‘Hambantota Port and Port City should be run on P-P-P basis to reap full benefits’

By Hiran H.Senewiratne

 “The  government should have a stable system to tackle the  Covid 19 pandemic situation. It should have a short term to long term economic plan to arrest the economic crisis that has resulted from the pandemic. In the short term perspective, the government should go for short term foreign exchange borrowings at a nominal interest rate; selling liquid assets. However, Hambantota Port and the Port City projects have to be private-public partnership projects, to enable the country to get the maximum benefits out of them, Professor of Economics, University of Colombo Sirimal Abeyratne said

“The current Covid 19 pandemic has further aggravated the local economy which is already marred by inconsistent economic policies and poor fiscal management for which every government that has come to power so far is responsible, Abeyratne said.

” The problems of Sri Lanka are unique even without the Covid 19 pandemic. The economy of the country has clearly not moved in the proper direction over the years. The economy had been rendered weak due to scarce foreign reserves, poor fiscal policy management  and the slow exploration of export markets in the recent past, Abeyratne told The Island Financial Review yesterday.

Abeyratne added: “Bilateral and multilateral short term borrowings should be obtained subject to conditions which are beneficial to the country. If not, the problem would further deteriorate with the high debt servicing cost.

“At present, import restrictions imposed by the government are a prudent move to preserve foreign exchange, which at present  stands at US $ 4 billion, ample for three months’ imports.

‘At this juncture, the government should focus on economic growth strategies and improve export oriented markets. When it comes to economic growth, a prudent fiscal management mechanism is the need of the hour, which would enhance the effective management of government spending and its revenue.

“Since the local domestic market is small it is very important to attract foreign direct investments into the country. We should at least attract US$ one billion worth foreign investments into the country.

“Sri Lanka’s investment climate is not encouraging  because of policy issues and regulatory issues. The government should now take some steps to address those issues to attract FDIs into the country.

“In the recent past, several economies in the region have overtaken Sri Lanka because those countries have placed their economic fundamentals properly. Unfortunately, inconsistent economic policies have affected our economic development very badly.”