IMF backs Lanka’s fiscal policies
Shirajiv SIRIMANE
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IMF Resident Representative to Sri Lanka Dr. Koshy Mathai
Speaking at the HSBC Power Breakfast meeting at Colombo Hilton
yesterday. Picture by Sumanachandra Ariyawansa
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The International Monetary Fund (IMF) is optimistic of Sri Lanka's
economic prospects and the country has taken several meaningful steps to
thrust economic growth, said IMF Resident Representative in Sri Lanka
Dr. Koshy Mathai. Speaking at the HSBC organized Power Breakfast meeting
at Colombo Hilton yesterday he said the depreciation of rupee was a step
in the right direction. “It is good that the currency rate is now
decided by market forces rather than it being set by the Central Bank,”
he said.
Dr. Mathai also said that on the long run it would also lead to a
drop in imports which in turn would help the local manufacturing process
increase. “If this trend continues exports too are bound to increase,”he
said. The IMF representative said that the country can look for a
formula for fuel prices where the price would be decided on a check and
balance system.
Commenting on infrastructure he said that it was pleasing to note
that the government had invested 6.5% on capital expenditure.
“We see a great deal of investments being made towards the building
of domestic air strips, roads and power sector related projects. However
we also like to see the private sector getting involved more in this
segment in the future,” he said.
He also said that one of the drawbacks he sees in the country is the
deficiency of long term credit being offered by banks.
“In addition though Sri Lanka boasts of a high literacy rate, human
capital needs to be more ‘thinkers’ and for this they have to be
educated in IT, engineering and given university education.”
Sri Lanka needs to focus more on vocational training for youth as
there is a demand in this sector. He also said that Sri Lanka currently
exports only around 1% and 5% to China and India and the exporters
should try to concentrate more on this region.
“However, it may be a tall order as these countries posses similar
products that are manufactured in Sri Lanka. However I have seen a Sri
Lankan company exporting tea to China which proved that opportunities do
exist,” he said.
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