April 18, 2024
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    Even a Minor Change in Current Program Poses Serious Risk to Country Featured

    April 03, 2024

    Minister of Transport, Highways and Mass Media, Dr. Bandula Gunawardena, has stressed that any alteration, even as small as one-tenth, to the on-going government program spearheaded by President Ranil Wickremesinghe could pose a significant threat to the stability of the country once more.

    Despite numerous reports indicating an increase in poverty among the country’s most vulnerable, the minister highlighted that this trend is not surprising in a nation where economic growth plummeted to -08% and faced bankruptcy. He also emphasized the urgent need of establish a social protection.

    Transport, Highways and Mass Media Minister made these remarks during a press conference conducted today (03) at the Presidential Media Centre (PMC) under the theme “Collective Path to a Stable Country”.

    The minister announced that the Road Development Authority (RDA) has settled outstanding bills totalling Rs. 361 billion on behalf of contractors. He also mentioned that once agreements are signed with bilateral creditors, all the existing development projects will kick off.

    Continuing his remarks, Highways and Mass Media Minister Dr. Bandula Gunawardena emphasized:

    President Ranil Wickremesinghe boldly took on the challenge of rebuilding the country following a downturn last season, leading to an agreement for an extended credit facility with the International Monetary Fund (IMF). Discussions on debt restructuring were also initiated.

    As a result, the country has adopted a conciliatory economic strategy this year, and it is essential for everyone to acknowledge and adapt to this situation, irrespective of their preferences.

    During that period, the exchange rate for one dollar was nearly Rs.400.00. However, presently, the value of the dollar has dropped to Rs. 300.00. Consequently, the cost in rupees for all imported goods has decreased.

    Furthermore, the gross official reserves, which had previously depleted to zero, have now surged to USD 4.5 billion. This increase is accompanied by a surplus in the current account of the balance of payments, contributing to the strengthening of the rupee. Consequently, prices of numerous goods have experienced a decline. Notably, Sri Lanka has achieved a surplus in the budget primary balance for the first time in its post-independence history.

    The interest rate has notably decreased, while inflation, previously at 70%, has dropped to a mere 6%. Consequently, the rate of price increase for goods has also slowed down significantly. These developments indicate a substantial recovery from the previous unfavourable and challenging situation.

    Furthermore, regardless of the governing party, the newly enacted Central Bank Act prohibits the minting of currency going forward. This measure has facilitated the maintenance of financial management discipline.

    An important point to highlight is that any deviation, even by a minor fraction, from the on-going government program under the leadership of President Ranil Wickremesinghe aimed at national development could pose a severe risk, potentially jeopardizing the country’s future prospects.

    Several reports indicate a rise in poverty among the most vulnerable citizens in the country. This trend is not surprising given the negative economic growth and subsequent bankruptcy experienced. To alleviate poverty, it’s imperative for the country’s income to increase and the economy to flourish across agriculture, industry, and services sectors. Historically, economic growth correlates with a reduction in poverty and an increase in per capita income.

    Under the current program with the International Monetary Fund (IMF), particular attention has been directed toward assisting the economically vulnerable, especially those affected by the recent crisis. Notably, the “Aswasuma” program has been introduced, with a budget three times larger than that allocated for prosperity, aimed at providing strong social security to combat poverty effectively.

    The Road Development Authority (RDA) has settled outstanding bills totalling Rs. 361 billion on behalf of contractors. Going forward, new contract bills must be cleared within three months of submission. To ensure financial discipline, agreements have been reached with the International Monetary Fund (IMF). By June, final agreements will be signed with bilateral creditors, paving the way for the resumption of all halted development projects.

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