2021-01-28 10:07:02 GMT2021-01-28 18:07:02(Beijing Time) Xinhua English
COLOMBO, Jan. 28 (Xinhua) Sri Lanka s State Minister of Money, Capital Market and State Enterprise Reforms Ajith Nivard Cabraal has said that the Sri Lankan government hopes to attract over 2.5 billion U.S. dollars in foreign direct investment (FDI) this year, local media reported here Thursday.
Cabraal also told reporters on Wednesday that the Sri Lankan government has no plans to issue more International Sovereign Bonds and will instead focus on adjusting the ratio of foreign debt to local debt. We have empowered small and medium business owners through our efforts. Instead of sovereign bonds we will attract foreign currency through different means, Cabraal was quoted as saying.
The setback due to the pandemic has aggravated some of the perennial macro-economic and sectoral problems in Sri Lanka. For example, borrowing and accumulating external debts has been a practice of successive governments since 1978, which was the year of partial liberalization of the economy. During the early periods, when Sri Lanka was considered a low-income country, we were entitled to substantial grant aid as well as concessionary finances.
This relatively low interest facilities and lenient conditionalities provided incentives for the governments to keep borrowing for many development projects, from bi-lateral and multi-lateral lending agencies, irrespective of inflated costs of many of these projects. In most of these cases, financial benefits also have spilled over to Sri Lankan politicians, bureaucrats, and technocrats. Notwithstanding such leakages, these foreign funded projects increased the availability of more sophisticated infrastructure and utilities in sectors suc
The Central Bank this week took a tougher stance by banning banks from purchasing Sri Lanka’s International Sovereign Bonds (ISBs) for three months. ..
It is comprehensively “growth” oriented.
What were the factors that resulted in the 2021 Budget?
The country has been experiencing slow and low growth since 2015, which by 2019 was only 2.3% vis-à-vis 5% in 2014. Contractors and suppliers who had supplied a good or a service to the Government had not been paid their dues, which by the end of 2019 was almost Rs. 250 billion. NPL in the banks had increased to almost 5% from the lows of 1-2 % with almost 25% of those in the NPL constituted by SMEs. The electricity sector that requires at least 200 MW to be added annually did not see a single MW added to the electricity generation capacity.
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