Economy on a positive trajectory:
Electoral sentiments will be addressed:
Domestic production has to be increased:
In an exclusive interview with the Sunday Observer, Industries and Health Minister Dr. Ramesh Pathirana outlines the Government’s plans for 2024 as Sri Lanka emerges from the biggest economic crisis since obtaining Independence. Dr. Pathirana said the Government is taking all possible steps to reduce the burden on the public in the face of difficult decisions.
Q: As a senior Minister responsible for the direction of the current Government, how do you feel about the ongoing state of our economy, particularly considering its precarious situation?
A: Our country has undergone a challenging economic journey. With the intervention of the International Monetary Fund (IMF) for economic reform, we are witnessing stabilisation and recovery. Notably, in 2022 and 2023, Government capital investment was absent. Specifically, the Government directed its efforts towards debt restructuring and settlement. As the country’s economy stabilises, there is a planned Government capital investment in 2024. This anticipated move is expected to propel the economy into a favourable state soon, with no intention of looking back.
Q: As the cost of goods continues to rise daily, there is growing public discontent, with people asserting that the Government’s handling of inflation is becoming increasingly burdensome. What is your response to these concerns?
A: Two factors contribute to the escalation of commodity prices. Firstly, the prices of goods increased during the last festive season. Certain traders engaged in selling goods at higher prices. Addressing this issue, it is crucial for the Consumer Affairs Authority (CAA) to intervene and take appropriate measures.
Conversely, the primary factor driving the increase in commodity prices is the imbalance between demand and supply. It underscores the importance of enhancing our production capabilities. Historically, there have been challenges in the production of goods within our country.
We are pleased to note the increase in rice production, attributed to the availability of fertiliser. However, there is a trend of rising prices due to large-scale traders stockpiling rice. The Government is actively intervening, and implementing measures to address this situation.
Specifically, steps are under way to regulate prices by importing rice, and steps have been taken to challenge the monopolies by importing eggs. However, it is acknowledged that reliance on imports is not an optimal solution for our country. The key to strengthening our economy lies in enhancing domestic production and fostering a robust production economy.
Q: The Opposition accuses the Government of neglecting to provide concessions to the people and failing to control commodity prices and instead focusing on election preparation and the preservation of power. What is your response to these accusations?
A: We have undertaken efforts to enhance social security as a means of relief for the people. Special relief measures such as Aswesuma have been introduced, particularly targeting low-income earners. A significant portion of those receiving Samurdhi subsidies will benefit from these relief measures.
As a result, certain families are now receiving double the benefits through these relief measures in addition to the continued implementation of the Samurdhi subsidy by the Government.
It is essential to recognise that historically, all Governments have offered free health facilities and education. Around 1.8 million families receive relief through comprehensive infrastructure support across the country. Facilities such as salary allowances are extended to 1.5 million Government employees.
We face the challenge of providing pensions to about 600,000 pensioners, which is a significant undertaking for a country such as Sri Lanka. Looking ahead, the crucial step to address this challenge is to enhance the production capacity of our nation. It requires a collective commitment from all citizens to contribute to this essential goal. Nevertheless, we remain committed to and prioritise social security initiatives.
Q: The Government has announced an increase in the Value Added Tax (VAT) to 18 percent starting from January 1. Economic analysts, social commentators, and politicians have expressed concerns, predicting a significant overall increase in the prices of goods in the country. What is the Government’s response to these concerns?
A: The current VAT rate is already at 15 percent, and the proposed increase is by an additional three percent.
The Government emphasises that the overall impact may not be as significant as anticipated. However, there is acknowledgment of potential effects on fuel prices, leading Power and Energy Minister Kanchana Wijesekera to engage in discussions on managing and mitigating the impact on fuel prices.
Efforts are being made to minimise the impact on fuel prices, and it is crucial to note that many essential goods are still exempted from VAT. New VAT has been applied to certain other goods as part of measures aimed at safeguarding the economy. The Government emphasises its commitment to implementing tax policies in a way that minimally disrupts people’s lives.
Q: Although the Central Bank of Sri Lanka (CBSL) reports an increase in our country’s dollar reserves and a significant influx of tourists, there seems to be a disparity in the perceived economic progress. What are the expectations for the future trajectory of this economic expansion?
A: Certainly, the nation’s economy is on the path to recovery. In the upcoming year, we anticipate significant development with active involvement from Government institutions.
Overall, 2024 is expected to be a more promising year than 2022 and 2023.
Q: The appointment of a new Indian High Commissioner (Santosh Jha) is noteworthy, given the close ties between our nations as neighbours. What expectations or relief do we anticipate in our future interactions with India?
A: India played a crucial role in assisting us during the economic crisis, providing significant support in the form of approximately US$ 4 billion in loans and grants. This assistance has been instrumental in our collective efforts to uplift the economy.
It is important to acknowledge that India, our strong and rapidly rising neighbouring country, exhibits substantial economic growth and is emerging as a global power. Fostering a positive and cooperative relationship with India is crucial for mutual benefit and harmonious regional dynamics.
The potential benefits between India and us are numerous and reciprocal. While acknowledging the advantages on both sides, it is crucial to recognise the significance of maintaining strong foreign relations, which play a pivotal role in our national interests and global interactions.
Q: The Social Media Regulation Act will resurface next year. Does its implementation raise concerns about the potential infringement on freedom of speech under the guise of regulating social media?
A: There will be no restrictions on media freedom, mainstream or social. The focus is solely on regulating social media to ensure accountability and responsibility in its use. Our responsibility is to provide accurate information to the people, and the steps taken are aimed at fulfilling that purpose.
Q: What is your opinion on the new Health portfolio you received?
A: The Ministry of Health boasts excellent infrastructure and a team of qualified officials. Despite facing numerous challenges during the last Covid-19 pandemic, we have successfully overcome them and are now progressing. Managing the affairs of this Ministry moving forward is not anticipated to be a problem, given our experience and capabilities.
Q: Facing elections next year is a certainty. Is the Government and your party adequately prepared for this upcoming electoral challenge?
A: Currently, we are prepared to uplift the people’s economy and propel the country forward. As elections approach, we will undertake measures to address the electoral requirements and public sentiments.
Translated by Maneshka Borham
