Working in Accordance with the Agreements with the IMF
The restructuring of debt under programs agreed upon with the International Monetary Fund (IMF) encountered significant challenges. At the time of assuming power, bilateral debt restructuring agreements were already in place. Additionally, discussions on international sovereign bonds in the commercial market had begun. These discussions concluded two days before the presidential election, as publicly announced. Therefore, we lacked the opportunity to reopen negotiations on debt restructuring. Over two years were consumed in these discussions. If these negotiations were to resume, it would take considerable time. Without completing the ongoing debt restructuring program, advancing the economy would be unfeasible.
By the time we assumed power, the debt restructuring talks were in their final stages. Thus, debating the pros and cons of these proposals now is irrelevant. This is the reality we face. Consequently, there is a common understanding regarding bilateral debt, and we are prepared to swiftly enter into separate agreements with each country.
On the other hand, preliminary agreements have been reached concerning commercial market debts. We believe this process can be completed by the end of December. As a result, we aim to conclude the debt restructuring program successfully by the end of this year. Additionally, we expect to secure a staff-level agreement on the third review with the IMF this week, which will serve as a cornerstone for rebuilding confidence in our economy.
However, we do not believe that this policy alone will suffice to address the deep-rooted crises in our economy. Yet, this program is adequate to manage the financial sector challenges our country faces.
Three New Economic Strategies
To overcome the severe collapse of our economic framework, we must adopt new economic strategies, characterized by three main features.
1. Accelerating the Growth and Expansion of Goods and Services Production
We must achieve rapid growth and expansion in the production of goods and services across the country. Currently, the Western Province significantly contributes to our economic growth. Therefore, the economy must be expanded to include other provinces, making accelerated growth and expansion of production a primary agenda for our economic framework.
2. Engaging the Public in Economic Activities
An economy that alienates the public is fruitless. A marginalized population cannot yield meaningful economic outcomes. The public must become stakeholders in every economic activity according to their capabilities. Only when the public becomes active participants in the economy will its benefits trickle down to them. Thus, the focus is on how to transform the public into stakeholders in the economy.
3. Ensuring Equitable Distribution of National Wealth
No matter how much national wealth is produced, if it is concentrated in the hands of a few, the nation will not achieve economic stability. All citizens contribute to producing national wealth. Natural resources must be utilized for this purpose. If the national wealth is concentrated among a handful, both the economy and society will lack stability. Hence, our policy emphasizes ensuring that economic benefits flow equitably to the people. History has shown that the concentration of wealth among a few leads to significant crises, which we aim to avoid.
Managing the Market and Providing Continuous, High-Quality, and Fairly Priced Goods and Services
We have a policy for managing market behavior. Our country is not a large market, and monopolies may form within it. For instance, our daily rice consumption is around 6,500 metric tons, amounting to approximately 2.3 million metric tons annually. Compared globally, this indicates a small market structure prone to monopolization.
Currently, our markets do not operate based on economic data and dynamics but are influenced by monopolistic entities. We are witnessing these effects today. Prices of goods like paddy and rice are determined not by market factors but by the monopolistic powers controlling the market. This dominance burdens the public with high costs for essential goods and services.
Thus, we aim to restore normalcy in our market operations. Our goal is to ensure the continuous supply of high-quality goods and services at fair prices, which is the government’s responsibility towards the public. This responsibility cannot be relinquished. To achieve this, we focus on several mechanisms.
For certain sectors, competition can ensure continuity, quality, and fair pricing. However, other areas require regulation. Regulatory authorities, backed by parliamentary legislation, have been established for this purpose. Nonetheless, we must reassess whether these existing regulations and institutions are sufficient to address market distortions.
State Intervention for Regulating Market Competitiveness
Markets can achieve their intended goals through free competition. However, in certain sectors, it is not just free competition but regulatory intervention that ensures proper functioning. Regulatory authorities have already been established in our country for this purpose, supported by legal frameworks enacted by the parliament. However, it is essential to re-evaluate whether the existing regulatory authorities and legislation are adequate to address the market distortions that prevail.
Therefore, in certain sectors, the state should intervene through regulatory authorities to manage the market. In addition, specific sensitive sectors that are vital to the economy should be regulated by direct state participation in the market. This includes the energy market, where free competition alone cannot determine its dynamics. The energy market requires state participation to prevent adverse economic impacts caused by even minor fluctuations. Thus, we firmly believe that state involvement is crucial in sensitive areas like the energy market.
