Donors redundant

Sri Lanka does not have to depend on donor agencies such as the A.D.B. and the World Bank, neither on bilateral aid, because of its ability to access capital markets after the war end.

Treasury Secretary Dr. P.B. Jayasundera speaking to members of  the Chartered Management Institute, Sri Lanka Branch on Tuesday said that the Fiscal Management Responsibility Act (F.M.R.A.) should be the country’s guide and not the I.M.F.

He also said that the recent salary increase of. Rs. 1,000 to the armed forces did not meet with I.M.F. objections.

In regard to the 22% salary hike to Petroleum Corporation workers (which hike the unions rejected saying that it was inadequate), he said that what was needed were not commitments given to the I.M.F., but F.M.R.A guidelines.
The Government told the I.M.F. that it plans to reduce the budget deficit to 7% of G.D.P. this year.

He said that in the event Sri Lanka loses the G.S.P. + duty free concession to the E.U., considering the positive changes that have taken place after the war end, the economy has the resilience to overcome such challenges.
A written question asked by this reporter of a pledge given to the I.M.F.  by the Government of increasing tax revenue by 2% of G.D.P by next year went unanswered by Jayasundera..
He also said that the garment sector like the tea sector should diversify.

A few years ago Jaysundera wanted the tea sector to emulate the garment industry, in the context of the tea industry exporting raw or bulk teas as opposed to value added teas in considerable numbers. (See also connected story found elsewhere on this page)
Business Editor’s Note: It was subsequently reported that this 22% wage hike will also be applicable to C.E.B. and Water Board workers. Additionally, the government has decided to provide port workers with a Rs. 2,500 monthly allowance.