The Future Distribution of Emerging Economy Benefits to a Larger
Population
Systematic Implementation of Activities Based on a Scientific Plan
Integrity in Leadership: Never Compromised for Power
Prioritizing National Reconstruction over Personal Ambitions
Politicians’ Disconnect: Dreaming of Power While Ignoring Reality
A Nation Rejoices as Economic Hardships Fade Away
Parliament Passes Vital Ordinances for Government Programs
Introduction of Economic Reforms Bill to Parliament Imminent
President emphasises during Parliament address
President Ranil Wickremesinghe asserted that the nation’s economy is experiencing robust
growth as a result of the government’s initiatives. Consequently, he pledged further
assistance to the people in the future. Stressing the methodical and scientific execution of
these endeavours, the President emphasized his commitment to truthfulness over political
gain. He clarified that his current endeavours are dedicated to national reconstruction rather
than personal power accumulation.
Addressing Parliament today (06), President Wickremesinghe lamented the tendency of
certain political factions to prioritize rhetoric over tangible solutions. He argued that the
intricacies of the country’s economic challenges defy simplistic remedies, urging those
versed in economic matters to acknowledge this reality. With the government’s strategy
yielding tangible results, he urged swift legislative action to cement these gains, signalling
the forthcoming submission of the Economic Reforms Act.
In conclusion, President Wickremesinghe urged a collective decision on whether to persist
with the current trajectory, which promises economic revitalization, or risk regression to the
dire circumstances of eighteen months prior.
Following is President Ranil Wickremesinghe full address to the Parliament on 06th
March 2024 –
It is widely acknowledged that our country has achieved a certain level of economic stability
at present. However, there are individuals who criticize the programs we enact without
demonstrating acceptance of them. Despite the apparent strength of the economy, there are
accusations that the general populace isn’t experiencing its benefits. Furthermore, there are
claims of unnecessary tax burdens on the people, as well as excessive hikes in electricity
bills and fuel prices.
There’s a commonly held belief that taxes should be collected from the people gently, akin
to plucking flowers without crushing them. However, criticism is directed towards us for not
adhering to this principle. Yet, it’s important to note that these critics overlook the
opportunities available to harvest flowers while crushing them to generate revenue. This
lesson is quite profound. Under typical conditions, it’s feasible to extract nectar without
damaging the flowers. However, in the intermediate space, this isn’t always possible, as the
situation differs significantly.
Today, we find ourselves journeying towards intermediate space, but our path has recently
led us across a dangerous economic vine bridge. We find ourselves in a precarious situation
due to several factors contributing to the collapse of our economy into bankruptcy. One
significant reason is the short-sighted decisions made by past governments. Their failure to
implement sustainable economic policies has exacerbated our current challenges.
Additionally, various political parties have opposed numerous constructive government
initiatives, leading to disruption and hindrance of positive work plans. The destruction of
public property further exacerbates the situation, adding to the economic turmoil we face.
Consequently, our nation requires a structured economic blueprint, a robust financial plan to
navigate through these challenges. Despite several attempts to implement such a plan, we’ve
struggled to do so consistently due to the lack of continuous opportunities.
I would like to excerpt a segment from an article authored by Dr. Chandima Wijebandara in
1989, published in the Budhusarana newspaper. In the mentioned article, Dr. Chandima
Wijebandara discusses the “Kootadantha Sutra”, a teaching expounded by the Buddha.
“Development is unattainable without a blueprint. The „Kootadantha Sutra‟ from the‟ Dīgha
Nikāya‟ explains the vital importance of such plans for development. It illustrates how a
government, faced with an anti-government crisis raised by the proletariat in an
underdeveloped nation, managed to develop the country through a structured plan. This plan
is grounded in state-based economic strategies. Moreover, the sutra reveals that the public
thrived not only economically but also enriched themselves in terms of values, fostered
positive social relations, and lived contentedly and harmoniously.” We failed to adhere to a
scientific and methodical approach like the one outlined. Certain groups obstructed the
implementation of such a strategic plan.
Consequently, the ramifications are evident in the country’s current state. It has plunged into
bankruptcy, unable to repay loans and withstand the economic pressures. During this period,
the entire society, from ordinary citizens to major entrepreneurs, endured severe hardships.
Power outages became commonplace, ushering in an era of long queues and scarcity.
Countless individuals lost their livelihoods as businesses and industries crumbled. Some
even opted to flee the country altogether. The nation found itself engulfed in turmoil,
descending into an economic abyss. Amidst these trials, the country teetered on the brink of
disorder. Governance faltered, and control slipped away, leading to grave danger not only
on an economic front but also in terms of social and political stability. No individual stepped
forward to confront the frightening task of reversing this dire situation. Despite invitations
extended, all declined the opportunity. None possessed the courage to confront the raging
inferno head-on and extinguish it.