Similarly, in the financial market, absolute freedom could lead to significant instability. While the Central Bank functions as a regulatory authority, we believe state participation in the financial market is also essential. Critical segments of the economy must be represented by the state to stabilize the market. Therefore, the state must actively engage in these critical areas to ensure organized and sustainable market dynamics.
Organizing Dispersed Markets
We have the potential to transform fragmented markets into more organized structures. Cooperative networks, both domestically and globally, play a significant role in market regulation. Strengthening these cooperative systems can make them robust competitors within the market. This forms the foundation of our policy to manage production and market regulation effectively.
Rapid Development in Tourism and Information Technology Sectors
In the short term, we have identified several areas that can achieve rapid growth. The tourism industry is one such sector. Our plan aims to attract four million tourists and generate an economic output of $8 billion within the next three to four years. The highest number of tourists visited our country in 2018, totaling 2.3 million, contributing $4.3 billion to the economy. Our objective is to double this figure by leveraging the tourism industry's potential for rapid economic gains.
The IT sector is another area of focus. Globally, IT markets are expanding rapidly, and we aim to meet the demand for skilled professionals. Currently, our country has about 80,000 IT professionals. We aim to increase this number to 200,000 within five years. Additionally, IT exports currently generate $1.2 billion annually. Our goal is to boost this to $5 billion through transformative initiatives in the sector, with a focus on education, especially language skills. The IT sector is envisioned as a significant driver of economic growth.
Leveraging Geographical Advantage to Establish a Maritime Hub
Our country's strategic location offers immense potential to become a major trade and maritime hub. The Port of Colombo is already among the leading ports globally, but inefficiencies in its operations hinder its performance. Enhancing the port's efficiency and management will ensure better service delivery to its users.
By utilizing our geographical advantage to its full potential, we aim to position the country as a prominent global trade and maritime hub. Necessary plans have been developed to achieve this goal, which is expected to deliver significant economic growth.
This comprehensive policy approach outlines our vision for leveraging critical sectors, strengthening regulatory frameworks, and capitalizing on natural advantages to drive sustainable economic development.
Creating a Revolutionary Transformation in the Agricultural Sector
In agriculture, we recognize that we possess an environment well-suited for development, along with a vast farming community deeply connected to the land. However, the current outcome is a farming population burdened by debt. Many farmers are forced to pawn their belongings, including their crops and water pumps, to banks. Despite years of significant investments in agriculture, particularly in irrigation projects and research, the final result has been far from ideal. Farmers remain entrapped in a cycle of debt, making them marginalized members of society. This has led to health insecurity, disrupted education for their children, and inadequate housing.
The poverty that has become entrenched in the lives of farmers, intertwined with their agricultural livelihoods, has turned into a significant social tragedy. Therefore, we envision a new and innovative path for the agricultural sector. Specifically, we must enhance our seed research facilities, improve seed farms, and reintroduce robust agricultural extension services. Not only should we focus on producing agricultural goods to meet domestic needs, but we must also target export markets.
Without achieving a renaissance in the agricultural sector, we do not believe it is possible to uplift the lives of farmers. We see this sector as a platform for rapid progress. For this reason, we have already increased the fertilizer subsidy from Rs. 15,000 per hectare to Rs. 25,000. We are ready to provide further subsidies if necessary because agriculture must become a key component of our country's economy.
Revitalizing the Fisheries Industry
We also focus on the fisheries sector. Our country is surrounded by a sea area eight times the size of its landmass, yet we utilize only a small fraction of this vast marine resource. The fisheries industry has immense potential to contribute significantly to our economy. Recently, the rising cost of fuel and other supplies caused many fishing boats to remain anchored ashore, unable to set out to sea.
Boats tied to the shore bring no results. Therefore, our first priority was to relaunch these boats into the ocean. This is why we implemented a fuel subsidy for fishermen at the outset. According to the latest reports, all previously anchored boats are now back in operation, which is a positive sign. The fisheries industry can serve as another significant driver for economic growth.
These measures are aimed at creating a more dynamic and prosperous future for the agricultural and fisheries sectors, ensuring they become integral parts of our national economy.
