• Public debt to be below 95% of the country’s total GDP by 2032 and after
• Economy to be transformed into an export-oriented, digitised economy
• Parliament to hold oversight power of Cabinet when executing the act
• Govt. to seek assistance of five agencies for effective implementation

The Government is to present to Parliament on Wednesday (22) the proposed Economic Transformation Bill, which is yet another key piece of legislation under the ongoing programme with the International Monetary Fund (IMF).

The Sunday Morning, upon inquiry about the proposed Economic Transformation Bill from Government sources, was told that it has been proposed that the President should, every five years commencing from 2025, ensure the Cabinet of Ministers prepares and presents a report to Parliament on the policy framework, strategies, and legislation which will ensure the continued adherence to the National Policy on Economic Transformation, which is the base of the proposed piece of legislation.

In the case of targets outlined by the National Policy not being met, it will be the responsibility of the Government to inform Parliament of the measures being taken to remedy this shortfall. 

Also, in keeping with Articles 4, 43, and 148 of the Constitution, Parliament will continue to have the power of oversight control of the Cabinet of Ministers when executing its powers and responsibilities under the proposed legislation.

It is also learnt that the proposed legislation will address issues related to the country’s public debt as outlined by the IMF. 

Accordingly, the new act is aimed at holding public debt at below 95% of the country’s total Gross Domestic Product (GDP) from 2032, holding the Government’s financing requirements below 13% by 2032 and afterwards, and ensuring that annual repayment of the Government’s foreign obtained loans will be below 4.5% of the total GDP from 2027.

The successful implementation of the proposed act is aimed at ensuring that all citizens will be assured an adequate standard of living for themselves and their families along with the continuous improvement of living conditions for all those residing in the country, providing an equal focus to the private sector in order to ensure sustainable and evenly distributed rapid development of the country, and striving to avoid a repeat of the economic crisis experienced by the country in 2022.

According to informed sources, the National Policy on Economic Transformation will set several key economic targets that include that GDP must reach 5% per annum by 2027 and increase 5% from then on; the total level of unemployment in the country to fall below 5% by 2025; ensure that by 2030 female participation in the labour force must not be below 40%; hold the current account deficit at less than 1% in the event the country experiences such a deficit; and to see a growth in Foreign Direct Investments (FDIs) to reflect 5% of the total GDP by 2030 as well as a shift in FDIs towards the export of goods and services by 2040.

Also, keeping in line with the policy of becoming an export-oriented economy, the export of goods and services is expected to meet the following targets: not less than 25% of total GDP by 2025; not less than 30% of total GDP by 2030; and 60% of total GDP by 2040.

The Government is to seek assistance from several agencies to implement the proposals in the new legislation. These agencies are the Economic Commission, Zones SL (charged with the responsibility of advising the Economic Commission on the requirement for investment zones, while also operating and managing these zones), Office of International Trade (charged with the development and promotion of Sri Lanka’s international trade), National Productivity Commission (charged with promoting economic growth through increased productivity), and the Sri Lanka Institute of Economics and International Trade (charged with research for policy, international trade, and international finance).