Amidst the reluctance of others, I courageously accepted the challenge for the betterment of
our country. Venturing into the heart of the crisis, I tirelessly worked to extinguish the
flames of adversity. Today, the nation reaps the rewards of those arduous efforts, and I am
grateful for the unwavering support of those who stood by me during this exhausting
endeavour. We embarked on a methodical journey, collaborating with the International
Monetary Fund to devise a comprehensive economic plan. Through the diligent execution of
this plan, the nation gradually returned to stability. The burdens eased, and the clouds of
distress began to dissipate. Before this esteemed House, I would like to present some
economic indicators that vividly illustrate this progress. Our economy, which experienced
consecutive contractions for six quarters from 2022 to the second quarter of 2023, began to
show signs of recovery from the third quarter of 2023 onwards.
Forecasts from international financial organizations suggest that we are poised to achieve a
growth rate of 2-3% this year. Notably, in 2023, we managed to bolster state revenue by
over 50% compared to the previous year. Furthermore, we attained a surplus in the primary
account last year. This enabled us to settle all outstanding payments owed to contractors
who had rendered services to the government over the past three to four years. In the first
eight months of 2022, major state-owned enterprises collectively incurred a staggering loss
of Rs. 720 billion. However, in the corresponding period of 2023, we successfully
transformed this into a profit of Rs. 313 billion. Despite the closure of numerous businesses
amid the economic crisis, the resurgence of the economy has encouraged the establishment
of new ventures. In 2022, the Company Registrar recorded the registration of 17,819
companies, a figure that rose to 22,376 in 2023. Additionally, in January 2024, 1,995 new
companies were registered. Through coordinated macroeconomic demand management
efforts between the Central Bank and the Government, inflation dropped from 70 % in
September 2022 to a significantly lower 5.9 % by February 2024.
Interest rates have undergone a significant reduction, dropping from over 30% in 2022 to
less than 10 % in 2023. This decrease has brought relief to small and medium-sized
enterprises (SMEs) and consumers, particularly as inflationary pressures ease. Moreover,
the usable foreign exchange reserves, which stood at less than US$ 20 million in mid-April
2022, have surged to surpass US$ 3 billion. Import restrictions have been lifted, with the
exception of private motor vehicles. In a notable milestone, the balance of payments
achieved a surplus in the current account for the first time since 1977, during the year 2023.
This achievement has led to a depreciation of the US$ from Rs. 363 to Rs. 308 as o
yesterday, marking a strengthening of the Sri Lankan Rupee.
The impact of this economic progress is evident throughout society today. How many
individuals embark on pilgrimages to Anuradhapura and Siripada from hand tractors to large
buses? How many undertake journeys to Talawila and Madu Church for religious purposes?
How many indulge in leisurely trips to Nuwara Eliya? How many individuals park their cars
on the side of the road, open their trunks, and initiate small businesses due to their inability
to repay the loans they obtained? And are they now experiencing a sense of freedom? How
challenging is it to secure a seat on a long-distance coach? How many travellers fill the
unreserved compartments? How many tourists explore every corner of the country?
A nation that once struggled to leave their homes is now traversing freely. Previously, they
couldn’t afford to put a drop of oil in their car to rush a sick person to the hospital or
accompany a deceased loved one to the cemetery. People faced challenges such as not
having gas for cooking at home, leading many to prepare meals outdoors. A nation that,
when a child fell ill, would go from house to house in the middle of the night searching for a
Paracetamol pill.
However, this situation has undergone a remarkable reversal. There are critics who question
the economic progress we currently experience, attributing it to the temporary suspension of
loan payments. They argue that once the debt is repaid, the nation will regress into a state of
hardship. They describe the current situation as an interval in hell, suggesting that despite
the apparent progress, underlying challenges remain unresolved. I’d like to underscore that
the criticism lacks a factual basis.
Currently, we are actively engaged in discussions regarding the restructuring of all loans,
including domestic and foreign loans. We are optimistic that these negotiations will reach a
successful resolution soon. Our goal is to obtain temporary relief from debt defaults from
2023 to 2027. Subsequently, we plan to diligently work towards repaying the loans in the
period from 2027 to 2042.
Sri Lanka faces a significant burden of debt. By 2022, the country was slated to repay
approximately US$6 billion in foreign debt annually, amounting to about 9.5% of the GDP,
a considerable strain for any nation. Through successful negotiations for debt restructuring,
we aim to alleviate this burden by reducing the annual foreign debt payments to 4.5% of the
GDP, a substantial halving of the previous percentage.
