If Sri Lanka continues to rely on borrowing to address the imbalance between imports and exports, the nation will inevitably confront another economic crisis within a decade, says President Ranil Wickremesinghe.

He also underscored his vision to establish economic stability and expedite the transformation of Sri Lanka into an export-oriented economy.

The President said that a new law is planned to be introduced to parliament in April, alongside another legislation aimed at improving financial governance within the government. These measures are designed to propel the nation’s economy forward.

Wickremesinghe made these remarks during his attendance at the inauguration ceremony of Bodhigara and Golden Fence, constructed near the historic Mangedara Tempita Viharaya in Kegalle today (March 20).

The President also noted that negotiations concerning certifying Sri Lanka as a debt-paying country are anticipated to conclude by June and July. He further emphasized that the foreign aid lost due to the country being labelled as bankrupt will be retrieved and returned to the nation.

Additionally, the President highlighted that the country’s economy will receive a boost as the national currency strengthens with the renewed engagement of foreign banks and companies that had previously refrained from conducting business with Sri Lanka.

Reflecting on how all citizens were impacted during the previous economic crisis, the President also stressed that the benefits of the growing economy are meant for everyone, not just a select few.

The President, who visited the historic Mangedara Tempita Viharaya in Kegalle, unveiled a commemorative plaque, inaugurating the new Bodhigara and golden fence, and offered flowers at the Bodhiya.

This new Bodhigara and golden fence were erected following guidance from Ven. Sri Jananandabhidana Nayaka Thero, the Viharadhipathi of the Mangedara Tampita Viharaya and Chief Sanghanayaka of Kegalu Maha Disawa.

The President also granted commemorative gifts upon Jagath Sumitra Karunaratne and Mallika Karunaratne.

Addressing the gathering President Ranil Wickremesinghe further said:

We are looking forward to talking to the International Monetary Fund and wrapping up our work soon. In 2022, Sri Lanka was labelled as a bankrupt country. Because of this, international financial institutions and banks stopped providing us with support and loans. Our first priority is to lift this ban. Therefore, we need to reaffirm that we are a country that pays its debts.

Over the past year, we have played a crucial role in rescuing the country from economic troubles. If these challenges persist, we may endure another two or three years of hardship. However, as an initial step, we have now reached the final stage of the government’s program aimed at steering the country away from bankruptcy. Achieving this required numerous steps, but we’ve successfully executed them in a remarkably short timeframe.

The on-going discussions are reaching their last phase, and we anticipate wrapping them up by tomorrow. Following that, our objective is to proceed with negotiations involving the countries that have provided loans to us. This process is being overseen by France, Japan, and India, who are chairing the discussions involving all the countries that have officially lent money to us.

The local staff and the International Monetary Fund (IMF) are anticipated to reach a staff-level agreement this weekend after concluding their discussions. Concurrently, discussions with China are on-going, and discussions with private creditors are underway. The Secretary to the Ministry of Finance and the Governor of the Central Bank are scheduled to return to Europe to engage in discussions with these groups.

Following the declaration of our bankruptcy-free status, a joint meeting of the World Bank and the IMF is planned for April. Subsequently, the relevant agreement is expected to be signed shortly thereafter.

I aim to complete all these tasks by June and July, especially considering the upcoming presidential and parliamentary elections. It’s crucial to finish these activities before the elections. Once completed, we will demonstrate to the world that we are capable of repaying our debts, which will lead to the return of aid money that we haven’t received yet and an increase in the country’s dollar reserves.

Currently, many banks and companies are hesitant to engage in business with us, but once these activities are concluded, they will resume business with us. Consequently, our available funds are expected to increase.

We have passed a challenging period and had to make tough decisions to overcome this situation. However, we have now reached a point where we can offer some relief.

The rupee has been strengthening, and it’s expected to reach Rs.280 rupees by June, leading to a decrease in the prices of goods. We anticipate the rupee will continue to strengthen next year as well.

Moreover, salaries of the government employees have increased by Rs. 10,000 before the Sinhala Tamil New Year. Additionally, the “Aswasuma” program has been introduced to provide benefits three times higher than Samurdhiya to the people, with the number of beneficiary families increasing from 800, 000 to 2,400,000.

Considering these factors, the relief provided to the people as a bankrupt country is three times greater than what was provided during a stable economy. These efforts ultimately benefit the country’s economy. Additionally, the funds that were not used for decentralized budgeting over the past two years will be released, contributing to the country’s economic growth.

Looking ahead, we have opportunities for further progress after June.

Stabilizing the country’s economy alone will not solve all our problems because we are currently reliant on imports, leading to a trade imbalance where exports are lower than imports. This gap is often bridged through foreign loans, which sets us up for another economic crisis in about a decade.

To prevent such a scenario, I plan to hold discussions with the World Bank, the Asian Development Bank, and the International Monetary Fund to initiate a program aimed at swiftly transitioning the country towards an export-oriented economy. As a fundamental step, we have introduced the agricultural modernization program, which will require another 6 to 7 years to achieve success.

It is worth mentioning that the proposed law aims to foster economic stability and transition the country into an export-based economy. I plan to present this law to Parliament by April. Additionally, another law focused on financial governance within the government will be introduced, enabling us to sustain economic activities effectively.

The previous economic challenges impacted everyone in the country. Therefore, the benefits of the developing economy should not be limited to a select few but should extend to all citizens.

--PMD