President Ranil Wickremesinghe stated that Sri Lanka is entering a new economic era and expects the country’s economy to be more advanced by the middle of next year.
President
Reforms Ease Business Restrictions, Creating a More Favourable Environment for Entrepreneurs
• New Provincial Economic Development Boards to Decentralize Economic Power
- President
The President shared these insights during a meeting with representatives of the Kandy District Trade Association in Kandy today (10).
The President announced that he is working to ease numerous legal regulations that have impacted businesses and is developing a new institutional framework to support entrepreneurs. He also mentioned plans to establish Provincial Economic Development Boards to decentralize economic authority across the provinces.
President
President Wickremesinghe outlined plans to transform Kandy into a major economic hub, with implementation set to begin next year.
During the meeting, these representatives discussed their business challenges with President Ranil Wickremesinghe and presented their set of proposals.
Addressing the gathering President Ranil Wickremesinghe further explained;
Today, a detailed overview of the country’s economic situation was provided. As a country, we are entering a new era, with the government having ceased taking local loans for the first time. To address this, new sources of income must be found. Companies have been instructed to generate revenue through a pricing formula rather than direct investment.
This approach has proven successful in the petroleum and electricity sectors, where fuel and electricity prices are now aligned with global market conditions. The increase in VAT in 2023 and early 2024 presented challenges for everyone, but the economy is gradually improving. We have achieved a surplus in the primary budget, which positively impacts the private sector as well.
We hold monthly discussions with the International Monetary Fund, and our progress is clearly visible in these meetings.
The country’s economy is currently developing, with an increase in foreign reserves. However, next year, reserves may decline due to the allowance for vehicle imports. Despite this, importing vehicles is necessary, and we need to address these short-term challenges.
Overall, the economy is on an upward trajectory. To further enhance government revenue, a revenue authority should be established and trained effectively. As the country’s income grows and the economy progresses, we plan to adjust taxation accordingly, and we are also in discussions with the International Monetary Fund regarding these concessions.
Additionally, a new banking law has been introduced. It allows for the continuation of debt restructuring and aims to address non-performing loans in banks, as well as secure new capital. We anticipate completing these activities next year, which will help reduce domestic debt and support our continued progress.
I have a strong understanding of the challenges faced by businesses, and we must address these issues and move forward systematically. I believe that by the middle of next year, there will be an opportunity for significant economic progress.
I plan to include businesses in new legislation and reduce many existing laws and regulations. Let us work together to develop this new system. We are also working on establishing an Economic Commission. To streamline operations for local businesses, we will create a new institution called Enterprise Sri Lanka, which will consolidate existing organizations. Strengthening regional trade boards is essential as we decentralize the economy. I have also proposed the establishment of provincial development boards, a plan that has received support from other stakeholders.
We have negotiated with Japan to implement the Kandy City Development Plan starting next year, with the goal of building the economy of the Central Province, centred on Kandy. Tourism will play a key role in this development, and we aim to design programs that encourage tourists to stay at least three nights in Kandy. Several major hotels are being established, and it's important to note that the completion of the Central Expressway will significantly enhance this region.
Additionally, we plan to transform the Udawatta forest into a tourist attraction and establish a centre of Buddhist civilization in the area, featuring temples representing every Buddhist country. Moreover, we have outlined several new initiatives for the development of Nuwara Eliya.
Through these initiatives, the Central Province is set to become a major tourism hub. We also plan to develop Kandy as a technology centre, with several new universities to be established in the area. Additionally, extensive agricultural modernization is essential to prepare the province for an export-driven economy. Plans to position Kandy as a key economic centre for the country will commence next year. I intend to hold a special discussion on this matter in January.
Chairman of Mahanuwara Sinhala Welanda Peramuna Yasas Chandrasekara, Secretary Nadeev Weeraratne, Chairman of Kandy Tamil Traders Association M. Kumaradasa, Chairman of Kandy Muslim Traders Association Saleem Deeb and their members were also present at the meeting.
