Sri Lankan economy needs restructuring; No more political prisoners - PM

Sri Lankan economy needs restructuring; No more political prisoners - PM

January 20, 2016   09:05 pm


Prime Minister Ranil Wickremesinghe says that Sri Lanka will go ahead with the Chinese-funded Colombo Port City project and invites Chinese investors to Sri Lanka. 

He made these remarks during a press conference at the annual World Economic Forum (WEF) in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland. 

Replying to a question from a journalist regarding China’s role in the regional developments, he said that China is one of the largest economic powers in the world and therefore China is reaching out to the rest of the world. 

As a result they are also operating in our part of the world, the Indian Ocean. Within Sri Lanka there are a large number of projects, infrastructure development which have been funded by the Chinese government, he said. 

“So we are going ahead with many of those projects including the Port City, the further development of the Hambantota Harbour. But we’ve also said we would like to see Chinese investments,” the PM said. 

Wickremesinghe said that infrastructure development alone is not sufficient and that now the government is discussing of bringing in Chinese investments into Sri Lanka.

“I think the Chinese government has also decided that some of its manufacturing industries should move out and Sri Lankan seems to be one of the locations for their industries to move out.” 

“We are looking at the Chinese participation in the logistics hub of Sri Lanka as well as further investments in the real-estate sector,” he revealed. 

No More Political Prisoners

Responding to the question regarding any further plans to reach out to the Tamils, the prime minister said that the government has reached out to the Tamils and that discussions are being held with Tamil parties and other organisations.

He said that there is a group working under the Minister of Foreign Affairs on the questions of accountability. 

“We are having discussions with the Tamil parties on the new constitution, on the election system which affects all the parties, on further devolution in the country.” 

He stated that the new government has also returned sections of land controlled by the military back to the people and that more land will be handed over in the future. 

“There is more land that will be handed back in the coming few months or we will lay down the timeframe for the handing of those lands,” he said. 

The prime minister said that Tamils are being recruited into the police force and that they have started by asking for 500 Tamils to be recruited. “Gradually things are getting back to the track.”

On the possibility of releasing Tamil political prisoners, Wickremesinghe said that Sri Lanka has no more political prisoners.

“We have no political prisoners anymore in the country whether among the Sinhalese or the Tamils. There are 290 of whom some of them are already convicted while there are trials in case of others,” he pointed out. 

He stated that this is the residue after a large number of prisoners were released and that the government is still looking at some of these cases to see what relief could be given. 

“The Minister for Prison Reform Mr Swaminathan is holding discussions on the issue with the Minister of Justice and the representatives of the Tamil National Alliance.”

Sri Lankan Economy Needs Restructuring 

With regarding to singing an agreement with the International Monitory Fund (IMF), he said: “We are having discussion with the IMF. We have not concluded discussions. I will be meeting with the Managing Director of the IMF while here in Devos. But we have also been discussing with many of the others.” 

The PM said that the Sri Lankan economy needs to be restructured and the country’s resources of foreign resources earning are limited.  

“As a result the imbalance in the balance of payment cannot be corrected without any major restructuring. There has been certainly a drop in the revenue collection of this country.”

“The mechanism is not working. We are also being buffeted by what’s happening internationally,” he asserted.

“Certainly the global economy has not recovered fast enough and it’s compounded by the fact that China has decided now to become a consumption oriented economy and its going through the adjustment as their currency becomes one of the SDR currencies in the IMF.” 

Wickremesinghe says that’s having an impact on the world. While the price of oil coming down is one of the advantages, there are also certain problems, he said. 

“Once I talk with the IMF we will look at contingency plans or the future.”

“No one is sure in this world how the events will turnout in 2016,” he emphasized. 

He stated that secondly Sri Lanka wants to be strong enough to face any contingency and to carry out its restructuring. 

“Everyone has found out in the last few months they have all had to revise their budgets and revise their targets because of the uncertain global situation. So it’s not surprising that we are having discussions and if the need be we will come to an appropriate arraignment with the IMF,” the PM said.

A Very Uncertain Year

When asked how he proposes to fill the budget deficit of 5.9 per cent, he said that they will look at raising money on the bond markets and also at private investments. 

“As we said, since the budget the whole global situation has changed. I don’t think any country could forecast what the budget deficit could be. This is why we are talking with the IMF on what’s the programme that we should have.” 

“And fiscal consolidation value for money would be one of the important parts of the budget. The depreciation of the Asian currencies started with the adjustment of the Chinese currency means that we will have to relook at our figures.” 

“Not only Sri Lanka but all countries are getting affected by what’s happening there,” he stressed. “It’s a very, very uncertain year.” 

“Where we have to raise money on the bond markets we will do that. But gradually we would like to more and more private investments coming in over a period of time.” 

Paris Climate Agreement

Responding to a question put forward though social media as to whether the climate agreement in Paris was a success, Wickremesinghe said that it depends on how many countries sing the agreement.

“I think our strategy is to ensure that everyone signs up then it really becomes a success. But this is a great achievement.” 

“We have got to ensure that a sufficient number of countries sign up to meet the criteria put down in the agreement,” he said. 

Sri Lanka will be establishing a Sustainable Development Council which will have oversight of all sustainable development legislations and actions, he said. 

“We are fully committed to it and we will do our role as far as sustainable development is concerned and climate change. But we would have to see how they react and how many countries sign the agreement.” 

“We are hopeful that the quota would be reached but this is a great achievement and let’s hope we can top it off by getting the requisite numbers,” he said in conclusion.   

The World Economic Forum (WEF) is a Swiss nonprofit foundation, based in Cologny, Geneva. Recognized by the Swiss authorities as the international institution for public-private cooperation, its mission is cited as “committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas”.

The Forum is best known for its annual winter meeting in Davos. The meeting brings together some 2,500 top business leaders, international political leaders, selected intellectuals, and journalists to discuss the most pressing issues facing the world. 


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