Sunday Observer Online


Sunday, 20 September 2015





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Government Gazette

‘Country pushed into crippling debt’:

Drastic policy reforms vital

Sri Lanka is enjoying the most propitious circumstances for development, unprecedented when taking into account the past 50 years and the best use of this period could only be brought about by drastic policy reforms.

“The welfare State was no longer affordable. However, many people would refer to the welfare State as ‘the Sri Lankan way’ of looking after its people by giving them the financial support they needed and were not willing to give it up just yet,” former Director-Economic Affairs of the Commonwealth Secretariat, Dr. Indrajith Coomaraswamy told the 161st Annual General Meeting of Planters Association of Ceylon in Colombo.The foreign aid that Sri Lanka gets is about 5-7% of the GDP and two-thirds of that has been from the concessional window of the World Bank. In addition, about 15% is from Japan at 2% interest or less while the remaining aid has also been less than 2%,” he said.“With no more access to that concessional money, Sri Lanka is now pushed into borrowing from the far more brutal and potentially oppressive international markets at commercial rates which is sending the country into crippling debt rather than towards development,” Dr. Coomaraswamy said.

He listed four areas for political reforms that would bring the country out of a cycle of debt.

They are the fiscal consolidation in the Budget, shifting resources from low productivity to high productivity areas, elevating the labour market to high value production, privatization or accountability of State-owned enterprises to increase productivity and changing the public services to be more productive, he said.

- SJ


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