"We Can Handle It": Sri Lanka Eyes Growth Despite Challenges - Ranil at Davos

by Zulfick Farzan 18-01-2024 | 10:19 AM

COLOMBO (News 1st); Addressing the World Economic Forum, Sri Lankan President Ranil Wickremesinghe outlined the country's progress in its economic recovery while acknowledging persistent challenges. He expressed cautious optimism, aiming for 2% growth this year and 4-5% next year, but emphasized the critical need for addressing revenue and balance of payments issues.

"We have performed well so far," he stated, praising positive growth for the first time.

However, he recognized the crucial tasks of managing debt and increasing government revenue.

To tackle revenue shortfalls, the government is collaborating with the International Monetary Fund (IMF) and implementing a revamped revenue collection system, including a potential single revenue authority.

Turning to the balance of payments, Wickremesinghe identified tourism, agricultural modernization for exports, and renewable energy as key sectors for attracting new investments. Sri Lanka's surplus capacity in solar and wind power presents a further opportunity.

The President also tackled the global challenge of populism and its clash with fiscal responsibility. "Most of us are living beyond our means," he declared, underscoring the need for governments to provide essential services like housing, education, and healthcare while adhering to conventional financial rules.

He highlighted Sri Lanka's own experience as an example of balancing public expectations with economic prudence. "Sri Lanka has done that over a period of time," he noted, citing investments in paved roads, schools, and water infrastructure despite external debt. However, he emphasized the particular vulnerabilities of African nations, advocating for debt relief for the continent.

On foreign investment, Wickremesinghe dismissed concerns, stating, "Sri Lanka has done that over a period of time, it is not so bad for us." He pointed to a long history of foreign investment, from the Dutch colonial era to the present, and reassured attendees that Sri Lanka remains open to further partnerships.