Steps to Maximize the Utilization of Mineral Resources with Private Sector Support
We believe that our country has the potential to create significant economic wealth from its natural resources, particularly mineral resources. However, for a long time, we have failed to add necessary value to these resources and capitalize on their true potential. Thus, we aim to build an industrial system that transforms these mineral resources into more valuable assets through collaboration between the government and the private sector.
Discussions have already been held with local industrialists regarding this initiative. We do not believe that this transformation can be accomplished by the government alone. In certain areas, we need advanced technology, while in others, we require capital. Therefore, we intend to leverage private entrepreneurs to enhance the industrial system. We firmly believe that this approach will mark a new turning point in our economy.
A New Era for Science and Technology
The next significant sector we aim to focus on is science and technology. When we observe the developed nations of the world, it is evident that they allocate a significant portion of their annual budgets to research and innovation.
Markets today are no longer driven by traditional goods and services. They continuously evolve, shifting towards innovative products and services rather than conventional offerings. Many Asian countries have successfully capitalized on this evolving marketplace, but we have struggled to establish a foothold in this global market. We remain a supplier of traditional goods and services, lagging behind in innovation.
Our vision is to embark on a transformative journey in the field of scientific research. To this end, we have established a dedicated Ministry of Science and Technology, appointing highly experienced individuals to lead these efforts. For example, we have appointed Prof. Krishantha, a former professor at the Ragama Medical Faculty, as the Minister of Science and Technology. Additionally, we have engaged experts like Gomeek, who has conducted groundbreaking research in the United States, as the Presidential Advisor on Technology. We anticipate achieving a significant transformation in this field.
The Importance of Digitalization
Another key focus is the digitalization of our economy. We believe that achieving a digital economy valued at USD 5 billion is within reach. To facilitate this, a separate Ministry of Digitalization has been established.
We are fortunate to have industry veterans like Hans Wijesuriya, who has extensive international experience, stepping forward voluntarily to contribute to the country's digital transformation. I have prepared to appoint him as the Secretary to the Ministry, Chairman of the ICT Institute, and the Presidential Advisor on Digitalization.
This initiative must be centrally coordinated to achieve its objectives. Digitalization is critical for enhancing public services and propelling our economy into a new phase of growth. A "Digital Sri Lanka" is the hallmark of the future, and our government is fully committed to realizing this vision. We are determined to play our part in its success, confident that this transformation can be achieved.
By focusing on these key areas—mineral resources, science and technology, and digitalization—we aim to elevate our country to a new level of progress and prosperity.
The Clean Sri Lanka Initiative
We are about to launch a major program titled Clean Sri Lanka. To lead this initiative, I intend to establish a Presidential Task Force. The meaning of Clean Sri Lanka goes beyond just environmental conservation—it encompasses creating positive transformations in political governance, the state administrative machinery, and the citizens themselves. While we strive to build a better state, it is essential to focus on creating a better society. Without a positive transformation among citizens, changes at the political level alone cannot achieve sustainable success.
Therefore, this initiative aims to foster good citizens with positive attitudes, behaviors, and practices. It strives to create a population that respects shared resources and acts responsibly.
Key Objectives of Clean Sri Lanka
One key focus of this program is addressing a fundamental issue often overlooked: access to clean sanitation facilities. For instance, many women traveling from rural areas to Colombo face difficulties due to the lack of clean public restrooms. Some even avoid drinking water throughout their journey. Existing facilities, if available, are poorly maintained and unusable.
This highlights a critical issue—the societal mindset towards shared resources. Public spaces like restrooms are often vandalized rather than preserved. This reflects a broader problem in certain segments of society, demonstrating the need for a cultural shift. Through Clean Sri Lanka, we aim to bring about such a transformation.
We seek to educate citizens on how to protect shared spaces, act responsibly in public, and safeguard resources not only for the present generation but also for future ones. This initiative extends to fostering better driving practices, crossing streets responsibly, respecting others, and maintaining courteous conduct.
Transforming Society
Do we not need a society characterized by kindness, understanding, and cooperation, rather than one filled with conflict and resentment? Today, even minor incidents often escalate into disputes. Patience, forgiveness, and compassion seem to have diminished. As a result, our society feels like a desolate, dry land lacking vitality and warmth.
We need a society with smiles, empathy, and a deep sense of humanity—where people care for others’ pain and act with compassion. This transformation is essential not just socially but also in education, literature, law, and cultural attitudes.
