Written by Chevaan Daniel
20 Nov, 2016 | 5:51 pm
Sri Lanka’s total current outstanding government debt, according to the Central Bank stands at a staggering Rs. 9,382 Billion as of the end of July 2016. That’s an increase of Rs. 878.7 Billion from the end of 2015. Attributing the increase mainly to high Domestic Borrowings and the depreciation of the Rupee against major foreign currencies, the Central Banks special report makes particular mention of Rs.70.1 Billion of debt being the result of the Discount Factor, which is the net difference between the book value and face value of issues and maturities of Treasury Bills and Treasury Bonds-(CB).
Of course these billions mean little or nothing to the farmers of Tambuttegama and the fisher-folk of Kaluwankerni. The average Sri Lankan is kept enraptured & hypnotized in a never-ending political circus between the incumbents who have divided themselves in to factions and the ousted camps determined to make a political comeback.
The political-class couldn’t care less about the state of our economy or the state of our lives. That the Prime Minister advocated giving away a monthly allowance of Rs. 100,000 to each MP to be used in ‘development work’ in addition to all the allowances and permits already in their kitty, is perhaps the most recent example of an abject lack of empathy and understanding of what really ails our nation and her people.
The fact is, all we see is wild allegations being thrown at each other, a desperately political budget and cloak & dagger games between the constituent parties of the National Government. Have we heard of a Grand National Strategy? How do we intend on competing against the roaring economies in our own neighborhood? Where will Sri Lanka be 20-years from today? What investments are we making in building a highly skilled workforce equipped to take on the challenges in the years to come? Does the government imagine that giving away Tab’s to school children to be the answer to the need of sculpting a vibrant generation, capable of becoming world-class technological innovators? It is impossible for this or any government to truly commit itself to building our nation whilst being focused on political survival and what is invariably and eternally, the next election.
And now the next one, the hotly debated Local Government Polls, is being touted as a litmus test for each party’s popularity. It is bound to be a hotly contested street fight, with fabulous amounts of money being thrown by contenders and parties alike. Pots of money that somehow never fail to magically appear during elections in Sri Lanka.
It is after all in public interest that we are aware of how each party accumulates the millions and sometimes, billions it will no doubt spurge, all in the name of power and control.
Be that as it may, let’s take a few moments to understand the state of our own finances, let’s take a brief look at our Key Economic Indicators:
1. Our GDP Growth Rate has fallen to 2.6%, with the Central Bank estimating Real GDP growth to be 3.9% compared to around 5% during the same time, last year. This is compared to our fiercest regional competitors, namely Bangladesh at 7.05% & Vietnam at 6.8%.
2. Our Balance of Trade stands at a negative $US 645 Million, with export earnings growth slower than slowing down of imports. http://www.tradingeconomics.com/sri-lanka/balance-of-trade
3. Foreign Direct Investment, that should be the lifeblood of our economy stands at just US$ 117 Million as of the 1st Quarter of 2016, that’s lower than an average of US$128 Million since 2001. It would be interesting to note here that we have a Board of Investment, a Cabinet Minister and a State Minister for Development Strategies and International Trade, a Minister of Investment Promotions and then another Quasi-BOI, the Agency for Development, supposedly created to streamline & attract FDI. http://www.tradingeconomics.com/sri-lanka/foreign-direct-investment
Perhaps this utter bureaucratic mess, has resulted in Sri Lanka’s deterioration in terms of Ease of Doing Business as reported by the World Bank, in which Sri Lanka currently ranks 110th. We have been beaten by Malaysia, Thailand, Vietnam and even Nepal but are doing better than Swaziland, Uganda, Belize and Malawi.
Well done, to all the Ministers, State Ministers, Agencies & Boards concerned. http://www.tradingeconomics.com/sri-lanka/ease-of-doing-business
4. An indication of the health of our manufacturing sector is reflected by the Manufacturing PMI (Purchasing Managers Index), which has decreased to 56.5 in October this year. This points to weaker expansion of the sector and decelerated employment. http://www.tradingeconomics.com/sri-lanka/manufacturing-pmi
5. Our National Household Savings Ratio has also decreased to 22.60% from last year, as people struggle to save amidst an increasing Cost of Living. http://www.tradingeconomics.com/sri-lanka/personal-savings
6. Our Housing Index, which is the total number of housing approvals has also decreased to 3,411 in the 4th Quarter of 2016 from the quarter before. http://www.tradingeconomics.com/sri-lanka/housing-index
7. Unemployment INCREASED to 4.6% in the 2nd quarter of 2016 from the quarter before. http://www.tradingeconomics.com/sri-lanka/unemployment-rate The only saving grace seems to be foreign remittances, which have increased on the back of Sri Lankan Domestic Workers in the Middle-East.
If our political leaders were corporate leaders, this sort of performance would render them not just immediately unemployed, but permanently unemployable!
All things considered, it is easy to be pessimistic and doubtful as to whether Sri Lanka can redeem for herself, her rightful place on the global stage. But as political commentator and futurist Alex Steffen says,
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