils and Muslims should be treated equally,” he said.
On forming a People’s Assembly, the President said: “A comprehensive series of political reforms are required to implement all these functions. I will carry out those reforms during my tenure. However, not based on my own opinion, but with the consent of the Parliament based on the views of the youth, women and other people. I am taking measures to establish a People’s Assembly in order to decide which social and political reforms should be implemented.”
“A mechanism to obtain views of all interested parties is being prepared through the People’s Assembly through the consultation of political parties, various organizations etc. I especially invite the youth engaged in activism and youth who are not to provide their views.”
“The responsibility of preparing a National Plan for social, economic and political reforms is assigned to the People’s Assembly, by taking the opinions and advice of all stakeholders and acting with full transparency. The People’s Assembly is a fully independent body with the Government only providing the necessary resources. The Government has no influence on its functions or decisions. We decide in consultation with various parties, regarding the composition of the People’s Assembly.”
On the economic situation, the President said: “We have now minimized power cuts; we are in the process of bringing the fertilizer required for cultivation. There is no shortage of gas, and soon everyone would be able to obtain it without queuing. Safety measures have been taken to avoid food shortages. Bringing essential drugs and medical equipment to the hospitals has been initiated. Schools have been re-opened. Measures are being taken to overcome the impediments faced by the industries and export sectors.”
India’s Help Acknowledged
Turning to India’s economic help when Sri Lanka was down and out, the President said: “I wish to specially mention the assistance provided by India, our closest neighbour, in our efforts to economic revitalization. The Government of India under the leadership of Prime Minister Narendra Modi has given us a breath of life. On behalf of my people and that of my own, I convey our gratitude to Prime Minister Modi, the Government, and the people of India.”
It is time that we initiated a system for fuel importation from our own export income and foreign remittances. We also have to limit selected imports in order to balance the payments for fuel. On the other hand, the fuel supply has to be curtailed. These hardships would need to be borne until the end of this year,” Wickremesinghe warned.
Problem of Debt
On the problem of foreign debt, he said: “As a preliminary step, we initiated negotiations with the International Monetary Fund (IMF) on a four-year program. We would continue those discussions from this month. It is our expectation to conclude the staff level negotiations expeditiously and successfully.”
“The finalization of the debt restructuring plan has commenced in collaboration with Lazard and Clifford Chance, who are international financial and legal experts. We would submit this plan to the International Monetary Fund in the near future, and negotiate with the countries that provided loan assistance. Subsequently, negotiations with private creditors would also begin to arrive at a consensus.”
“We are also looking at formulating necessary policies, rules and regulations, and programs, to strengthen the export economy. Our economic legacy is based on foreign trade,” he said.
On growing income disparities, the President said: “As a result of the economic crisis we are facing today, the income disparity in society is widening. The middle class is shrinking. On the other hand, businesses and industries are facing serious challenges, exacerbated by the loss of employment.”
“The amount of remittances sent by migrant workers to Sri Lanka has dropped, for several reasons. With the COVID epidemic, much employment was terminated, and people’s travel abroad for jobs became limited. Due to the artificial control of the rupee, it became more advantageous to transfer money to Sri Lanka through other means. Presently, this situation is gradually changing, and we are taking measures to encourage remittances to Sri Lanka through the banking system. Tourists mostly come in the month of August. Necessary initiatives are being taken to attract more tourists to Sri Lanka.”
State Enterprises Reform
State Enterprises need to be reformed, the President said. “ Four or five decades ago, there was an economic concept of state enterprise. However, it is now widely accepted that this concept is ineffective. Even former socialist countries now encourage private enterprises. If our country continues to nurture state-owned loss-making enterprises the country will take a further downturn. Therefore, we have to make policy decisions on getting rid of such enterprises.”
Less Loans, More Investment
Stressing the need for taking less loans and getting more investments, Wickremesinghe said: “A country cannot be sustained by taking loans, and therefore should reduce the borrowings to the extent possible. Therefore, I am joining with you Hon. MPs in compiling rules and regulations and policies that will allow our country to get the maximum benefit from the Indian Ocean-centric new economic power.”
Shedding Needless Opposition
Calling upon parties to shed needless opposition to foreign investment, the President said: “The enormous loss caused to our country due to the opposition to foreign investments because of hearsay, without checking, cannot be qualified. However, people are aware of the losses caused to the country due to corruption and fraud.
He then mentioned a few examples: “When we tried to develop the oil tank complex in Trincomalee together with India, it was stated that Sri Lanka would be a sell-out of to India and this development project was halted. If at that time we were allowed to develop the oil tank complex, today people would not have to spend many days in queues for fuel.””
Even when the ‘Suvasarya’ ambulance service was initiated, a similar objection was raised. Some doctors held press conferences stating that ‘if the patient comes to the hospital by the ‘Suvasariya’ ambulance service, deaths will occur. However, we somehow initiated the ‘Suvasariya’ service and thereby thousands of lives have been saved.”
“When Japan offered to establish the Light Rail Transit (LRT) and develop the Container Terminal in the port, it was opposed by giving a number of baseless reasons. Therefore, our country lost more than 03 billion dollars in investments. Regrettably, the traditional friendship between Japan and Sri Lanka has been adversely affected.”
The President said that a National Economic Policy for the next 25 years is being planned. “It lays the foundation for a social market economic system, securing development for the poor and underprivileged groups and encouraging small and medium entrepreneurs. Our aim is to create a surplus in the primary budget by the year 2025. Our effort is to raise the economic growth rate to a stable stage, in order to establish a solid economic foundation by the year 2026. Currently, public debt is 140 percent of Gross Domestic Product (GDP). Our plan is to bring this down to less than 100% by the year 2032.”
“If we build the country, the nation and the economy through the national economic policy, we would be able to become a fully developed country by the year 2048, when we celebrate the 100th anniversary of independence.”