Indicating he has the will to see his maiden Budget through, Finance Minister Mangala Samaraweera yesterday told private sector representatives discussions on Budget proposals were possible but changing the core principles of free enterprise and liberalisation was “non-negotiable.”
Keen to prove that where there is a will there is a way, Samaraweera told the post-Budget forum organised by the Daily FT and the Colombo University MBA Alumni Association with HSBC as strategic partner, that his ministry would dedicate itself to implementing Budget 2018 while building consensus with the private sector but adjustments would have to be progressive and in the best interests of Sri Lanka.
“I would say nothing is cast in stone. We are willing to listen to suggestions where there may be anomalies to correct, but the basis of free enterprise is non-negotiable, liberalisation is non- negotiable. But within those parameters, certainly, we are willing to be flexible,” he told a packed audience.
Responding to questions, the Finance Minister also emphasised that the Government had the political will to take forward an ambitious Budget that seeks to reform a slew of outdated laws and introduce new regulations that will govern key revenue garnering institutions such as the Customs and Excise departments.
“We do have the political will and I would say Sri Lanka has a good chance to implement these reforms because for the first time the two principle parties are working together. The SLFP and the UNP have come together despite certain differences from time to time. The overall thrust of the vision has been accepted by both parties. There could be differences of opinion from time to time but when it comes to the overall objectives of the Budget, I would say we are of one mind.”
Samaraweera also reiterated his Budget preamble where he recapped Sri Lanka’s history as a trading nation that had relations with Europe and Far Eastern countries and noted that every “Golden Age” of the country’s history was underpinned by a vibrant economy based on trade with the world. To regain such an age and achieve development Sri Lanka needs to end its penchant for acting as a “nanny state” to different stakeholders including the business community, he noted.
“We can be a nanny to the poor and the underprivileged. In that part of one’s obligation to society we certainly will continue to honour. I mentioned about the social safety nets, especially in a free market situation, to have a strong safety net for the more vulnerable segments of society I think is very important but we are no longer willing to be a nanny to the private sector or to any other sector that wants to be protected. They have to learn to compete.”
He also touched on the sensitive standoff that has divided the shipping industry where different factions have protested and others supported the Budget proposal to allow 100% ownership by foreign companies. Samaraweera insisted that for Sri Lanka to keep pace with its peers, liberalisation was essential and the country could not keep ignoring its opportunities for growth.
“Frankly, if I may be very open, I know there has already been a lot of opposition to this idea of opening up the shipping sector but they must come to terms with the realities of the modern world. For example if Sri Lanka is to walk the talk about becoming the maritime hub of the Indian Ocean, we all in Sri Lanka love to talk, we love to grandstand about our vision but when it comes to implementation, everyone wants to pull back but it is high time that as a nation we realise that if we are serious about making Sri Lanka the maritime hub it ought to be. If they are serious about making the newly emerging Financial City an international centre, there are certain things we have to do and one is to open up.”
“We can’t think of becoming a hub if we keep our doors closed. India and Pakistan have liberalised this sector 100%. So we too have to walk the same path and all these protectionist measures for the private sector have to be worked out and revisited if we are to move forward as a country.”
Despite all good intentions, the Budget faces crucial challenges with the main concern being implementation, Samaraweera went on to say. He conceded that the Government had to improve in this segment and was already taking steps to improve reaching targets and transparency.
“Implementation I would say is perhaps the biggest challenge for us. I believe we have a good vision for Sri Lanka. We have a good plan but where Sri Lanka has failed so far is at the implementation stage. I want to ensure that, at least next year, put a lot of emphasis on implementation. In fact I have started a Budget implementation unit, which will be under Finance Ministry Advisors Mano Tittawella and Economist Deshal de Mel along with the Prime Minister’s Office we will see that there is a higher percentage of implementation this year than before,” he said.