IMF surveys Sri Lankans on country’s future

The International Monetary Fund (IMF), which completed a US$2.5 billion loan to Sri Lanka in mid-2012, has launched a survey seeking the views of Sri Lankans on various issues relating to economy and economic fundamentals.

Among the questions being asked are: “Is Sri Lanka heading in the right or wrong direction (or are you not sure)?” Another question was “Is Sri Lanka’s economic fundamentals in the right, wrong or (are you not sure) direction?” Titled “IMF Country Survey 2013 – Sri Lanka”, the survey/questionnaire has been sent to various people listed as ‘opinion leaders’ and asked to respond to several questions listed. The IMF says it’s interested in gauging the views of clients and partners who are either involved in the development of Sri Lanka or “who observe activities related to social and economic development”. It said the survey was meant to give the fund team in Sri Lanka a greater insight into how the IMF’s work is perceived. “With this understanding, the IMF hopes to develop more strategies, outreach and programs that support development in Sri Lanka,” it said.

Questions also deal with the attitudes towards the IMF, its effectiveness, future role of the fund in Sri Lanka, etc.

The survey is based on the IMF’s programme which began in June 2009 to provide a Standby Arrangement (SBA) for balance of payments support. At the end of a visiting fund mission in an ‘Article IV consultation’ with the Government, the IMF noted that the government still needs to implement significant reforms such as improving tax administration, reducing losses at state-owned enterprises, and promoting exports to strengthen revenue streams. This was one of the reasons why the fund turned down a request from Sri Lanka’s Finance Ministry for $1 billion in budgetary support.

Sri Lanka’s economy is grappling with high foreign reserves, totalling some $8 billon according to Central Bank figures, which economists say is inflated as it’s based on borrowed cash. Earlier this week, the Standard Chartered Bank (SCB) in an ‘Asian focus on economies’ analysis said issues remain in Sri Lanka though the economy is seen growing slightly faster than 2012.

It said the need for more fiscal consolidation, rising inflation and slow progress in exports of the country’s main trading partners was slowing the expected recovery. Tax revenue collection, it said, was among the lowest (percentages as per GDP) in Asia.