Sri Lanka will stage an economic and industrial revival
: BANDULA GUNAWARDENA
Daily Mirror spoke to Higher Education, Media, Technology and Innovation Minister Bandula Gunawardena on the economy and how the country would be affected by the COVID-19 pandemic. Q Sri Lanka has never defaulted her debt service commitments up to now. But UNP leader Ranil Wickremesinghe says that it is impossible for the government to raise US$ 3 billion for 2020 (Rs.550 billion approximately) in the midst of the economic crisis brought about by the COVID-19 pandemic. He further says that in October alone, we have to pay US$ one billion (Rs. 180 billion). How is the government going to address this major challenge?
The economic woes we are facing today are a making of the Yahapalana government itself and Ranil Wickremesinghe must take the full responsibility for the disaster as the Prime Minister as well as the Minister of National Policies and Economic Affairs of the Yahapalana government.
The Yahapalana economic policy was very simple, which was to import ‘everything possible’. With this disastrous and un-pragmatic and anti national policies, Sri Lanka’s agricultural and industrial sectors got a heavy beating. They issued import permits not only for spices, fruits, vegetables, cashew, peanuts and all food commodities even for candles, joss sticks, kites and Vesak lanterns and demonstrated how an economy could be destroyed in a few years.
Yes, our debt service commitment in 2020 is US$ 4.5 billion. President Gotabaya Rajapaksa has held several rounds of talks with the Central Bank on the modalities of repayment and also has spoken to our friendly countries and global financial agencies with the aim of obtaining a moratorium.
I am confident that top financial agencies like the World Bank, the IMF, ADB and our friends like China, Japan, India, Korea, the US, and the EU will no doubt rethink about Sri Lanka’s difficulties in debt repayment amidst the disastrous global situation brought about by the COVID-19 pandemic.
The plus factor about Sri Lanka is that we have never defaulted and also are determined to meet our debt servicing obligations on time.
Q Other challenge that needs immediate attention of the government is the low GDP growth this year at 1.5%, reduced from the early 2020 forecast of 2.2%. Your comments?
The low GDP growth is common to all the countries, small, big and powerful in the aftermath of COVID-19. However, my belief is that if Sri Lanka was able to maintain a healthy GDP growth in the past few years like other countries in the region, we would have easily absorbed the after shocks of the COVID-19 pandemic.
While our neighbour India recorded a satisfactory 4.23% and 6.12% GDP growth in 2018 and 2019 respectively, Bangladesh achieved an excellent 7.9% and 8.2% growth rate in 2018 and 2019 respectively. Vietnam’s growth rate was also highly impressive with a 7.1% growth rate in 2018 and 7% GDP growth in 2019.
What was the situation in Sri Lanka with so called top democrats, technocrats, strategists and economic pundits in power? In 2018, Sri Lanka’s GDP growth was a hopeless 3.5% and in 2019 it was down to a precarious 1.6%.
Q The industrial sector, tourism, Small and Medium Enterprises, rural and domestic industries are the most affected from the COVID19 pandemic. How does the government expect to revive these vital segments of the economy in a shortest possible period of time?
With the COVID-19 pandemic, most of the economic fundamentals have been proved ineffective or outdated. Sri Lanka needs to initiate a new ‘National Economic Resurgence’ based on human resources. The concept of globalisation has collapsed as it brings no solution to the current problems. Countries in the new world must go forward with a nationalistic approach which India, has already adopted.
For instance, Sri Lanka’s graphite is of very high quality. But we export graphite as raw material and earn a small amount of foreign exchange. What we must do is to make a new graphite based product with value addition and give it a Sri Lankan brand and export it to the global market as a product exclusively available only in Sri Lanka.
We need new ideas, inventions, research and attempts to test the skills, abilities and creative capabilities of our people to venture into new horizons of economic, industrial and scientific progress. I believe that COVID-19 has created an enthusiasm among our people at large and among the youth in particular. The government is ready to provide all possible assistance to those who are bold enough to try their luck in inventions and as the Minister of Higher Education, I am personally taking a special interest to motivate and help our youth.
Q The largest contributions to Sri Lanka’s foreign reserves come from remittances from the expatriate Sri Lankan community, garment and apparel exports, fish exports and the exports of tea and rubber. At a time all export revenue has dropped to a trickle, what incentives could the government offer to rekindle these sectors?
I believe that we must explore avenues to promote new frontiers in tourism, train Sri Lankan youths in new professions, skills and vocations and depart from the practice of sending Sri Lankans as domestic helpers and unskilled labour.
Our youths can be trained as skilled labour in tourism, surveying, as elderly care providers, nursing, Physiotherapy and in many other vocations for which there is a big demand in the global job market.
On my part, as the Minister of Higher Education, Technology and Innovation, I have taken steps to introduce technology as a subject for the GCE O/L and followed up with an university degree course in technology, given a science lab to each and every junior and higher grade school, established a space technology centre etc.
Sri Lanka has vast opportunities for educational, medical and religious tourism which countries like India, Indonesia, Thailand and Malaysia have already exploited. With the good name we have earned among the global community for the successful controlling of COVID-19, Sri Lanka can be promoted as a destination for medical, educational and religious tourism. I believe that if we put a prudent, results oriented and timely tourist promotion strategy, we would be in a position to revive the tourist industry as early as the Christmas and New Year vacation 2020 / 2021.
Q Will there be a policy change or re-regulation of main tools the Central Bank uses to raise foreign and domestic loans like Treasury Bills, Treasury Bonds, Treasury Notes, Sovereign Bonds and Development Bonds etc.?
The Yahapalana government increased all taxes and in fact it was a tax hunt giving much pain to all tax payers. Instead, we have taken measures to improve non tax income. For instance, the Sri Lanka Railways (SLR) has vast swathes of lands under it but which are under-utilised and unexploited. Some of them are highly valuable prime lands. The government must set up a Land Management Authority for the purpose of the use and management of these state lands for commercial purposes and thereby increase state revenue.
Q The government has done a good job in controlling the COVID-19 pandemic in Sri Lanka in comparison to other countries in the region. Do you think our national immunisation programme played a role in the success of our fight against this viral infection?
Yes, indeed. With the commencement of the Expanded Programme on Immunisation (EPI) Programme in 1978, focus was to control childhood T.B., tetanus, whooping cough, diphtheria, polio and neo-natal tetanus. In 1988, the focus shifted to disease elimination. In 1991, a fifth dose of OPV was introduced at school entry to facilitate the polio eradication process. Rubella, Hepatitis B and Hib containing Pentavalent vaccines introduced to the programme gradually over the years.
Q How does the government plan to obtain support from the rich and friendly countries and global financial institutions?
The government has already spoken to SARRC member countries and mainly to India on how our economic and industrial revival could be achieved in the aftermath of COVID-19 pandemic. I believe that Sri Lanka also must establish a development bank with start up capital from China. The global community must take a fresh look at the situation created by the pandemic and adopt a similar policy decision to that which established the IMF and the World Bank under the Breton Woods convention to absorb the shocks of the WWII .