Sri Lanka’s Central Bank Governor stressed that State-Owned Enterprises need to be reformed so that they are not a burden on the economy.
“For us to come of the crisis we have to address the root causes of the imbalances. This is where the government will have to collect more revenue, curtail expenditure, and maintain a sustainable level of sovereign debt. As a result, there will be a benefit in the overall macro point of view for the monetary policy, exchange rate policy, and the external current accounts,” he told a Post-Budget Forum in Colombo on Tuesday (15).
According to the Central Bank Governor, the structural issue that Sri Lanka has been facing is the State Owned Enterprises Operations and the losses that they have been making, adding that it has become a huge burden on the banking sector, and also the government.
“The Next step is to transform all these state-owned enterprises and how they can make contributions without being a liability and a cost to the economy. Second is how to transform the economy into a foreign exchange earning and rather than borrowing,” said the government to measures to overcome the crisis.
“When we are in a situation that has created an economic crisis as a result of the medium, and long term bad policies or not right policies, there are these structural issues. For us to get the economy fixed and have an economy that can sustain itself without going back to the same cycle, this cannot be done overnight. It has to be a painful process. The best thing we can do is to share the pain fairly and equally within Sri Lanka and to share the pain with the people who gave money and invested in Sri Lanka in terms of credit. We are asking our creditors to share a part of the pain. It is not fair for us to ask them to share our pain on our behalf. “We have to show that we also share part of the pain,” he added.