If the current trend of economic growth, as observed in 2022 and 2023, persists, we can
anticipate maintaining a high percentage of state income. In such a scenario, servicing the
debt would no longer pose a burden on the country. Currently, we have managed to elevate
state revenue to nearly 11% of the Gross Domestic Product (GDP). This increase
necessitated the imposition of Value Added Tax (VAT). Undoubtedly, this decision was a
bitter and challenging one
We made the decision to implement such a tax with great reluctance. However, considering
the economic ailment we face, there are no other viable options. We must endure this
temporary pain for the greater good. The implementation of VAT has bolstered the
government’s revenue, demonstrating to the international community our capacity to repay
the debt. With the increase in government revenues and the revival of the economy, the
rupee has strengthened. The strengthening of the rupee has led to a decrease in the prices of
imported goods, including fuel. As a result, all VAT-paying companies are now reaping the
benefits of the stronger rupee, which extends to the entire country. Furthermore, we
anticipate additional benefits in the future.
So, if we continue our current trajectory with the same vigour, our economy will be in
significantly better shape by the end of this year. Additionally, we’ve ceased the practice of
using taxpayers’ money to cover the losses of government institutions. Instead, we’re
restructuring these institutions and transferring them to investors.
The tax network will be expanded, with the total number of tax files surging to over 1
million in 2023, marking a 130% increase. The practice of printing money has been
completely halted.
We’re actively pursuing essential legal reforms to strengthen and modernize the legal
framework, systems, and processes, aiming to improve public financial and economic
management for the benefit of all.
In a ground-breaking move for South Asia, the Governance Diagnostic Report has been
released, and on-going efforts are underway to enhance governance and mitigate corruption
risks. We’re also attracting investments and establishing a new institution for this purpose.
Efforts are underway to modernize the agriculture sector, with several foreign countries
expressing interest in starting large-scale farms under food security initiatives. We’re
gradually unlocking foreign markets for exports, focusing on non-traditional export items.
Our goal is to transform the country into a green and digital economy and establish it as a
regional economic and service hub, with plans to make the Port City an international
financial hub. However, this can only be achieved if we continue to execute our plan
diligently.
The measures we’ve implemented so far have allowed us to provide numerous facilities and
concessions to the majority of our citizens. Under the „Urumaya‟ program, two million
families will acquire land ownership, reclaiming inherited land lost over generations.
We’ve tripled social security spending to protect the poor and vulnerable from the economic
crisis, benefiting 2.4 million low-income families with “Aswesuma.” Around 4.5 million
school children are now covered by the “Suraksha” insurance scheme.
Every school teaching information technology now has smart classrooms, and 100,000
school children have received scholarships through the President’s Fund. The funds
allocated to patients from the President’s Fund have been doubled.
Development initiatives have begun in numerous villages across 89 Divisional Secretariat
divisions as part of the “Kandukara Dashakaya,” with each regional secretariat allocated
Rs.100 million for this purpose. Development activities in constituencies are underway
through the decentralized budget, and agricultural modernization initiatives have been
launched across 25 Divisional Secretariats.
Tourism is on the rise, benefiting many individuals, and we’re working to further enhance its
development. The economy, which had contracted, is now gradually recovering, leading to
relief for the people.
We’ve suspended the Parate law for business establishments and offered relief on electricity
bills this week. Additionally, we aim to exempt items such as books, school equipment,
health equipment, and medicine from the VAT list to continue reducing the VAT rate.
We’re diligently strengthening the economy each day, striving tirelessly to improve the lives
of our people and fortify the economy. Our actions are guided by a strategic plan, ensuring a
systematic and methodical approach.
Some suggest retail solutions or collecting funds from Sri Lankans abroad, but these are
deemed inadequate by those with economic knowledge. Currently, we must decide whether
to continue on our current path, reaping the benefits of our economic trajectory, or risk
returning to a state of distress.
To sustain our current course, I anticipate presenting the necessary ordinances and
regulations to Parliament, including the Economic Reform Act. My actions are not driven
by personal popularity or power but by a dedication to the future of the country.
While certain segments of society have faced hardships due to our current practices, we’re
striving to uplift the entire society and establish a sustainable economy where growth
benefits all. As Professor Henpitagedara Gnanavasa Thero emphasized in 1983, addressing
economic problems collectively is key to fostering societal peace and happiness.
Let’s execute our economic plan in this manner to resolve the issues and strengthen the
economic practice of uplifting the entire society. I urge all members of this assembly and all
Sri Lankan citizens to join us in this righteous journey.
President’s Media Division (PMD)
06.03.2024