SRI LANKA’S PARADIGM SHIFT IN THE ECONOMY

RW PRESENTS HIS MAIDEN BUDGET AND TALKS TOUGH 

Presenting his maiden budget for 2023 as the Executive President and the Minister of Finance watched by 500 school children and youth representatives from the parliament gallery, he said in no uncertain terms that there is no room for future struggles and mulled that he would not hesitate to bring in even a state of emergency to suppress such struggles if happened in the future. He further commented that he will not tolerate university students overstaying at universities for many years and hinted at introducing legislation to restrict overstaying of university students at faculties. Delivering one of the shortest budget speeches in the history of the Sri Lankan parliament which lasted for one hour and twenty minutes, he went on to state that he would bring in branches of several foreign universities to Sri Lanka to upgrade the standard of higher education in Sri Lanka and employability of university students.  This budget 2023 was themed ‘Sri Lanka: towards a new beginning” stressing the need to embark on a new journey for economic prosperity. He also emphasized that this budget is for the youth of the country. He also allayed speculations about the parliament’s premature dissolution, saying that he would not dissolve the parliament before its full term. He also pointed out that his budget is not a relief budget which had been the order of the day in the past but it would lay a solid foundation for Sri Lanka’s ailing economy. He identified the country’s youth as real natural resources. 

NOT FOLLOWING THE BEATEN PATH

Since independence, Sri Lankans were used to expecting price reductions or increases, salary hikes for government servants, more state sector employment, or other reliefs and welfare. This budget was devoid of measures of that sort, deviating from the traditional school of thought. In fact, this past trend led the country to its present state of economic crisis gradually. RW predicted a comfortable economic environment by the end of 2023. The highlights of RW’s budget proposals can be summarized below,

• Rs 50 Million allocated for job training of foreign employment seekers

• Rs 500 Million allocated for climate change initiatives and research establishing a purpose-built international university 

• A comprehensive welfare beneficiary system is to be introduced

• Expert Committee to explore the possibility of cultivating Cannabis as an export crop

• Sweeping reforms for Sri Lanka Telecom, Sri Lankan Airlines, Sri Lanka Insurance, Colombo Hilton Hotel, and Waters Edge Hotel

• Price hike for Passport and Visa fees 

• Western Province, Trincomalee, and Hambantota to be recognized as new economic zones

• Funds to encourage elders and the disabled to engage in entrepreneurial ventures

• Paid ward system in state-owned national and base hospitals 

• Funds to be allocated to ensure nutrition for children 

• Government fees and charges which have not been increased for the last 3 years will see a 20 % increase 

• Underutilized lands to be ceded for export crop cultivation on a long-term basis

• A new Value Added Tax (VAT) is to be introduced amending the act  

• New Free Trade Agreements (FTAs) to be entered into with other countries in the region

• A regulatory body to be established to oversee microfinance activities  

Furthermore, he allocated Rs 50 Million to establish a new institute under the purview of the government for Sri Lankan history studies. He also proposed to implement a new safety sticker for bottled drinking water which was seen as a measure of food security. 

ACTIVE PARTICIPATION IN ALL BUDGET READINGS 

The President was present at all readings of the budget. This was a stark contrast to what his predecessor Basil Rajapakse did. Apparently, he was absent during budget readings, thereby leaving no room for him to be questioned by the MPs. 

MIXED REACTIONS TO THE BUDGET

The general public was eerily silent on the budget proposals because there have been no price hikes in this budget. However, the government increased the prices of essential commodities in the run-up to the budget. As usual, some consumer products which were speculated to be increased had been hoarded. Even the Ceylon Tobacco Company refrained from issuing new stocks to the market in anticipation of a possible price hike although no shortage was experienced in the market. In spite of the government’s initiatives to salvage the economy, people are burdened with skyrocketing prices of essential commodities. Many poverty-stricken families find it difficult to sustain their livelihood in this context. It was reported that hundreds of thousands of middle-income-earning families have been impoverished due to the economic crisis in the country. There has been a sharp increase in malnutrition among school children although the government refutes this claim. The Medical Officer who declared the facts relating to malnutrition among school children has been interdicted pending inquiry for violating the establishment code. Some economic analysts point out that although the government professes a rosy picture for the country in 2023, the actual situation is far from that. They say that we are deeply engrossed in a crisis that cannot be solved overnight. Amidst these comments in favor and counter comments, the country’s citizenry has become confused. On top of it, the brain drain is happening at an alarming rate. Therefore, the world sees Sri Lanka as a highly mismanaged country by its corrupt politicians. Some people still believe that the present government could walk the talk but it is highly incomprehensible, looking at the state of affairs in the country. So, seeing is believing. It is a wait-and-see game for all Sri Lankans at present.