The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) organised a CEOs Breakfast Forum recently.
It focussed on how and what Sri Lanka must do to progress from crisis to sustainability as the country battles its worst ever economic disaster in history.
Executive Director, Verité Research, Dr. Nishan de Mel delivered the keynote speech at theevent which was attended by CEOs and Corporate Chairmen.
The keynote address was followed by a panel session which featured Director General, Department of Fiscal Policy, Ministry of Finance, Dr. Kapila Senanayake, Deputy Vice Chairman, Ceylon Chamber of Commerce, Krishan Balendra, Immediate Past President, CA Sri Lanka, Manil Jayesinghe, Chairman and CEO of TW Corp Thilan Wijesinghe, and Head of Research, First Capital, Dimantha Matthew. The session was moderated by President, CA Sri Lanka, Sanjaya Bandara.
Dr. de Mel provided an overview of the current economic state in the country and said inflation had hit 64% while food inflation was at 93.7%.
“In 2019, the poverty line stood at 6966, but by July this year it is about to double, and when poverty lines double, then the level of poverty can even triple,” he said. He said that when it’s business as usual, then the results too will be the same. “Business as usual” means that in the past 56 years, Sri Lanka has been part of 16 IMF programs and failed to complete seven of them, which were long-term programs. “We have a track record where we have not achieved this kind of target. So, if it is business as usual, then we should expect results to also be ‘usual’, which means we could even miss this IMF target, and then the expected projections will not be achieved and Sri Lanka will be back in difficulty five years from now asking the world again for assistance,” he said.
According to him either the economy or vested interests can survive. He blamed “vested interests,” as the culprit for driving the economy to its current state. “You are among the most powerful in trying to change the course of Sri Lanka’s economy, and you must know that both can’t survive, and if vested interests are under control, then we can move away from business as usual and chart a better path for Sri Lanka’s economy,” he told corporate leaders. During the panel discussion, Balendra outlined the new steps his company was taking to educate farmers on better agricultural practises as many had relied on and overused the heavy subsidies provided the past.
Dr. Senanayake said that in the past, Sri Lanka had undergone a series of crises, but this is a dire crisis and blamed a legacy of policy mistakes and missed opportunities for reforms that have brought Sri Lanka to the current state.
Matthew predicted a ‘revival’ with new SMEs likely to be set up early and mid-next year. However, he said that positive GDP growth will not be seen at least until the fourth quarter. “If that is the case, the negative GDP growth will be prevalent for a longer period and the finance sector should be especially focused on survival — until the economy comes back into pace.”