The finance minister who assumed duty declaring he is the finance minister without money has huge challenges to overcome through the Budget – 2022 which we are expecting next week on November 12, said SJB Parliamentarian Eran Wickramaratne speaking at a Press Conference.
"We must wait and see what he has to say. One of the unprecedented challenges is the budget deficit which is a huge problem. The second challenge is basically a lack of foreign currency," Wickramaratne said.
The net asset reserves in the country have drastically dropped to a mere USD 2 billion from the high of 7.6 billion dollars when the Yahapalana government left in 2019.
"The current reserves are hardly enough to meet the little over one month’s import needs. So this is a very, very dangerous level, faced by a country. Nobody knows what the finance minister will be able to do, in actually infusing confidence in the international market and in the global community. It is going to be a difficult task for Finance Minister Basil Rajapaksa. The country is really on the verge of disaster if we are not able to establish market confidence."
He also said that inflation has been rising very rapidly and the people are finding it extremely difficult basically to meet their daily expenses because there is no salary increases since it was last given during the yahapalana government.
"Now, what the country face is not just the rupee problem it is also the foreign currency problem that is needed for imports of essential foods and other items. How is this government going to overcome this problem," he questioned.
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"The Budget fiscal announcement should be preceded with major policy reversals by making sure that there is law and order, rule of law exists, all contracts and agreements, and the international treaty obligations will be honoured. That is the way to basically reverse the adverse decisions that had been made for the country by UNHRC, EU Parliament, and other trading partners who have shown the signs that they don’t want to trade with Sri Lanka."
Eran Wickramaratne emphasized that the government needs to create a situation firstly the rule of law is in order while going for fiscal consolidation and dropping the barriers on the path of FDI. Encouraging and finding a market for exports with the infusion of technology to improve SMEs, agriculture, and productivity is imperative and the government should realize, other than that there is no quick-fix solution to uplift the economy of the country.
But, Wickramartne added this government which has messed up economic management and the management of Covid, should wake up from its slumber acknowledging it was a mistake made by the government and if it reverses policy then there is a clamor of hopes for a change
Elaborating the way the country is being misled by this government he said that the government, which had talked of a closed economy to boost the manufacturing economy and the agrarian economy, has now completely reversed and removed the control prices on a number of essential commodities following market economic features.
The government has not come up with any solution to the huge increases in commodity prices. But before the budget, the levy on a kilo of rice was reduced from Rs. 65 / - to 25 cents. Even when the sugar tax was reduced to /25 cents its benefits were not passed on to the consumers but the cronies who imported them into the country gained an undue profit up to Rs 16 billion depriving the state of its revenue. So the reduction of levy on the imported rice, if not passed on to the consumers would also give the same benefits to the importers warned Eran Wickramaratne.