President Ranil Wickremesinghe, speaking of the reforms he plans to introduce for the revival of the economy, stated that the government is looking at raising income taxes and widening the tax net by taxation of capital and wealth in order to bring in some of the lost revenue.
In an interview with The Economist on Tuesday (Aug 16), the Head of Stated also said several state-owned enterprises such as the national carrier SriLankan Airlines, Sri Lanka Insurance, the petroleum corporation and the government’s stake in the national telecoms firm may be privatized. “We are looking now at disposing of some state assets, which will give us about USD 2-3 billion.”
When asked about the immediate laws he intends to bring in, President Wickremesinghe said a bankruptcy law modelled on the U.S. Chapter 11 is one of the most immediate. “The rest are about economic stability. We’ve also got some additional powers for the next year and a half to tackle the situation.”
President Wickremesinghe, stating that a public-finance bill is required on the new taxes and on state-owned enterprises as well, said he wants to do a “deep cut” and make a legislative framework for a highly competitive export-oriented economy, and then ensure the recovery takes off by 2024. It is not worth dragging this out, he pointed out.
When asked what he means by deep cut, he said, “When you make changes, make it deep, make all the changes you have to make.” President Wickremesinghe is hopeful that this will allow Sri Lanka’s economy to not just recover but to become more competitive and export-oriented.
He remarked that he is not worried about the hostility shown by trade unions with regard to the restructuring of state-owned enterprises, explaining that “what matters is people.”
The Head of State also stated that he wants Sri Lanka to become more economically integrated with the rest of Asia. “We will look at closer relations with ASEAN (Association of South-East Asian Nations) and RCEP (Regional Comprehensive Economic Partnership).”
Speaking of the agreement with the International Monetary Fund (IMF), he said, “If we can get the board agreement, then we can get at some of the other organisations’ advance and get us some money until the tranche comes through.”
He explained that this would inspire investor confidence.
With regard to a question raised on the recent row over the docking of Chinese ballistic missile and satellite tracking vessel Yuan Wang 5 at the Hambantota Port and the Chinese-built Pakistani warship PNS Taimur which recently reached Colombo for a formal visit, President Wickremesinghe said the pressure is building up on the European side.
He is worried the Indian Ocean will be affected by the rivalry between the United States and China and Russia. “Sri Lanka, of course, has a special relationship with India where we have to look after each other’s interests. But most countries in the Indian Ocean want to stay out of the power rivalry. So, we have to be clear about that and say what our policies are,” he continued.
