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Sri Lanka receives $200m from AfDB for income support and agriculture

ECNOMYNEXT – The Ceylon Chamber of Commerce in Sri Lanka has welcomed key draft budget proposals, calling for their implementation and expressing willingness to support the process.

“While acknowledging the progressive proposals outlined in the budget speech, the key will be in terms of implementation that successive governments have failed to implement, thus reducing the credibility of the fiscal framework and the effectiveness of budget proposals,” the chamber said.

“We call for there to be greater accountability and transparency in the implementation process and look forward to supporting policy makers wherever possible to streamline the implementation process in line with best practice.”

The chamber said proposals to reform state-owned enterprises, create a debt management office, a bankruptcy law, to allow foreign universities to set up branches were among the progressive proposals.

The full statement is reproduced below:

Ceylon Chamber stresses need to focus on implementing phased proposals in Interim Budget 2022

The Ceylon Chamber of Commerce views the interim budget for 2022 presented by President Ranil Wickremesinghe in his capacity as Finance Minister as a positive step towards rebuilding the country’s macroeconomic framework.

The budget provides an estimate of the government’s projected revenue and expenditure for 2022 in an environment of high inflation and can serve as a basis for achieving the objectives set out in the medium-term fiscal consolidation program.

The Chamber notes that several proposals it has submitted in the past regarding state-owned enterprise (SOE) reforms, trade reforms, and financial sector strengthening were prioritized in the budget speech.

We underscore the need for meaningful reform of public enterprises through the proposed Public Enterprise Restructuring Unit while re-establishing the National Agency for Public-Private Partnership, which could be a catalyst for attracting FDI.

The establishment of an independent National Debt Management Agency, as announced, will also be essential in the management of public debt with greater transparency and governance.

We also recognize that some new areas of legislation will be reviewed, such as bankruptcy, while existing legislation, such as the Dismissal of Workers Act, will be reviewed. We look forward to playing a meaningful role in these discussions for such legislative reforms.

We recognize the priority given to exports and trade by revitalizing the national export strategy, the implementation of a trade adjustment program to facilitate the gradual elimination of the paratarians as well as the expansion of existing trade agreements.

The proposal on the optimal use of railways for the transfer of agricultural products is also welcome and has been a key request from the private sector for many years. The emphasis on granting greater independence to the Central Bank through a new law is also welcome.

The proposal to facilitate the establishment of branch campuses of foreign universities through the BOI is seen as a step that could create more opportunities for local students while generating foreign exchange earnings by attracting foreign students.

We want more clarity on the implementation of the revenue proposals that were announced in May 2022, as these are to be legislated soon if they are to come into effect from October 1, as indicated in the draft budget.

While acknowledging the progressive proposals presented in the budget speech, the key will be in terms of implementation that successive governments have failed to implement, thus reducing the credibility of the budget framework and the effectiveness of the budget proposals. .

We call for there to be more accountability and transparency in the implementation process and look forward to supporting policy makers wherever possible to streamline the implementation process in line with best practices.

We also call on the government to consider ways to reduce unjustifiable spending as much as possible and direct it to meaningful social protection programs or help meet fiscal and primary deficit targets.

We hope that with the establishment of the interim budget and the implementation of the proposals presented, it will serve as a catalyst to revive growth and ultimately set the country on the path of accelerated growth.

It is vital for the country to get out of this crisis. The Ceylon Chamber, as the premier chamber and voice of the private sector, will continue to support policy makers in implementing progressive reforms.

We hope that with a strong fiscal framework in place, this will pave the way for an eventual IMF program that would help stabilize the economy and mobilize financing to address current external cash shortfalls.


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