Eradicating Poverty
Eliminating poverty is one of the government’s top priorities. Every citizen deserves access to a fair meal, quality education for their children, a secure home, sustainable income opportunities, and mental peace. This is particularly critical in addressing rural and urban poverty.
As an initial step, we plan to increase the existing welfare allowance in the upcoming budget. Provisions will also be made to provide school supplies to children in underprivileged areas and increase the pension for retirees starting October. Furthermore, we will introduce fair salary increments for public sector employees in the upcoming budget.
These measures are all part of our broader vision to build a better Sri Lanka, ensuring prosperity and equality for all citizens.
Every Citizen's Welfare
Malnutrition in children will not be allowed to escalate into a future societal crisis. To eradicate malnutrition, financial assistance will be provided to affected families. Additionally, efforts will be made to ensure that pregnant mothers receive nutritious meals for their well-being and that of their unborn children. We are committed to supplying essential goods and services that are currently unaffordable to many due to poverty. However, we recognize that long-term dependence on government support is not a sustainable solution.
In any country, there is always a portion of the population economically active and another that is economically dependent. Even in the most developed nations, such disparities exist. It is the government's responsibility to look after these vulnerable groups, and we will not neglect this obligation.
Supporting People with Disabilities
Sri Lanka has a significant population of individuals with disabilities. Families with disabled children often face immense challenges, as their entire lives revolve around the child's condition, leaving no room for a culturally rich and fulfilling life. This burden should not solely rest on these families. To address this, we are devising a special mechanism and providing allowances to support persons with disabilities.
Our government aspires to be one that cares for and supports every citizen. It is a fundamental duty and responsibility of any government, and we are committed to fulfilling it.
Sustainable Solutions for Poverty Alleviation
We do not believe that poverty can be eradicated solely through financial aid and benefits. To truly address this issue, individuals must be engaged in productive economic activities that yield sustainable outcomes. Currently, agriculture is the primary livelihood for many living in poverty. Unless agriculture becomes a profitable venture, it will be impossible to uplift these individuals. Similarly, unless the fisheries sector becomes lucrative, those dependent on it will remain trapped in poverty.
Our initial focus will be on transforming these existing livelihoods into profitable and sustainable economic activities. However, we acknowledge that traditional economic activities alone will not suffice. We must create new economic opportunities and avenues within communities.
Empowering Small and Medium Enterprises (SMEs)
Currently, there is a troubling trend of small and medium entrepreneurs leaving the country. We need to replace this "exodus mentality" with a "growth mentality," encouraging SMEs to thrive within Sri Lanka. It is the government’s responsibility to provide the necessary technical knowledge, capital, and access to markets for these entrepreneurs.
Sri Lanka’s domestic market, with a population of approximately 38 million, is relatively small. Entrepreneurs cannot solely rely on this limited market to grow. Therefore, our industrialists and entrepreneurs must seek international markets.
Reforming Diplomatic Services
To support this vision, we plan to comprehensively reform our diplomatic services. Diplomats will not only maintain state relations but also take proactive measures to identify foreign markets for Sri Lankan industries. For instance, our construction industry, equipped with advanced technical capabilities, must expand beyond Sri Lanka. Similarly, we must add value to our unique domestic products and establish new industrial systems that cater to global markets.
SMEs should no longer function in isolation, driven only by personal interests. Instead, their growth should align with the government’s vision. We have already developed plans to support and regulate this sector to achieve national economic goals.
Upcoming Budget Plans and Projections
We have outlined our vision in the program A Prosperous Nation – Beautiful Lives. Ministers are currently evaluating and incorporating specific measures into their respective ministries. While we cannot immediately present a complete budget, a temporary appropriation bill will be introduced in early December to allocate funds for the next four months.
The full budget will be presented by early February and is expected to be approved by mid-March. The practical implementation of these plans will be embedded within the budget framework.
Collective Responsibility for a New Era
Sri Lanka is entering a transformative era in its economy and society. To ensure the success of this new era, we expect the full support of all members of Parliament. Although we come from different political backgrounds and have engaged in debates and criticism, today we are united in the common goal of building a better country. As representatives of the people, we have a responsibility to work towards this shared vision.
We trust that members of the opposition and all political leaders will contribute to this effort.
In conclusion, I echo the words of Martin Luther King Jr.:
"Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that."
Thank you.
May the Triple Gem bless you.
May the divine powers guide us all.
2024-11-21
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