President at Economic Summit ‘23 underscores need for radical economic restructuring

Addressing the 2023 Sri Lanka Economic Summit, President Ranil Wickremesinghe has declared the imperative need for radical economic restructuring to ensure the sustainability of the country’s economy.

The Head of State emphasized that continuous commitment to a new economic policy framework is essential to avoid a recurring economic crisis.

The summit, organized by the Ceylon Chamber of Commerce and held over two days at the Shangri-La Hotel in Colombo, commenced on Tuesday (Nov.28), and witnessed President Wickremesinghe laying out the achievements of the past year’s radical economic restructuring and outlining the roadmap for the nation’s economic future.

Wickremesinghe began his keynote address by acknowledging the theme of the summit Economic Reform for 2023.

He questioned whether the transformative measures taken could be labelled as mere reforms, asserting that the changes implemented were more accurately described as a radical restructuring with no possibility of reverting. “It’s a restructuring and a radical restructuring, and there’s no going back,” stated the President, underscoring the irreversible nature of the economic changes.

The president highlighted the progress made in the economy through the government’s radical restructuring efforts over the past year. He stressed the importance of continuing these efforts and working within the framework of the new economic policy to elevate the country to a robust economy resistant to potential downturns. Wickremesinghe’s vision for the economic future relies on the dedication and collaboration of all stakeholders within the specified policy framework.

One of the key achievements mentioned by the president was the successful negotiation with creditors over the country’s debt. He acknowledged the cooperation of all creditor groups and commended their constructive engagement. Notably, negotiations with China Exim Bank resulted in an agreement in principle to restructure the country’s debt, signalling a positive step forward in the economic stabilization process.

Wickremesinghe highlighted the government’s transparent and good-faith negotiations with creditors, dispelling expectations of challenges in the process. He specifically mentioned the engagement with the Official Creditor Committee and China Exim Bank, showcasing Sri Lanka’s ability to navigate complex negotiations successfully.

The president expressed optimism that the IMF Board would conclude the first review of Sri Lanka’s EFF program within the month of December.

Wickremesinghe outlined the ongoing discussions with external private creditors, emphasizing the government’s commitment to reach an agreement on specific restructuring terms with them shortly. A focal point of the restructuring strategy is a reliance on a long-term extension of the debt, with economic principles guiding future negotiations and operations.

In his address, Wickremesinghe touched upon the necessity of adhering to the agreed-upon framework, stressing that deviation could lead to adverse consequences with creditors. He urged the nation to embrace the radical restructuring as a last chance for economic stability, emphasizing the need to break away from the cycle of seeking external aid due to mismanagement.

Addressing concerns about consensus, the president acknowledged the challenges of obtaining agreement from political parties and trade unions. He argued that a consensus with those who had not taken responsibility in the past was difficult to achieve. The President called for a united front in recognizing the gravity of the economic situation and urged the country to agree on the proposed framework.

Wickremesinghe drew attention to the dangers of remaining a “beggar nation” and the unsustainable practice of seeking financial assistance without addressing the root causes of economic instability. He questioned the wisdom of repeatedly asking other countries for help, emphasizing the need for internal reform and competitiveness.

Wickremesinghe underscored the importance of a competitive, export-oriented economy, outlining the government’s vision for a digitalized and green economy. He drew parallels with the economic reforms of 1977, emphasizing the need for a new era of economic policies that align with the current global landscape.

Following his address, the president participated in a panel discussion moderated by the Chairman of the Sri Lanka Chamber of Commerce, Duminda Hulangamuwa. The panel included Mr. Montek Singh Ahluwalia, Former Deputy Chairman of the Planning Commission of India.

--PMD