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Prof. Samarajiva proposes SriLankan divest shares

29 Nov 2021

  • Suggests to follow Air India
  • Says SriLankan losses Rs. 129 m daily
LIRNEasia Founding Chair and Advocata Institute Advisor Prof. Rohan Samarajiva, during a recent event, suggested that the Government divest SriLankan Airlines on the same lines as Air India. “The objective is to protect the taxpayers of this country from having to continually cover the losses of this technically bankrupt state-owned company,” he said, highlighting the importance of immediate measures to improve public finances. The national carrier makes a daily loss of Rs. 129.03 million. In the last four years of operation, it has cost the economy Rs. 137 billion in the form of accumulated losses. Prof. Samarajiva also stressed the importance of building a national consensus to implement immediate reforms to tackle a wide range of issues ranging from unsustainable debt to shortages of essential items in the country. “We are no longer talking about a crisis that is about to engulf us. We are now in its midst, though not its depths. The hope that the 2022 Budget would give the right signals has evaporated,” he added. Prof. Samarajiva made these comments at Advocata’s latest event, titled “A National Consensus for Economic Reforms”. He provided a breakdown of severe economic and social challenges facing the country. The present macroeconomic instability lies in the failure of the state to implement deep structural reforms to the economy for nearly 20 years. The Covid-19 pandemic has exposed Sri Lanka’s fundamental weaknesses that have plagued the economy for a long period of time. The event brought together politicians representing the main political parties to discuss the importance of a united course of action, to drive Sri Lanka’s economy towards a path of growth. Prof. Samarajiva explained the seriousness of the crisis, noting: “We cannot get out of the crisis without taking some bitter medicine. It is increasingly becoming clear that debt restructuring in the context of an IMF (International Monetary Fund) programme is essential. Unlike in previous IMF programmes, we cannot afford to abandon discipline at the earliest opportunity. Unless we make reforms, we will keep falling back.” Trade reform is another area to boost productivity and achieve growth. Speaking on this topic, senior economist Dr. Harsha de Silva said: “The import substitution mentality should be abandoned. We need to face and compete in the competitive international economy. We have been excluded from the global value chain because of our narrow mindset of import substitution and complete self-sufficiency.” Also speaking at the event, Samagi Jana Balawegaya (SJB) MP Patali Champika Ranawaka commented on the importance of energy sector reforms to address the present crisis. “The power issue is the next crisis. We need to sell to india. If the rain dries out for six weeks, then we are certainly headed to a big power crisis. Substitutes to generate electricity (kerosene) are also scarce,” he noted. This crisis could lead to a rift in society, highlighting the urgency of reforming the energy sector. Sri Lanka Podujana Peramuna (SLPP) MP Dr. Suren Raghavan was of the opinion that “we need national consensus which capitalises on the unique competencies and skills of the different communities”, and further emphasised on the message of a common plan of action to come out of the present economic crisis. Advocata Institute is an independent policy think tank based in Colombo, Sri Lanka. They conduct research, provide commentary, and hold events to promote sound policy ideas compatible with a free society in Sri Lanka.


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