Former politician and the Founder of the Pathfinder Foundation, Milinda Moragoda has released a six-point statement on Sri Lanka’s current economic situation.

Issuing a statement, Milinda Moragoda said half-hearted economic reforms by successive governments have been a major contributory factor to the current economic crisis. 

He stated that it is critical that all political parties and society at large come to terms with the fact that economic reform and privatisation are integral components of any successful development programme.

Following is Moragoda’s six-point statement on Sri Lanka’s economic situation;

1) We must face the bitter truth that half-hearted economic reforms by successive governments have been a major contributory factor to the current economic crisis. The only solution to Sri Lanka’s present economic predicament is rapid economic growth. This can only be achieved through an outward-looking export and foreign-investment-driven economic strategy. Such strategies have driven rapid growth and poverty alleviation in a number of other countries.

2)  In Sri Lanka, such an economic transformation can only take place if the political formation governing the country is unequivocally committed to deep economic reforms that are predicated on clear policies based on competitiveness, global connectivity, privatisation, and small government.

3)  If Sri Lanka is to come out of this economic collapse, the country will require annual growth rates of well over 5% for the next 10 years. 

4)  According to present forecasts, the economy is not expected to grow at more than 3% annually until 2032. Furthermore, the GDP-to-debt ratio in 2032 is expected to be at 95%, which will still leave our economy in an extremely fragile and precarious position. In such a scenario, even after restructuring, Sri Lanka’s ability to service her debt could come into question, resulting in repeated restructuring and the austerity that goes with it.

5) It is critical that all political parties and society at large come to terms with the fact that economic reform and privatisation are integral components of any successful development programme. In that regard, it is incumbent upon all political parties to incorporate these aspects into their election manifestos at the very outset. This will serve to address the repeated policy reversals that have resulted in a lack of stability and predictability in the policy framework. 

6) All parties should cost the proposals they put forward and explain how they intend to finance them. The era in which political parties make populist promises during election campaigns, and then mislead the citizens after taking office, must be brought to an end. (Newswire)

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Sri Lanka’s High Commissioner to India Milinda Moragoda who is to relinquish duties at the end of this month, was hosted by two top corporate leaders in India recently.

According to the High Commission of Sri Lanka in New Delhi, Adani Group’s Chairman Gautam Adani hosted High Commissioner Moragoda at a farewell dinner at his residence on Tuesday (Sep 05). 

Earlier this week, the High Commissioner was hosted for a farewell lunch by the Chairman of the Hinduja Group Europe, Prakash Hinduja.

On both occasions, High Commissioner Moragoda recalled the close interactions he had had with these two top businessmen and thanked them for the assistance that they had extended to him during his tenure in Delhi.

Founded by Gautam Adani in 1988, Adani Group is one of the largest corporations in India and its businesses include port management, electric power generation and transmission, renewable energy, mining, airport operations, natural gas, food processing and infrastructure.

Hinduja Group is a top Indian transnational conglomerate, which is present in eleven sectors including automotive, oil and speciality chemicals, banking and finance, power etc. It owns the automotive manufacturer, Ashok Leyland.

The High Commission of Sri Lanka in New Delhi added that both Groups have invested substantially in Sri Lanka. (NewsWire)

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Sri Lanka and India will sign a pact to link their power grids and start negotiations on an upgraded trade agreement within two months, Sri Lanka’s envoy to New Delhi Milinda Moragoda told Reuters. 

According to Reuters, Moragoda said on Wednesday, that Sri Lanka and India will sign a pact to link their power grids, as the island nation seeks a way out of its worst economic crisis in decades.

India has provided some $4 billion in assistance to its southern neighbour since the crisis hit early last year, but Sri Lanka is now seeking to enhance trade and investments as it moves to close a $2.9 billion loan from the International Monetary Fund, the told Reuters.

“We have to have growth, otherwise basically the economy will shrink,” Milinda Moragoda said. “As far as growth is concerned, India offers that prospect. So we will have to move on that. Tourism from India, investment from India, integration with India. That’s what we have to do.”

A key part of Sri Lanka’s economic recovery plan rests on developing its renewable energy resources in the island’s north, from where power can be transported into southern India through a cross-border transmission cable.

The two countries resumed talks on linking their electricity grids last year, and Moragoda said a memorandum of understanding on the project would be signed within two months, which will be followed by a feasibility study.

First proposed more than a decade ago, the project has made little progress so far. But Moragoda said Sri Lanka hoped to get the transmission line in place within two to three years so that renewable power produced on the island can be sold to India.

“We need to have more sources of foreign exchange and electricity will be ideal,” he said.

The neighbours will also start negotiations within weeks on enhancing an existing free trade agreement, Moragoda said, as part of a push by Sri Lanka to seal deals with key trading partners, including China and Thailand.

“On our side, we are just about to nominate the (negotiations) team,” he said, adding that the focus would be on enhancing trade in sectors including textiles and garments, a major foreign exchange earner for Sri Lanka.

India is Sri Lanka’s biggest trading partner accounting for about $5 billion each in bilateral trade in 2021. (NewsWire)

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