‘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 |