Cabraal makes fighting presentation on what will be done amidst dire circumstances to revive economy

By Saman Indrajith

The government would enter into swap arrangements with regard to investment that should flow in through Treasury bills and treasury bonds, Capital Markets and State Enterprises Reforms State Minister Ajith Nivard Cabraal told Parliament on Thursday (10)

“Through that swap arrangement we are hoping to attract more investors to ensure that Sri Lanka will have a stable rupee and strong reserves, allowing us to confront any situation,” Minister Cabraal said, winding up the parliamentary debate on Notifications under the Ports and Airports Development Levy Act, Customs Ordinance and the Revenue Protection Act presented to the House for approval.

The State Minister said the revival of the economy would take time. The International Monetary Fund (IMF) had also said that in the current year the world would experience around 4.5 per cent negative growth but in that scenario, it was necessary to break free and move forward with more investments, Cabraal added. 

 “Attracting investment is going to be somewhat challenging but we are hoping to meet that challenge by providing comfort as well as confidence to investors from all over the world so that more money will come in.”

The State Minister said besides Treasury Bills and Bonds, Foreign Direct investments (FDIs), too, would be attracted. “There are many who have told us they are hoping to come into Sri Lanka with their investments and we are confident that before long investments will flow in.”

 Minister Cabraal noted that the Stock Market was picking up and in last one month, almost every day the turnover had risen to over one billion rupees. “We have also seen the All Share Price Index (ASPI) increasing and once there is a sustainable situation, we will see investors return to Sri Lanka. In the meantime, we have enough investors in the country as well.”

The State Minister said that the deposits within the country today in the banking and the non-banking sectors were approximately Rs. 10 trillion.

 “Out of this amount, if we can attract Rs 100 billion or one per cent of that amount, to the Stock Market, capital gains will be enjoyed by Sri Lankans and not by foreigners. As a government which is always concerned about Sri Lankan businesses and enterprises, we will like them to make a profit before others,” he said.

 Minister Cabraal said the country’s banking sector too had to be strengthened. “We saw during the past five years the consolidation programmes that we put in place prior to that ignored. We saw five finance companies collapse in the past five e years whereas not a single failed in the nine preceding years under our government.”

Minister Cabraal said those were the ways in which the government would tweak the economy so that it could go forward and ensure that Sri Lankan businesses and enterprises would thrive in the future.

“We also must implement these policies quickly and with confidence so that people all over the world will know we are a government that means business. We are off to a good start. The President has given clear guidelines to all ministers and state ministers unlike ever done before.”

 He noted that during the past five years, the economy had declined as never seen before. “After nine years of continuous progress we saw five years which was a complete reversal in the growth momentum. Due to the inconsistent policies between different aspects in government we saw poor implementation as well. On top of that there were the Easter Sunday attacks and then we had to face the COVID-19 crisis.”

Cabraal said that even though the new government had inherited an economy in decline,  after President Gotabaya Rajapaksa took office in November last year he had embarked on a mission to revive the economy to meet the COVID challenge, instill confidence of investors in the country’s economy and formulate policies to take Sri Lanka  forward.